QTS Realty Trust, Inc. (Form: S-11, Received: 08/16/2013 13:41:53)

Large accelerated filer

Accelerated filer

Non-accelerated filer

x (do not check if a smaller reporting company)

Smaller reporting company

As filed with the Securities and Exchange Commission on August 16, 2013

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM S-11

FOR REGISTRATION

UNDER

THE SECURITIES ACT OF 1933 OF SECURITIES

OF CERTAIN REAL ESTATE COMPANIES

QTS REALTY TRUST, INC.

(Exact Name of Registrant as Specified in Governing Instruments)

12851 Foster Street

Overland Park, Kansas 66213

(913) 814-9988

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Shirley E. Goza

General Counsel

QTS Realty Trust, Inc.

12851 Foster Street

Overland Park, Kansas 66213

(913) 312-5503

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copies to:

David W. Bonser

Eve N. Howard

Matt N. Thomson

Hogan Lovells US LLP

555 Thirteenth Street, N.W.

Washington, D.C. 20004

Phone: (202) 637-5600

Facsimile: (202) 637-5910

J. Gerard Cummins

Edward F. Petrosky

Sidley Austin LLP

787 Seventh Avenue

New York, NY 10019

Phone: (212) 839-5300

Facsimile: (212) 839-5599

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the Securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

CALCULATION OF REGISTRATION FEE



Title of Each Class of Securities to be Registered	Maximum Aggregate Offering Price	Amount of Registration Fee
Class A Common Stock, $0.01 par value per share	$300,000,000	$40,920(1)

(1)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We and the Selling Stockholder may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated August 16, 2013

PROSPECTUS

LOGO

QTS REALTY TRUST, INC.

CLASS A COMMON STOCK

This is the initial public offering of QTS Realty Trust, Inc., and, prior to this offering, there has been no public market for our shares. We are selling shares of Class A common stock, and GA QTS Interholdco, LLC, referred to herein as the Selling Stockholder or General Atlantic, is selling shares of Class A common stock. We expect to qualify as a real estate investment trust, or REIT, for federal income tax purposes commencing with our taxable year ending December 31, 2013.

We expect the initial public offering price of our Class A common stock to be between $ and $ per share.

Our charter contains restrictions on ownership and transfer of our common stock intended to assist us in maintaining our status as a REIT for federal and/or state income tax purposes. For example, our charter generally restricts any person from actually or constructively owning more than % of the aggregate of the outstanding shares of our common stock by value or by number of shares, whichever is more restrictive, except for certain designated investment entities that may own up to 9.8% of the aggregate of the outstanding shares of our common stock, subject to certain conditions. See “Description of Securities—Restrictions on Ownership and Transfer.”

We intend to apply to have our Class A common stock listed on The New York Stock Exchange under the symbol “QTS.”

We are an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. Investing in our Class A common stock involves risks. See “ Risk Factors ” beginning on page 24.


	Per Share	Total
Public offering price	$	$
Underwriting discounts and commissions	$	$
Proceeds, before expenses, to us(1)	$	$
Proceeds, before expenses, to the Selling Stockholder	$	$

(1)	We refer you to the section captioned “Underwriting” of this prospectus for additional information regarding underwriter compensation.

We will not receive any proceeds from the sale of our Class A common stock by the Selling Stockholder.

We have and the Selling Stockholder has granted the underwriters a 30-day option to purchase up to an additional shares of Class A common stock.

Neither the Securities and Exchange Commission nor any state or other securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the Class A common stock on or about , 2013.

Joint Book-Running Managers


Goldman, Sachs & Co.		Jefferies


BofA Merrill Lynch		Deutsche Bank Securities		KeyBanc Capital Markets		Morgan Stanley

, 2013

TABLE OF CONTENTS


Prospectus Summary			1
Risk Factors			24
Special Note Regarding Forward-Looking Statements			60
Use of Proceeds			61
Distribution Policy			62
Capitalization			66
Dilution			67
Selected Financial Data			69
Management’s Discussion and Analysis of Financial Condition and Results of Operations			75
Industry Overview and Market Opportunity			108
Business and Properties			114
Management			156
Certain Relationships and Related Party Transactions			180
Investment Policies and Policies with Respect to Certain Activities			186
Structure and Formation of Our Company			192
Description of the Partnership Agreement of QualityTech, LP			199
Principal and Selling Stockholders			207
Description of Securities			210
Material Provisions of Maryland Law and of Our Charter and Bylaws			217
Shares Eligible for Future Sale			224
U.S. Federal Income Tax Considerations			228
Underwriting			255
Legal Matters			261
Experts			261
Where You Can Find More Information			261
Index to Financial Statements			F-1

You should rely only on the information contained in this prospectus and any free writing prospectus prepared by us. We, the Selling Stockholder and the underwriters have not authorized anyone to provide you with different or additional information. We, the Selling Stockholder and the underwriters are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. The information in this prospectus is current as of the date such information is presented. Our business, financial condition, liquidity, results of operations and prospects may have changed since those dates.

We use market data and industry forecasts and projections throughout this prospectus, and in particular in the sections entitled “Industry Overview and Market Opportunity” and “Business and Properties.” These sources generally state that the information they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. The forecasts and projections are based on industry surveys and the preparers’ experience in the industry, and there can be no assurance that any of the forecasts or projections will be achieved. We believe that the surveys and market research others have performed are reliable, but we have not independently investigated or verified this information. In addition, the statements and projections obtained from 451 Research, LLC and International Data Corporation that we have included in this prospectus have not been expertized and are, therefore, solely our responsibility. As a result, 451 Research, LLC and International Data Corporation do not and will not have any liability or responsibility whatsoever for any market data and industry statements and forecasts or projections that are contained in this prospectus or otherwise disseminated in connection with the offer or sale of our Class A common stock. If you purchase our Class A common stock, your sole recourse for any alleged or actual inaccuracies in the market data and industry statements and any forecasts or projections used in this prospectus will be against us.

Until , 2013 (25 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

Class A and Class B Common Stock and OP units

Following this offering, we will have two classes of common stock, Class A common stock and Class B common stock. Our Class B common stock is designed to give the holder thereof a right to vote that is proportional to such holder’s economic interest in our company on a fully diluted basis and therefore does not provide any disproportionate voting rights. Without the votes afforded by the Class B common stock, a holder of OP units (as defined below) in QualityTech, LP, or our operating partnership, would not have a vote proportionate to its economic interest, as OP units have no voting rights with respect to QTS Realty Trust, Inc. matters. References in this prospectus to “common stock” refer either to our Class A common stock or to our Class A common stock and Class B common stock collectively, as the context requires; it does not refer solely to our Class B common stock. Our Class B common stock will not be listed on the New York Stock Exchange. Chad L. Williams, our Chairman and Chief Executive Officer, has elected to exchange one OP unit out of every 50 OP units owned by him or entities controlled by him immediately prior to the commencement of this offering for shares of our Class B common stock on a one-for-one basis. Each outstanding share of Class B common stock entitles its holder to 50 votes on all matters on which Class A common stockholders are entitled to vote, including the election of directors, and holders of shares of Class A common stock and Class B common stock will vote together as a single class. The Class B common stock automatically converts into Class A common stock in certain circumstances and is convertible at any time into Class A common stock at the option of the holder. Holders of our Class A common stock and Class B common stock have equal dividend rights. See “Description of Securities.”

Interests in our operating partnership are denominated in units of limited partnership interest. Following completion of this offering and our formation transactions, our operating partnership will have two classes of limited partnership interest authorized and outstanding—OP units and Class RS LTIP units. References in this prospectus to “LTIP units” refer to our operating partnership’s Class O LTIP units and Class RS LTIP units collectively. References in this prospectus to “OP units” refer to the common units of limited partnership interest in our operating partnership. References in this prospectus to “units of limited partnership interest” or “limited partnership units” refer to both the OP units and the LTIP units collectively. When vested, LTIP units are convertible by the holder into OP units on the terms set forth in our operating partnership’s partnership agreement. OP units are redeemable for cash or, at our election, shares of our Class A common stock on a one-for-one basis, beginning one year after the closing of this offering. See “Description of the Partnership Agreement of QualityTech, LP.”

The term “fully diluted basis” means all outstanding shares of our Class A common stock at such time, plus (i) shares of Class A common stock that may be issuable upon the redemption of OP units (assuming (a) LTIP units are converted into OP units in accordance with their terms and (b) all outstanding OP units are redeemed for shares of Class A common stock on a one-for-one basis) and (ii) shares of Class A common stock issuable upon the conversion of shares of Class B common stock on a one-for-one basis, but excluding options to acquire shares of Class A common stock expected to be outstanding upon completion of this offering. This definition is not the same as the meaning of “fully diluted” under generally accepted accounting principles in the United States of America, or GAAP.

PROSPECTUS SUMMARY

You should read the following summary together with the more detailed information regarding our company, including under the caption “Risk Factors,” as well as our predecessor’s consolidated financial statements, our pro forma financial statements and the combined statements of revenues and certain operating expenses of our Sacramento data center, and, in each case, the related notes appearing elsewhere in this prospectus. Unless the context requires otherwise, references in this prospectus to “we,” “our,” “us” and “our company” refer to QTS Realty Trust, Inc., a Maryland corporation, together with its consolidated subsidiaries after giving effect to the formation transactions described in this prospectus, including QualityTech, LP, a Delaware limited partnership, which we refer to in this prospectus as our “operating partnership” or “predecessor.” Unless otherwise indicated, the information contained in this prospectus assumes that the underwriters’ option to purchase additional shares is not exercised and that the common stock to be sold in this offering is sold at $ per share, the mid-point of the price range set forth on the cover of this prospectus.

Overview

We believe that our fully integrated platform sets us apart from our competitors in the data center industry and makes our offerings more attractive to customers. Our spectrum of core data center products, which we refer to as our “3Cs”, consists of Custom Data Center, Colocation and Cloud and Managed Services. Our Custom Data Center, or C1, product features large, private spaces that house customer-critical IT infrastructure and we believe provides our customers with a cost-effective, efficient and low-risk alternative to building, buying or expanding their own data centers. Our Colocation, or C2, product features data center space in the form of leased cages, cabinets or suites, which typically provide smaller amounts of space than our C1 product, to house customer IT infrastructure. We offer our Cloud and Managed Services, or C3, products through a portfolio of highly secure, regulatory compliant and scalable IT infrastructure and services designed to support varied business applications and requirements. Our Cloud product offers a private cloud solution (on-demand access to a pool of servers) through QTS Cloud Pods, which are installed in our larger data centers adjacent to the interconnect hubs in each facility. Our Managed Services are support services that include the management of networks, security, operating systems and data back-up, as well as applications monitoring and testing.

Our C1, C2 and C3 products represented approximately 38%, 51% and 11%, respectively, of our monthly recurring revenue, or MRR, as of June 30, 2013. According to 451 Research, LLC, we are the only national multi-tenant data center provider to offer a full complement of solutions catering to a broad range of customers, which includes wholesale data center (or custom data centers), colocation, interconnection (connection and data exchange between multiple communication carriers and customers), hosting (making websites accessible on the Internet) and/or cloud services.

Our Portfolio

We operate a portfolio of 10 data centers across seven states, located in some of the top U.S. data center markets plus other high-growth markets. We own two of the largest multi-tenant data centers in the world, including the fifth largest data center in the world according to a Forbes magazine article published in November 2012. We believe that our data centers are best-in-class and engineered to among the highest specifications commercially available to customers. Our data center portfolio contains approximately 3.8 million gross square feet of space (approximately 92% of which is wholly owned by us). As of June 30, 2013, our data center portfolio included approximately 714,000 raised floor operating net rentable square feet, or NRSF, out of approximately 1.8 million “basis-of-design” raised floor square feet. Our “basis-of-design” represents the total data center raised floor potential of our existing data center facilities or the estimated amount of space in our existing buildings that could be leased following full build-out, depending on the configuration that we deploy.

Our facilities collectively have access to over 500 megawatts, or MW, of gross utility power with 390 MW of available utility power, which is the installed power capacity that can be delivered to the facility by the local utility provider. We believe such access to power gives us a competitive advantage in redeveloping data center space, since access to power is usually the most limiting and expensive component in data center redevelopment.

Operating Properties

The following table presents an overview of the initial portfolio of operating properties that we own or lease, referred to herein as our operating properties, based on information as of June 30, 2013:


					Operating Net Rentable Square Feet (Operating NRSF)(3)											Annualized Rent(8)		Available Utility Power (MW)(9)		Total Available for Redevelopment (NRSF)(10)
Property	Year Acquired(1)		Gross Square Feet(2)		Raised Floor(4)		Office & Other(5)		Supporting Infrastructure(6)		Total		% Leased(7)			Annualized Rent(8)		Available Utility Power (MW)(9)		Total Available for Redevelopment (NRSF)(10)
Richmond, VA		2010		1,318,353		59,930		27,214		91,342		178,486		89.7	%	$	12,319,848		110		1,084,759
Atlanta, GA (Metro)		2006		968,695		358,016		24,851		305,291		688,158		84.9	%		60,572,339		72		237,270
Dallas, TX*		2013		698,000		—		—		—		—		N/A			—		140		698,000
Suwanee, GA		2005		367,322		140,422		4,368		101,191		245,981		67.1	%		36,665,202		36		74,000
Santa Clara, CA**		2007		135,322		55,494		945		45,721		102,160		88.6	%		18,778,846		11		22,000
Jersey City, NJ***		2006		122,448		29,064		14,220		35,387		78,671		88.7	%		8,528,583		7		25,660
Sacramento, CA		2012		92,644		45,595		3,592		27,100		76,287		60.7	%		11,739,426		8		9,423
Overland Park, KS***		2003		32,706		2,493		—		5,338		7,831		78.3	%		604,201		1		—
Miami, FL		2008		30,029		19,887		—		6,592		26,479		51.9	%		3,479,738		4		—
Wichita, KS		2005		14,000		2,612		2,854		8,534		14,000		100.0	%		222,120		1		—

Total/weighted average				3,779,519		713,513		78,044		626,496		1,418,053		81.0	%	$	152,910,303		390		2,151,112

*	This facility was acquired in February 2013 and is under redevelopment.

**	Owned facility subject to long-term ground sublease.

***	Represents facilities that we lease.

(1)	Represents the year a property was acquired or, in the case of a property under lease, the year our initial lease commenced for the property.

(2)

With respect to our owned properties, gross square feet represents the entire building area. With respect to leased properties, gross square feet represents that portion of the gross square feet subject to our lease. This includes approximately 210,354 square feet of our own office space, which is not included in operating NRSF.

(3)	Represents the total square feet of a building that is currently leased or available for lease plus developed supporting infrastructure, based on engineering drawings and estimates, but does not include space held for redevelopment or space used for our own office space.

(4)	Represents management’s estimate of the portion of operating NRSF of the facility with available power and cooling capacity that is currently leased or readily available to be leased to customers as data center space based on engineering drawings, inclusive of raised floor common areas.

(5)	Represents the operating NRSF of the facility other than data center space (typically office and storage space) that is currently leased or available to be leased.

(6)	Represents required data center support space, including mechanical, telecommunications and utility rooms, as well as building common areas.

(7)

Calculated as data center raised floor that is subject to a signed lease for which billing has commenced as of June 30, 2013 divided by leasable raised floor based on the current configuration of the properties (522,965 square feet as of June 30, 2013), expressed as a percentage. Leasable raised floor is the amount of raised floor square footage that we have leased plus the available capacity of raised floor square footage that is in a leasable format as of a particular date and according to a particular product configuration.

(8)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases (which represent customer leases that have been executed but for which lease payments have not commenced) as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(9)	Represents installed power capacity that can be delivered to the facility by the local utility provider. As of June 30, 2013, 117 MW of the total available utility power could be delivered to the data center floor for customer use.

(10)	Reflects space under roof that could be developed into operating NRSF in the future, excluding space currently used by us for our own office space, which could also be repurposed in the future.

Note: The information above excludes our approximately 35,000 gross square foot facility at Lenexa, Kansas, which is not an operating data center.

Redevelopment Pipeline

The following table presents an overview of our redevelopment pipeline, based on information as of June 30, 2013.


	Redevelopment NRSF
	Under Construction(1)								Near Term(2)						Future Available(3)
Property	Raised Floor		Office & Other		Supporting Infrastructure		Total Under Construction		Raised Floor		Office/Other/ Supporting Infrastructure		Total Near Term		Raised Floor		Office/Other/ Supporting Infrastructure		Total Future Available		Total Available for Redevelopment (NRSF)
Richmond		78,000		5,000		45,320		128,320		44,000		63,300		107,300		373,000		476,139		849,139		1,084,759
Atlanta Metro		35,000		5,270		—		40,270		62,600		27,800		90,400		71,600		35,000		106,600		237,270
Dallas		26,000		22,000		30,600		78,600		—		—		—		236,000		383,400		619,400		698,000
Suwanee		45,000		—		—		45,000		—		—		—		29,000		—		29,000		74,000
Santa Clara		12,000		—		—		12,000		—		—		—		10,000		—		10,000		22,000
Jersey City		—		—		4,419		4,419		—		—		—		21,241		—		21,241		25,660
Sacramento		9,000		—		—		9,000		—		—		—		423		—		423		9,423

Totals		205,000		32,270		80,339		317,609		106,600		91,100		197,700		741,264		894,539		1,635,803		2,151,112

(1)	Reflects NRSF at a facility which we expect will be operational by June 30, 2014.

(2)	Reflects NRSF at a facility which we expect will be operational between June 30, 2014 and June 30, 2016. Redevelopment of certain of this space is at our discretion and will depend on a number of factors, including our estimate of the demand for data center space in the applicable market.

(3)

Reflects NRSF at a facility which we expect to redevelop in the future, but at this time such space is expected to become operational after June 30, 2016. The redevelopment of this space is at our discretion and will depend on a number of factors, including availability of capital and our estimate of the demand for data center space in the applicable market.

The table below sets forth our estimated costs for completion of our seven redevelopment projects currently under construction and expected to be operational by June 30, 2014 (dollars in millions):


	Under Construction Costs
Property	Actual(1)		Estimated Cost to Completion(2)		Total		Expected Completion Date
Richmond	$	53	$	25	$	78		Q2 2014
Atlanta Metro		7		47		54		Q2 2014
Dallas		5		83		88		Q2 2014
Suwanee		11		5		16		Q3 2013
Santa Clara		3		25		27		Q2 2014
Jersey City		0.3		3		4		Q4 2013
Sacramento		3		7		10		Q3 2013

Totals	$	82	$	195	$	277

(1)	Actual costs incurred for NRSF under construction through June 30, 2013 (excluding acquisition costs).

(2)	Represents management’s estimate of the additional costs required to complete the current NRSF under construction. There may be an increase in costs if customers require greater power per area of use, or power density.

In addition to projects currently under construction, our near term redevelopment projects are expected to be delivered in a modular manner, and we currently expect to invest between $110 and $155 million of additional capital to complete these near term projects. We have also commenced certain pre-development activities with respect to future redevelopment projects that are not expected to be completed until after June 30, 2016. The ultimate timing and completion of, and the commitment of capital to, our future redevelopment projects is within our discretion and will depend upon a variety of factors, including the availability of financing and our estimation of the future market for data center space in each particular market.

Market Opportunity

According to 451 Research, LLC, or 451 Research, the North American multi-tenant data center market, which includes wholesale and retail colocation offerings, is estimated to grow from $8.2 billion in 2011 to $13.7 billion in 2014, representing a compound annual growth rate of 19%. In addition, according to 451 Research, the market for cloud infrastructure-as-a-service, or IaaS, which allows customers to install their operating system and application software on virtual servers, is estimated to grow from $1.4 billion in 2011 to $5.2 billion in 2014, representing a compound annual growth rate of 55%. Combined, this represents an estimated cumulative compound annual growth rate of over 25% for the multi-tenant data center and cloud IaaS markets from 2011 to 2014.


	Data Center Offerings
Typical Characteristics	Wholesale	Retail Colocation	Cloud and Managed Services

Power	500 kW or more; costs are passed on to customers (metered power)	Specified kW included in lease; overages charged separately	Bundled with service

Space	3,000 square feet or more of raised floor	Up to 3,000 square feet of raised floor	Small amounts of space; customers rent managed virtual servers

Lease Term	5 to 10 years	Up to 3 years	Up to 3 years

Customer	Large corporations, government agencies and global Internet businesses	Large corporations, small and medium businesses and government agencies	Large corporations, small and medium businesses and government agencies

Industry Demand Drivers

We believe that the data center industry enjoys strong growth dynamics principally driven by the following trends:

The Rapid Growth of Data is Transforming the Way Businesses Operate. We believe that as the growth of data accelerates, large and small organizations increasingly will seek sophisticated and enhanced information and content management, security, storage infrastructure and archiving solutions, which will translate into continued demand growth for data center space.

Increasing Demand to Outsource IT Functions. We believe that the data center industry has reached a tipping point in the last decade whereby the significant security and the required power per area of use, or power density, of customers can be more efficiently delivered through purpose-built facilities rather than at a customer’s existing premises, such as office buildings. We believe that businesses continue to recognize that outsourcing could improve their cost structure, accelerate the deployment process and lower their overall IT risk, and that they are increasingly looking to outsource their IT infrastructure requirements to third-party data center operators.

Attractive Supply / Demand Imbalance

We believe that a supply and demand imbalance currently exists in certain markets for secure, high-quality, high-power, fully redundant facilities and will persist over the next several years. According to 451 Research, average utilization in the top ten U.S. data center markets will increase from 82% in 2012 to 91% in 2014, due to demand growth considerably outpacing supply growth in these markets over that period. We believe this imbalance will be driven by a number of factors in addition to the industry demand drivers described above, including the following:

High Barriers to Entry. Several factors make it difficult for other companies to enter the data center market, including limited land suitable for data center development with access to sufficient power and significant fiber optic networks, the substantial upfront costs associated with developing modern data center infrastructure and the significant knowledge and expertise required for data center design and development.

High Customer Retention. We believe that customer retention in the data center industry is higher than in more traditional forms of real estate, such as office or retail. Because data centers typically house customers’ critical networking and computer equipment, the cost, downtime and execution risk incurred by a customer in relocating its equipment to another location are substantial.

Our Competitive Strengths

We believe that we are uniquely positioned in the data center industry and distinguish ourselves from other data center providers through the following competitive strengths:

Fully Integrated Platform Offers Scalability and Flexibility to Our Customers and Us. Our differentiated, fully integrated 3Cs approach, allows us to serve a wide variety of customers in a large, addressable market and to scale to the level of IT infrastructure outsourcing desired by our customers. We believe that customers who are looking to outsource their IT infrastructure usually anticipate future growth and/or evolving technology needs and prefer to remain with a single provider. As of June 30, 2013, approximately 39% of our monthly recurring revenue, or MRR, was attributable to customers who use more than one of our 3Cs products.

We believe our ability to offer a full spectrum of 3Cs product offerings enhances our leasing velocity, allows for an individualized pricing mix, results in more balanced lease terms and optimizes cash flows from our assets.

Platform Anchored by Strategically Located, Owned “Mega” Data Centers. Our larger “mega” data centers, Atlanta Metro, Dallas, Richmond and Suwanee, allow us to deliver our fully integrated platform and 3Cs products by building and leasing space more efficiently than in single-use or smaller data centers. We believe that our data centers are engineered to among the highest specifications commercially available. Our national portfolio of 10 data centers are strategically located in nine metropolitan areas, including four of the nation’s top multi-tenant data center markets (Atlanta, Dallas, New York/New Jersey and Silicon Valley), as defined by 451 Research, along with three metropolitan areas that we believe represent high-growth data center markets (Miami, Richmond and Sacramento). As of June 30, 2013, over 81% of our MRR was derived from our data centers in the top multi-tenant data center markets in the United States.

Significant Expansion Opportunity within Existing Data Center Facilities at Lower Costs. We have developed substantial expertise in redeveloping facilities through the acquisition and redevelopment of all 10 of our operating facilities. Our data center redevelopment model is primarily focused on redeveloping space within our current facilities, which allows us to build additional leasable raised floor at a lower incremental cost compared to ground-up development and to rapidly scale our redevelopment in a modular manner to coincide with customer acquisition and our estimates of optimal product utilization between our C1, C2 and C3 products.

Diversified, High-Quality Customer Base . We have significantly grown our customer base from 510 in 2009 to over 870 as of June 30, 2013, with no single customer accounting for more than 8% of our MRR and only three of our customers individually accounting for more than 3% of our MRR. As of June 30, 2013, Fortune 1000 and equivalently sized private and/or foreign companies accounted for approximately 57% of our MRR, including our booked-not-billed MRR balance (which represents customer leases that have been executed but for which lease payments have not commenced) as of that date. Our focus on our customers and our ability to scale with their needs allows us to achieve a low rental churn rate (which is the MRR impact from a customer completely departing our platform in a given period compared to the total MRR at the beginning of the period). For the six months ended June 30, 2013, we experienced a rental churn rate of 1.5%.

Robust In-House Sales Capabilities . Our in-house sales force has deep knowledge of our customers’ businesses and IT infrastructure needs and is supported by sophisticated sales management, reporting and incentive systems. Our internal sales force is structured by product offerings, specialized industry segments and, with respect to our C2 product, by geographical region. Therefore, unlike certain other data center companies, we are less dependent on data center brokers to identify and acquire or renew our customers, which we believe is a key enabler of our 3Cs strategy. During the past three years, approximately 82% of new customers were identified and acquired solely by our in-house sales force.

Balance Sheet Positioned to Fund Continued Growth. Upon completion of this offering, we expect to have approximately $ million of cash available on our balance sheet and the ability to borrow up to an additional $350 million under our unsecured revolving credit facility. We believe we will be appropriately capitalized with sufficient funds and available borrowing capacity to pursue our anticipated business and growth strategies.

Founder-Led Management Team with Proven Track Record and Strong Alignment with Our Stockholders. Our senior management team has significant experience in the ownership, management and redevelopment of commercial real estate through multiple business cycles. We believe our executive management team’s experience will enable us to capitalize on industry relationships by providing an ongoing pipeline of attractive leasing and redevelopment opportunities. Upon completion of this offering, our senior management team is expected to own approximately % of our common stock on a fully diluted basis, and therefore their interests will be highly aligned with those of our stockholders.

Business and Growth Strategies

Our primary business objectives are to maximize cash flow and to achieve long-term growth in our business in order to maximize stockholder value through the prudent management of a high-quality portfolio of properties and our fully integrated platform used to deliver our 3Cs product offerings. Our business and growth strategies to achieve these objectives include the following elements:

Continued Redevelopment of Our Existing Footprint. We believe our redevelopment pipeline provides us with a multi-year growth opportunity at very attractive risk-adjusted returns without the need to construct new buildings or acquire additional properties or land for development. Currently, we expect to complete the redevelopment of 312,000 additional square feet of raised floor by June 30, 2016. Our redevelopment pipeline, including future redevelopment projects, will add approximately 160 MW of incremental power and approximately 1.1 million potential square feet of raised floor space, which would allow us to almost triple our leased raised floor square footage without constructing or acquiring any new buildings. We currently target a stabilized return on invested capital of at least 15% on average for our redevelopment projects.

Increase Cash Flow of Our In-Place Data Center Space. We seek to increase cash flow by proactively managing, leasing and optimizing space, rent and occupancy levels across our portfolio. Over the past few years, we have reclaimed space that we have re-leased at higher rates. As of June 30, 2013, our existing data center facilities had approximately 99,000 square feet of raised floor available for lease. We believe this space, together with available power, provides us an opportunity to generate incremental revenue within our existing data center footprint without extensive capital expenditures.

Expand Our Cloud and Managed Services Product Offerings. We intend to continue to expand our C3 product offerings and penetration by providing self-service and automation capabilities and targeting both new and existing customers, as our Cloud and Managed Services products can be used as an alternative to, or in conjunction with, our C1 and C2 products. Through our C3 product offerings, we believe that we will be able to capture a larger addressable market, increase our ability to retain customers and increase cash flow from our properties.

Increase Our Margins through Our Operating Leverage. We anticipate that our business and growth strategies can be substantially supported by our existing platform, will not require significant incremental general and administrative expenditures and will allow us to continue to benefit from operational leverage and increase operating margins. This operational leverage

was demonstrated historically in 2011 and 2012 when 100% of our incremental revenue was reflected in our property-level net operating income. Moreover, we also achieved 73% growth in Adjusted EBITDA from 2010 to 2012 (on a pro forma basis) compared to a 31% growth in revenue during the same period (on a pro forma basis).

Selectively Expand Our Fully Integrated Platform to Other Strategic Markets. We will selectively pursue attractive opportunities in strategic locations where we believe our fully integrated platform would give us a competitive advantage in the acquisition and leasing of that facility or portfolio of assets. We also believe we can integrate additional data center facilities into our platform without adding significant incremental headcount or general and administrative expenses, as evidenced by our recent acquisition of our Sacramento data center.

Summary Risk Factors

You should carefully consider the following important risks, as well as the additional risks described in “Risk Factors,” before making a decision to invest in our Class A common stock:

Because we are focused on the ownership, operation and redevelopment of data centers, any decrease in the demand for data center space or managed services could have a material adverse effect on us.

Our data center infrastructure may become obsolete or unmarketable and we may not be able to upgrade our power, cooling, security or connectivity systems cost-effectively or at all.

We face considerable competition in the data center industry and may be unable to renew existing leases, lease vacant space or re-let space on more favorable terms, or at all, as leases expire, which could have a material adverse effect on us.

Our two largest properties in terms of annualized rent, Atlanta Metro and Suwanee, collectively accounted for approximately 64% of our annualized rent as of June 30, 2013, and any inability, temporarily or permanently, to fully and consistently operate either of these properties could have a material adverse effect on us.

Our future growth depends upon the successful redevelopment of our existing properties, and any delays or unexpected costs in such redevelopment could have a material adverse effect on us.

We depend on third parties to provide Internet, telecommunication and fiber optic network connectivity to the customers in our data centers, and any delays or disruptions in service could have a material adverse effect on us.

Power outages, limited availability of electrical resources and increased energy costs could have a material adverse effect on us.

Upon completion of this offering, our pro forma indebtedness outstanding as of June 30, 2013 will be approximately $315 million, which will expose us to interest rate fluctuations and the risk of default thereunder.

We have no operating history as a public company, and our inexperience may impede our ability to successfully manage our business.

Upon completion of this offering and our formation transactions, Chad L. Williams and General Atlantic will own approximately % and % of our outstanding common stock on a fully diluted basis, respectively, and will have the ability to exercise significant influence on our company and any matter presented to our stockholders.

Our tax protection agreement, during its term, could limit our ability to sell or otherwise dispose of certain properties and may require our operating partnership to maintain certain debt levels that otherwise would not be required to operate our business.

Our formation transactions were not negotiated in arm’s length transactions, and the value received by GA REIT and Mr. Williams as a result of the formation transactions and this offering may exceed the fair market value of the assets they originally contributed to our operating partnership.

Following the repayment of certain indebtedness with the net proceeds of this offering, management will have broad discretion in the application of any remaining net proceeds, and we may not use the proceeds effectively.

Our cash available for distribution to stockholders may not be sufficient to pay distributions at expected or REIT-required levels, or at all, and we may need to borrow or rely on other third-party capital in order to make such distributions, as to which no assurance can be given, which could cause the market price of our common stock to decline significantly.

If we do not qualify as a REIT, or fail to remain qualified as a REIT, we will be subject to federal income tax as a regular corporation and could face significant tax liability, which would reduce the amount of cash available for distribution to our stockholders and could have a material adverse effect on us.

Structure and Formation of Our Company

Our Operating Partnership

Following the completion of this offering, we will be the sole general partner and majority owner of our operating partnership. Substantially all of our assets will be held by, and our operations will be conducted through, our operating partnership. We will contribute the net proceeds received by us from this offering to our operating partnership in exchange for OP units therein. Our interest in our operating partnership will generally entitle us to share in cash distributions from, and in the profits and losses of, our operating partnership in proportion to our percentage ownership. As the sole general partner of our operating partnership, we will generally have the exclusive power under the partnership agreement to manage and conduct its business and affairs, subject to certain limited approval and voting rights of the limited partners, which are described more fully below in “Description of the Partnership Agreement of QualityTech, LP.” Our board of directors will manage our business and affairs.

Beginning on or after the date that is the later of (1) 12 months from the beginning of the first full calendar month following the completion of this offering and (2) the date of issuance of the OP units, each limited partner of our operating partnership will have the right to require our operating partnership to redeem part or all of its OP units for cash, based upon the value of an equivalent number of shares of our common stock at the time of the redemption, or, at our election, shares of our common stock on a one-for-one basis, subject to certain adjustments and the restrictions on ownership and transfer of our stock set forth in our charter and described under the section entitled “Description of Securities—Restrictions on Ownership and Transfer.” Each redemption of OP units will increase our percentage ownership interest in our operating partnership and our share of its cash distributions and profits and losses. See “Description of the Partnership Agreement of QualityTech, LP.”

Our Taxable REIT Subsidiary

We currently provide our Cloud and Managed Services product to our customers through Quality Technology Services Holding, LLC, a Delaware limited liability company, which is wholly owned by our

operating partnership. Quality Technology Services Holding, LLC has elected to be treated as a taxable REIT subsidiary, or TRS, for federal income tax purposes. A taxable REIT subsidiary generally may provide non-customary and other services to our customers and engage in activities that we may not engage in directly without adversely affecting our qualification as a REIT. We may form additional taxable REIT subsidiaries in the future, and our operating partnership may contribute some or all of its interests in certain wholly owned subsidiaries or their assets to our taxable REIT subsidiaries. Any income earned by our taxable REIT subsidiaries will be included in our income in our consolidated financial statements, but will not be included in our taxable income for purposes of the 75% or 95% gross income tests, except to the extent such income is distributed to us as a dividend, in which case such dividend income will qualify under the 95%, but not the 75%, gross income test. Because a taxable REIT subsidiary is subject to federal income tax, and state and local income tax (where applicable) as a corporation, the income earned by our taxable REIT subsidiaries generally will be subject to an additional level of tax as compared to the income earned by our other subsidiaries.

Formation Transactions

QualityTech, LP, our operating partnership and our predecessor, was formed in 2009 in connection with an investment by General Atlantic in our operating partnership.

We were formed as a Maryland corporation on May 17, 2013.

We will consummate a tax-free merger transaction in which the entity that holds General Atlantic’s interest in our predecessor, or GA REIT, will merge with and into us and we will succeed to GA REIT’s majority limited partnership interest in our predecessor, which then will become our operating partnership. Pursuant to the merger, we will issue shares of our Class A common stock to General Atlantic, and $105,000 in cash (plus accumulated dividends, if any) will be paid to the current preferred shareholders of GA REIT, in each case as consideration for their shares of GA REIT.

Mr. Williams will contribute to our operating partnership all of his ownership interest in QualityTech GP, LLC, the current general partner of our operating partnership, in exchange for 1,000 OP units, and we will be admitted as the sole general partner of our operating partnership. Following this contribution, we will dissolve QualityTech GP, LLC.

We will issue shares of our Class B common stock to Mr. Williams in exchange for an equivalent number of OP units. The OP units exchanged will represent 2% of Mr. Williams’ OP units. Each outstanding share of Class B common stock entitles its holder to 50 votes on all matters on which Class A common stockholders are entitled to vote, including the election of directors, and holders of shares of Class A common stock and Class B common stock will vote together as a single class. Our Class B common stock is designed to give the holder thereof a right to vote that is proportional to such holder’s economic interest in our company on a fully diluted basis, and therefore does not provide any disproportionate voting rights. The Class B common stock automatically converts into Class A common stock in certain circumstances and is convertible at any time into Class A common stock at the option of the holder.

In order to simplify our operating partnership’s outstanding limited partnership units, we will eliminate our outstanding Class O LTIP units (which is a class of incentive units that previously

were granted to certain employees and non-employee directors of our operating partnership) in a manner that preserves the economic position of each holder of Class O LTIP units and provides additional incentives by:

converting each of the outstanding Class O LTIP units into a fraction of an OP unit representing the “in the money” value of the converted Class O LTIP unit, which is calculated as the difference between the value of an OP unit on the date of conversion and the value of an OP unit on the date of grant of such Class O LTIP unit, which will result in an aggregate issuance of OP units (based on the mid-point of the price range set forth on the cover of this prospectus) upon the closing of this offering, and

granting to each former holder of Class O LTIP units options to purchase a number of shares of our Class A common stock equal to the number of such holder’s converted Class O LTIP units, which will result in an aggregate grant of options to acquire shares of Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) upon the closing of this offering with an exercise price equal to the public offering price of our Class A common stock in this offering.

The OP units and stock options issued upon conversion of each holder’s Class O LTIP units will be subject to vesting to the same extent as the holder’s Class O LTIP units prior to conversion. The options will be granted under our 2013 Equity Incentive Plan and will expire ten years from the date of grant. See “Structure and Formation of Our Company—Formation Transactions” for a further description of the conversion terms of Class O LTIP units.

Our Structure

The following diagram depicts our ownership structure upon completion of this offering, based on the mid-point of the price range set forth on the cover of this prospectus.

LOGO

On a fully diluted basis, our public stockholders, General Atlantic and our directors, executive officers and employees and their affiliates are expected to own %, % and %, respectively, of our outstanding common stock. If the underwriters exercise their option to purchase additional shares of our common stock in full, on a fully diluted basis, these parties are expected to own %, % and %, respectively, of our outstanding common stock.

Benefits to Related Parties

Upon completion of this offering, certain owners of our operating partnership, or continuing investors, directors, members of our senior management team and employees will receive material benefits, including the following:

We will issue shares of our Class B common stock to Chad L. Williams, our Chairman and Chief Executive Officer, in exchange for an equivalent number of OP units. The OP units exchanged will represent 2% of Mr. Williams OP units. Each outstanding share of Class B common stock entitles its holder to 50 votes on all matters on which Class A common stockholders are entitled to vote, including the election of directors, and holders of shares of Class A common stock and Class B common stock will vote together as a single class. Our Class B common stock is designed to give the holder thereof a right to vote that is proportional to such holder’s economic interest in our company on a fully diluted basis and therefore does not provide any disproportionate voting rights.

We will enter into a registration rights agreement with our continuing investors, including certain of our directors and executive officers, pursuant to which we will agree to file one or more registration statements covering the issuance to them of shares of our Class A common stock upon redemption of their OP units. See “Certain Relationships and Related Transactions—Registration Rights” and “Shares Eligible for Future Sale—Registration Rights.”

We will enter into a tax protection agreement with Mr. Williams and his affiliates and family members who own OP units pursuant to which we will agree to indemnify them against certain tax liabilities resulting from: (1) the sale, exchange, transfer, conveyance or other disposition of our Atlanta Metro, Suwanee or Santa Clara data centers in a taxable transaction prior to January 1, 2026, referred to as the protected period; (2) causing or permitting any transaction that results in the disposition by Mr. Williams or his affiliates and family members who own OP units of all or any portion of their interests in the operating partnership in a taxable transaction during the protected period; or (3) our failure prior to the expiration of the protected period to maintain approximately $150 million of indebtedness that would be allocable to Mr. Williams and his affiliates for tax purposes or, alternatively, failing to offer Mr. Williams and his affiliates and family members who own OP units the opportunity to guarantee specific types of the operating partnership’s indebtedness in order to enable them to continue to defer certain tax liabilities. See “Certain Relationships and Related Party Transactions—Tax Protection Agreement.”

We will enter into indemnification agreements with our directors and executive officers providing for the indemnification by us for certain liabilities and expenses incurred as a result of actions brought, or threatened to be brought, against such parties.

We will grant an aggregate of (i) restricted shares of our common stock (based on the mid-point of the price range set forth on the cover of this prospectus), subject to certain vesting requirements, to our executive officers, (ii) options to acquire shares of Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) to our executive officers, (iii) restricted shares of our common stock (based on the mid-point of the price range set forth on the cover of this prospectus), subject to certain vesting requirements, to certain of our independent directors and (iv) options to acquire shares of Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) to certain of our independent directors. See “Management—Executive Compensation—2013 Equity Incentive Plan.”

In order to preserve the economic position of the holders of our Class O LTIP units and provide additional incentives, we will convert our outstanding Class O LTIP units into OP units equal in value to the “in the money” portion of such Class O LTIP units, and we will grant to each former holder of Class O LTIP units options to purchase a number of shares of our Class A common

stock equal to the number of such holder’s converted Class O LTIP units, which will result in an aggregate grant of options to acquire shares of Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) upon the closing of this offering with an exercise price equal to the public offering price of our Class A common stock in this offering. See “Structure and Formation of Our Company—Formation Transactions.”

Restrictions on Ownership of Our Shares

In order to assist us in complying with the limitations on the concentration of ownership of REIT stock imposed by the Internal Revenue Code of 1986, as amended, or the Code, and for strategic reasons, our charter generally prohibits any person (other than a person who has been granted an exception) from actually or constructively owning more than % of the aggregate of the outstanding shares of our common stock by value or by number of shares, whichever is more restrictive, except for certain designated investment entities that may own up to 9.8% of the aggregate of the outstanding shares our common stock, subject to certain conditions. Chad L. Williams, his family members and certain entities controlled by them will be excepted holders under our charter, and none of them will be permitted to own more than % of the aggregate of the outstanding shares of such class or series of our common stock by value or by number of shares, whichever is more restrictive, after application of the relevant attribution rules. In addition, General Atlantic will be an excepted holder under our charter, and no beneficial owner of General Atlantic will be permitted to own more than % of the aggregate of the outstanding shares of such class or series of our common stock by value or by number of shares, whichever is more restrictive, after application of the relevant attribution rules. Our charter permits exceptions to be made for stockholders provided our board of directors determines such exceptions will not jeopardize our qualification as a REIT.

Distribution Policy

To satisfy the requirements to qualify as a REIT, and to avoid paying tax on our income, we intend to make regular quarterly distributions of all, or substantially all, of our REIT taxable income (excluding net capital gains) to our stockholders. We intend to make a pro rata initial distribution with respect to the period commencing on the completion of this offering and ending , 2013, based on a distribution of $ per share for a full quarter. On an annualized basis, this would be $ per share, or an initial annual distribution rate of approximately % based on an assumed initial public offering price at the mid-point of the price range indicated on the cover of this prospectus. We estimate that this initial annual distribution rate will represent approximately % of estimated cash available for distribution to our common stockholders for the 12-month period ending June 30, 2014. We do not plan to reduce our intended initial annual distribution rate if the underwriters exercise their option to purchase additional shares of Class A common stock. Furthermore, we plan to maintain this rate for the 12-month period following completion of this offering unless circumstances change materially. All distributions will be made at the discretion of our board of directors and will depend on our historical and projected results of operations, liquidity and financial condition and other factors our board of directors deem relevant from time to time. No assurance can be given that our estimated cash available for distribution to our stockholders will be accurate or that our actual cash available for distribution to our stockholders will be sufficient to pay distributions to them at any expected or REIT-required level or at any particular yield, or at all. See “Distribution Policy.”

Our Tax Status

We intend to elect and qualify to be taxed as a REIT under the Code beginning with our taxable year ending December 31, 2013. We believe that our organization and proposed method of operation

will enable us to meet the requirements for qualification and taxation as a REIT for federal income tax purposes, but we cannot assure you that our operations will allow us to satisfy the requirements for qualification and taxation as a REIT. To qualify and maintain our qualification as a REIT, we must meet a number of organizational and operational requirements on a continuing basis, including the requirement that we annually distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains, to our stockholders.

As a REIT, we generally will not be subject to U.S. federal income tax on REIT taxable income we currently distribute to our stockholders. If we fail to qualify as a REIT in any taxable year and do not qualify for certain statutory savings provisions, we will be subject to federal, state and local income tax at regular corporate rates. Even if we qualify for taxation as a REIT, we may be subject to some federal, state and local taxes on our income and property, and our TRSs will be subject to federal, state and local income taxes. See “U.S. Federal Income Tax Considerations.”

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statement and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We have not yet made a decision as to whether we will take advantage of any or all of these exemptions. If we do take advantage of any of these exemptions, we do not know if some investors will find our common stock less attractive, and the result may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to “opt out” of this extended transition period, and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for all public companies that are not emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

We will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of this offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt or (iv) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, or the Exchange Act.

Our Principal Office

Our principal executive office is located at 12851 Foster Street, Overland Park, Kansas 66213. Our telephone number is (913) 814-9988. Our web address is . The information on or accessible through our website does not constitute a part of this prospectus.

This Offering



Class A common stock offered by us		shares(1)

Class A common stock offered by the Selling Stockholder		shares(1)

Class A common stock to be outstanding upon completion of this offering		shares(1)(2)

Class B common stock to be outstanding after the formation transactions		shares

Class A common stock, Class B common stock and units of limited partnership interest to be outstanding upon completion of this offering and the formation transactions (excluding OP units held by us)		shares of Class A common stock, Class B common stock and units of limited partnership interest(1)(2)(3)

Use of proceeds		The net proceeds of this offering to us, after deducting underwriting discounts and commissions and estimated expenses, will be approximately $ million ($ million if the underwriters exercise their option to purchase additional shares of Class A common stock in full). We intend to contribute the net proceeds received by us from this offering to our operating partnership in exchange for OP units. Our operating partnership intends to use the proceeds as follows:

		Ÿ approximately $ million to repay amounts outstanding under our unsecured revolving credit facility; and Ÿ the remaining balance to fund ongoing development costs, to fund future acquisitions and for general corporate purposes.

		Affiliates of each of the underwriters of this offering are lenders under our unsecured credit facility. As described above, our operating partnership intends to use a portion of the net proceeds to repay borrowings outstanding under our unsecured revolving credit facility. As such, these affiliates will receive their proportionate shares of any amount of our unsecured revolving credit facility that is repaid with the net proceeds of this offering. See “Underwriting.” We will not receive any proceeds from the sale of our Class A common stock by the Selling Stockholder.



Risk Factors		See “Risk Factors” and other information included in this prospectus for a discussion of factors that you should consider before making a decision to invest in our Class A common stock.

Proposed New York Stock Exchange symbol		QTS

(1)	Excludes shares issuable by us upon the exercise of the underwriters’ option to purchase up to an additional shares of Class A common stock from us and shares reserved for issuance under our equity incentive plan.

(2)

Includes shares issued to our continuing investors in connection with our formation transactions and restricted shares (based on the mid-point of the price range set forth on the cover of this prospectus) to be issued to certain of our directors, executive officers and employees upon completion of this offering. Excludes options to acquire shares of Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) expected to be outstanding upon completion of this offering and additional shares available for issuance under our equity incentive plan.

(3)

Includes OP units, Class RS LTIP units and shares of Class B common stock expected to be outstanding upon the completion of our formation transactions. The OP units may, subject to the terms in the operating partnership agreement, be exchanged for cash or, at our option, shares of our Class A common stock on a one-for-one basis generally commencing 12 months after completion of this offering. Class RS LTIP units are convertible by the holder thereof into OP units as described in “Description of the Partnership Agreement of QualityTech, LP.” Shares of Class B common stock are subject to automatic conversion into an equal number of shares of our Class A common stock upon a direct or indirect transfer of Class B common stock or certain OP units held by the holder of such Class B common stock to a person other than a qualified transferee (as defined in our charter). In addition, shares of Class B common stock are convertible at any time into shares of Class A common stock at the option of the holder.

Summary Historical and Pro Forma Financial Data

The following table sets forth summary selected financial data on an historical basis for QualityTech, LP, which is our predecessor. We have not presented historical data for QTS Realty Trust, Inc. because we have not had any corporate activity since our formation other than the issuance of shares of common stock in connection with our initial capitalization and activity in connection with this offering. Accordingly, we do not believe that a discussion of the historical results of QTS Realty Trust, Inc. would be meaningful. Prior to or concurrently with the completion of this offering, we will consummate a series of transactions pursuant to which we will become the sole general partner and majority owner of our predecessor, which then will be our operating partnership, and thereby indirectly acquire the properties and data center business described in this prospectus. We refer to these transactions as our “formation transactions.” Substantially all of our assets will be held by, and our operations will be conducted through, our operating partnership. We will contribute the net proceeds received by us from this offering to our operating partnership in exchange for OP units therein. For more information regarding our predecessor and the formation transactions, please see “Structure and Formation of Our Company.”

The summary selected historical financial data as of December 31, 2012 and 2011 and for each of the years ended December 31, 2012, 2011 and 2010 has been derived from our predecessor’s audited financial statements included elsewhere in this prospectus. The summary selected historical balance sheet data as of December 31, 2010 has been derived from our predecessor’s audited financial statements not otherwise included in this prospectus. The summary selected historical financial data as of June 30, 2013 and for each of the six months ended June 30, 2013 and 2012 has been derived from our predecessor’s unaudited financial statements included elsewhere in this prospectus and includes all adjustments that management considers necessary to present fairly the information set forth therein. The summary selected historical financial data for our predecessor is not necessarily indicative of our results of operations, cash flows or financial condition following the completion of this offering and our formation transactions.

The unaudited pro forma condensed consolidated financial data for the year ended December 31, 2012 and as of and for the six months ended June 30, 2013 are presented as if this offering, the formation transactions, the acquisition of the Sacramento data center in December 2012 and the effect of certain financing transactions as described in the pro forma condensed consolidated financial statements included elsewhere in this prospectus had all occurred on June 30, 2013 for the pro forma condensed consolidated balance sheet and on January 1, 2012 for the pro forma condensed consolidated statement of operations. Our pro forma condensed consolidated financial data is not necessarily indicative of what our actual financial condition and results of operations would have been as of the date and for the periods indicated, nor does it purport to represent our future financial condition or results of operations.

The following table sets forth summary selected financial and operating data on a consolidated historical basis for our predecessor. You should read the following summary selected financial data in conjunction with our pro forma financial statements, our predecessor’s historical consolidated financial statements, the combined statements of revenues and certain operating expenses of our Sacramento data center, and, in each case, the related notes thereto, along with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are included elsewhere in this prospectus.


	Six Months Ended June 30, (unaudited)									Year Ended December 31,
	Pro Forma 2013			2013			2012			Pro Forma 2012 (unaudited)			2012			2011			2010
	($ in thousands)
Statement of Operations Data
Revenues:
Rental	$	68,589		$	68,589		$	59,516		$	131,135		$	120,758		$	104,051		$	92,800
Recoveries from customers		6,322			6,322			4,489			10,613			9,294			12,154			12,506
Cloud and managed services		8,435			8,435			6,883			14,497			14,497			12,173			9,054
Other		1,092			1,092			444			1,385			1,210			2,018			5,795

Total revenues		84,438			84,438			71,332			157,630			145,759			130,396			120,155

Operating expenses
Property operating costs		29,292			29,292			25,556			56,993			51,506			57,900			60,408
Real estate taxes and insurance		2,203			2,203			1,525			4,304			3,632			2,621			2,378
Depreciation and amortization		22,061			22,061			16,394			39,438			34,932			26,165			19,086
General and administrative		19,290			19,290			17,187			36,610			35,986			28,470			22,844
Transaction costs		—			—			—			897			897			—			—
Gain on legal settlement		—			—			—			—			—			(3,357	)		—
Restructuring charge		—			—			3,291			3,291			3,291			—			—

Total operating expenses		72,846			72,846			63,953			141,533			130,244			111,799			104,716

Operating income		11,592			11,592			7,379			16,097			15,515			18,597			15,439

Other income and expense:
Interest income		13			13			46			69			61			71			233
Interest expense		(4,459	)		(11,634	)		(12,393	)		(10,105	)		(25,140	)		(19,713	)		(23,502	)
Other (expense) income, net		—			(3,277	)		(1,434	)		(1,153	)		(1,151	)		136			22,214

Income (loss) before gain on sale of real estate		7,146			(3,306	)		(6,402	)		4,908			(10,715	)		(909	)		14,384
Gain on sale of real estate		—			—			—			948			948			—			—

Net income (loss)	$	7,146		$	(3,306	)	$	(6,402	)	$	5,856		$	(9,767	)	$	(909	)	$	14,384

Other Data (unaudited)
FFO(1)	$	26,763		$	16,311		$	8,753		$	39,931		$	20,253		$	23,047		$	31,771
Operating FFO(1)		26,763			19,588			13,171			45,246			25,568			13,900			2,456
Recognized MRR (in the period)(2)		73,785			73,785			63,188			141,151			128,533			108,942			98,832
MRR (at period end)(2)		12,743			12,743			11,021			11,857			11,857			9,898			9,138
NOI(3)		52,943			52,943			44,251			96,614			90,904			70,011			57,369
EBITDA(4)		33,653			30,376			22,339			55,330			50,244			44,898			56,739
Adjusted EBITDA(4)		34,448			34,448			27,253			60,416			55,330			42,306			34,857


	As of June 30, (unaudited)						As of December 31,
	Pro Forma 2013		2013		2012		Pro Forma 2012 (unaudited)		2012		2011		2010
	($ in thousands)
Balance Sheet Data
Real estate at cost*	$	821,336	$	821,336	$	606,295		N/A	$	734,828	$	555,586	$	432,233
Real estate assets, net**		701,760		701,760		518,357		N/A		631,928		481,050		379,967
Total assets		788,247		758,432		558,539		N/A		685,443		521,056		412,964
Credit facility and mortgages payable		314,903		558,903		461,136		N/A		487,791		407,906		302,765

*	Reflects undepreciated cost of real estate assets, does not include real estate intangible assets acquired in connection with acquisitions.

**	Net investment in real estate includes building and improvements (net of accumulated depreciation), land, and construction in progress.


	Six Months Ended June 30, (unaudited)								Year Ended December 31,
	Pro Forma 2013		2013			2012			Pro Forma 2012 (unaudited)		2012			2011			2010
	($ in thousands)
Cash Flow Data
Cash flow provided by (used for):
Operating activities	$	N/A	$	19,990		$	20,683		$	N/A	$	35,098		$	24,374		$	13,277
Investing activities		N/A		(86,526	)		(66,503	)		N/A		(194,927	)		(118,746	)		(56,574	)
Financing activities		N/A		63,004			44,139			N/A		160,719			94,669			5,610

(1)

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. FFO represents net income (loss) (computed in accordance with GAAP), adjusted to exclude gains (or losses) from sales of property, real estate related depreciation and amortization and similar adjustments for unconsolidated partnerships and joint ventures. We generally calculate Operating FFO as FFO excluding certain non-recurring and primarily non-cash charges and gains and losses that management believes are not indicative of the results of our operating real estate portfolio. We believe that Operating FFO provides investors with another financial measure that may facilitate comparisons of operating performance and liquidity between periods and, to the extent other REITs calculate Operating FFO on a comparable basis, between us and these other REITs.

A reconciliation of net income (loss) to FFO and Operating FFO is presented below:


	Six Months Ended June 30, (unaudited)								Year Ended December 31, (unaudited)
	Pro Forma 2013		2013			2012			Pro Forma 2012			2012			2011			2010
	($ in thousands)
FFO
Net income (loss)	$	7,146	$	(3,306	)	$	(6,402	)	$	5,856		$	(9,767	)	$	(909	)	$	14,384
Real estate depreciation and amortizaton		19,617		19,617			15,155			35,023			30,968			23,956			17,387
Gain on sale of real estate		—		—			—			(948	)		(948	)		—			—

FFO		26,763		16,311			8,753			39,931			20,253			23,047			31,771

Operating FFO
Restructuring charge		—		—			3,291			3,291			3,291			—			—
Write off of unamortized deferred financing costs		—		3,277			1,434			1,434			1,434			—			—
Gain on legal settlement		—		—			—			—			—			(3,357	)		—
Transaction costs		—		—			—			897			897			—			—
Intangible revenue		—		—			—			—			—			(960	)		(4,844	)
Gain on extinguishment of debt		—		—			—			—			—			—			(22,214	)
Unrealized gain on derivatives		—		—			(307	)		(307	)		(307	)		(4,830	)		(2,257	)

Operating FFO	$	26,763	$	19,588		$	13,171		$	45,246		$	25,568		$	13,900		$	2,456

(2)

We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases (which represent customer leases that have been executed but for which lease payments have not commenced) as of a particular date, unless otherwise specifically noted. We calculate recognized MRR as the recurring revenue recognized during a given period, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. Management uses MRR and recognized MRR as supplemental performance measures because they provide useful measures of increases in contractual revenue from our customer leases. A reconciliation of total revenues to recognized MRR in the period and MRR at period-end is presented below:


	Six Months Ended June 30, (unaudited)									Year Ended December 31, (unaudited)
	Pro Forma 2013			2013			2012			Pro Forma 2012			2012			2011			2010
	($ in thousands)
Recognized MRR
Total period revenues (GAAP basis)	$	84,438		$	84,438		$	71,332		$	157,630		$	145,759		$	130,396		$	120,155
Less: Total period recoveries		(6,322	)		(6,322	)		(4,489	)		(10,613	)		(9,294	)		(12,154	)		(12,506	)
Total period deferred set-up fees		(2,188	)		(2,188	)		(1,862	)		(4,481	)		(4,317	)		(2,997	)		(2,710	)
Total period other		(2,143	)		(2,143	)		(1,793	)		(1,385	)		(3,615	)		(6,303	)		(6,107	)

Recognized MRR (in the period)	$	73,785		$	73,785		$	63,188		$	141,151		$	128,533		$	108,942		$	98,832


MRR
Total period revenues (GAAP basis)	$	84,438		$	84,438		$	71,332		$	157,630		$	145,759		$	130,396		$	120,155
Less: Total revenues excluding last month		(69,802	)		(69,802	)		(59,008	)		(143,157	)		(132,338	)		(119,156	)		(109,497	)

Total revenues for last month of period		14,636			14,636			12,324			14,473			13,421			11,240			10,658
Less: Last month recoveries		(1,224	)		(1,224	)		(775	)		(981	)		(879	)		(897	)		(1,175	)
Last month deferred set-up fees		(391	)		(391	)		(352	)		(455	)		(441	)		(278	)		(195	)
Last month other plus adjustments for period end		(278	)		(278	)		(176	)		(1,180	)		(244	)		(167	)		(150	)

MRR (at period end)*	$	12,743		$	12,743		$	11,021		$	11,857		$	11,857		$	9,898		$	9,138

*	Does not include our booked-not-billed MRR balance, which was $2.3 million and $1.2 million as of June 30, 2013 and 2012, respectively, and $1.1 million, $1.0 million and $1.0 million as of December 31, 2012, 2011, and 2010, respectively.

(3)

We calculate net operating income, or NOI, as net income (loss), excluding: interest expense, interest income, depreciation and amortization, write off of unamortized deferred financing costs, gain on extinguishment of debt, transaction costs, gain on legal settlement, gain on sale of real estate, restructuring charge and general and administrative expenses. We believe that NOI is another metric that is often utilized to evaluate returns on operating real estate from period to period and also, in part, to assess the value of the operating real estate. A reconciliation of net income (loss) to NOI is presented below:


	Six Months Ended June 30, (unaudited)									Year Ended December 31, (unaudited)
	Pro Forma 2013			2013			2012			Pro Forma 2012			2012			2011			2010
	($ in thousands)
Net Operating Income (NOI)
Net income (loss)	$	7,146		$	(3,306	)	$	(6,402	)	$	5,856		$	(9,767	)	$	(909	)	$	14,384
Interest expense		4,459			11,634			12,393			10,105			25,140			19,713			23,502
Interest income		(13	)		(13	)		(46	)		(69	)		(61	)		(71	)		(233	)
Depreciation and amortization		22,061			22,061			16,394			39,438			34,932			26,165			19,086
Write off of unamortized deferred financing costs		—			3,277			1,434			1,434			1,434			—			—
Gain on extinguishment of debt		—			—			—			—			—			—			(22,214	)
Transaction costs		—			—			—			897			897			—			—
Gain on legal settlement		—			—			—			—			—			(3,357	)		—
Gain on sale of real estate		—			—			—			(948	)		(948	)		—			—
Restructuring charge		—			—			3,291			3,291			3,291			—			—
General and administrative expenses		19,290			19,290			17,187			36,610			35,986			28,470			22,844

NOI	$	52,943		$	52,943		$	44,251		$	96,614		$	90,904		$	70,011		$	57,369

Breakdown of NOI by Facility:
Atlanta Metro data center	$	25,000		$	25,000		$	20,048		$	42,787		$	42,787		$	29,712		$	26,595
Suwanee data center		13,428			13,428			16,766			30,471			30,471			32,258			28,508
Santa Clara data center		5,498			5,498			5,550			11,183			11,183			9,672			7,291
Richmond data center		4,679			4,679			2,116			6,094			6,094			267			—
Other data centers		4,338			4,338			(229	)		6,079			369			(1,898	)		(5,025	)

NOI	$	52,943		$	52,943		$	44,251		$	96,614		$	90,904		$	70,011		$	57,369

(4)

We calculate EBITDA as net income (loss) excluding interest expense and interest income, provision for income taxes (including income taxes applicable to sale of assets) and depreciation and amortization. We believe that EBITDA is another metric that is often utilized to evaluate and compare our ongoing operating results and also, in part, to assess the value of our operating portfolio.

In addition to EBITDA, we calculate an adjusted measure of EBITDA, which we refer to as Adjusted EBITDA, as EBITDA excluding write off of unamortized deferred financing costs, gain on extinguishment of debt, transaction costs, equity-based compensation expense, restructuring charge, gain on legal settlement and gain on sale of real estate. We believe that Adjusted EBITDA provides investors with another financial measure that can facilitate comparisons of operating performance between periods and between REITs.

A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA is presented below:


	Six Months Ended June 30, (unaudited)									Year Ended December 31, (unaudited)
	Pro Forma 2013			2013			2012			Pro Forma 2012			2012			2011			2010
	($ in thousands)
EBITDA
Net income (loss)	$	7,146		$	(3,306	)	$	(6,402	)	$	5,856		$	(9,767	)	$	(909	)	$	14,384
Interest expense		4,459			11,634			12,393			10,105			25,140			19,713			23,502
Interest income		(13	)		(13	)		(46	)		(69	)		(61	)		(71	)		(233	)
Depreciation and amortization		22,061			22,061			16,394			39,438			34,932			26,165			19,086

EBITDA		33,653			30,376			22,339			55,330			50,244			44,898			56,739

Adjusted EBITDA
Write off of unamortized deferred financing costs		—			3,277			1,434			1,434			1,434			—			—
Gain on extinguishment of debt		—			—			—			—			—			—			(22,214	)
Transaction costs		—			—			—			897			897			—			—
Equity-based compensation expense		795			795			189			412			412			765			332
Gain on legal settlement		—			—			—			—			—			(3,357	)		—
Gain on sale of real estate		—			—			—			(948	)		(948	)		—			—
Restructuring charge		—			—			3,291			3,291			3,291			—			—

Adjusted EBITDA	$	34,448		$	34,448		$	27,253		$	60,416		$	55,330		$	42,306		$	34,857

RISK FACTORS

An investment in our common stock involves risks. Before making an investment decision, you should carefully consider the following risk factors, which address the material risks concerning our business and an investment in our Class A common stock, together with the other information contained in this prospectus. If any of the risks discussed in this prospectus were to occur, our business, prospects, financial condition, liquidity, funds from operations and results of operations and our ability to service our debt and make distributions to our stockholders could be materially and adversely affected, which we refer to herein collectively as a “material adverse effect on us,” the market price of our common stock could decline significantly and you could lose all or part of your investment. Some statements in this prospectus, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section entitled “Special Note Regarding Forward-Looking Statements.”

Risks Related to Our Business and Operations

Because we are focused on the ownership, operation and redevelopment of data centers, any decrease in the demand for data center space or managed services could have a material adverse effect on us.

Because our portfolio of properties consists entirely of data centers, or properties to be converted to data centers, we are subject to risks inherent in investments in a single industry. Adverse developments in the data center market or in the industries in which our customers operate could lead to a decrease in the demand for data center space or managed services, which could have a greater material adverse effect on us than if we owned a more diversified real estate portfolio. These adverse developments could include: a decline in the technology industry, such as a decrease in the use of mobile or web-based commerce, industry slowdowns, business layoffs or downsizing, relocations of businesses, increased costs of complying with existing or new government regulations and other factors; a slowdown in the growth of the Internet generally as a medium for commerce and communication; a downturn in the market for data center space generally such as oversupply of or reduced demand for space; and the rapid development of new technologies or the adoption of new industry standards that render our or our customers’ current products and services obsolete or unmarketable and, in the case of our customers, that contribute to a downturn in their businesses, increasing the likelihood of a default under their leases or that they become insolvent or file for bankruptcy protection. To the extent that any of these or other adverse conditions occur, they are likely to impact market rents for, and cash flows from, our data center space, which could have a material adverse effect on us.

Our data center infrastructure may become obsolete or unmarketable and we may not be able to upgrade our power, cooling, security or connectivity systems cost-effectively or at all.

The markets for the data centers we own and operate, as well as certain of the industries in which our customers operate, are characterized by rapidly changing technology, evolving industry standards, frequent new service introductions, shifting distribution channels and changing customer demands. As a result, the infrastructure at our data centers may become obsolete or unmarketable due to demand for new processes and/or technologies, including, without limitation: (i) new processes to deliver power to, or eliminate heat from, computer systems; (ii) customer demand for additional redundancy capacity; or (iii) new technology that permits lower levels of critical load and heat removal than our data centers are currently designed to provide. In addition, the systems that connect our data centers to the Internet and other external networks may become outdated, including with respect to latency, reliability and diversity of connectivity. When customers demand new processes or technologies, we may not be able to upgrade our data centers on a cost effective basis, or at all, due to, among other things, increased

expenses to us that cannot be passed on to customers or insufficient revenue to fund the necessary capital expenditures. The obsolescence of our power and cooling systems and/or our inability to upgrade our data centers, including associated connectivity, could reduce revenue at our data centers and could have a material adverse effect on us. Furthermore, potential future regulations that apply to industries we serve may require customers in those industries to seek specific requirements from their data centers that we are unable to provide. These may include physical security regulations applicable to the defense industry and government contractors and privacy and security requirements applicable to the financial services and health care industries. If such regulations were adopted, we could lose customers or be unable to attract new customers in certain industries, which could have a material adverse effect on us.

Leases representing approximately 27% of our leased raised floor and approximately 44% of our annualized rent (including all month-to-month leases), in each case as of June 30, 2013, will expire in either 2013 or 2014. We compete with numerous developers, owners and operators in the data center industry, including managed service providers and other REITs, some of which own or lease properties similar to ours, or may do so in the future, in the same submarkets in which our properties are located. Our competitors may have significant advantages over us, including greater name recognition, longer operating histories, higher operating margins, pre-existing relationships with current or potential customers, greater financial, marketing and other resources, and access to greater and less expensive power. These advantages could allow our competitors to respond more quickly to strategic opportunities or changes in our industry or markets. If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our customers, or if our competitors offer products and services in a greater variety, that are more state-of-the-art or that are more competitively priced than the products and services we offer, we may lose customers or be unable to attract new customers without lowering our rental rates and improving the quality, mix and technology of our products and services. We cannot assure you that we will be able to renew leases with our existing customers or re-let space to new customers if our current customers do not renew their leases. Even if our customers renew their leases or we are able to re-let the space, the terms (including rental rates and lease periods) and costs (including capital) of renewal or re-letting may be less favorable than the terms of our current leases. In addition, there can be no assurances that the type of space and/or services currently available at our properties will be sufficient to retain current customers or attract new customers in the future. Finally, although we offer a full spectrum of data center products from Custom Data Centers to Colocation to Cloud and Managed Services, our competitors that specialize in only one of our product and service offerings may have competitive advantages in that space. If rental rates for our properties decline, we are unable to lease vacant space, our existing customers do not renew their leases or we do not re-let space from expiring leases, in each case, on favorable terms, it could have a material adverse effect on us.

The long sales cycle for data center products could have a material adverse effect on us.

A customer’s decision to lease space in one of our data centers and to purchase Cloud and Managed Services typically involves a significant commitment of resources, time-consuming contract negotiations regarding the service level commitments and substantial due diligence on the part of the customer regarding the adequacy of our infrastructure and attractiveness of our products and services. As a result, the leasing of data center space and Cloud and Managed Services has a long sales cycle. Furthermore, we may expend significant time and resources in pursuing a particular sale or customer that may not result in any revenue. Our inability to adequately manage the risks associated with leasing the space and products within our facilities could have a material adverse effect on us.

Our customers may choose to develop new data centers or expand their own existing data centers, which could result in the loss of one or more key customers or reduce demand and pricing for our data centers and could have a material adverse effect on us.

Some of our customers may develop their own data center facilities. Other customers with their own existing data centers may choose to expand their data centers in the future. In the event that any of our key customers were to develop or expand their data centers, it could result in a loss of business to us or put pressure on our pricing. If we lose a customer, there is no assurance that we would be able to replace that customer at the same or a higher rate, or at all, which could have a material adverse effect on us.

The bankruptcy or insolvency of a major customer could have a material adverse effect on us.

The bankruptcy or insolvency of a major customer could have significant consequences for us. If any customer becomes a debtor in a case under the federal Bankruptcy Code, we cannot evict the customer solely because of the bankruptcy. In addition, the bankruptcy court might authorize the customer to reject and terminate its lease with us. Our claim against the customer for unpaid future rent would be subject to a statutory cap that might be substantially less than the remaining rent owed under the lease. In either case, our claim for unpaid rent would likely not be paid in full. If any of our significant customers were to become bankrupt or insolvent, suffer a downturn in its business, fail to renew its lease at all or renew on terms less favorable to us than its current terms, reject or terminate any leases with us and/or fail to pay unpaid or future rent owed to us, it could have a material adverse effect on us.

Our two largest properties in terms of annualized rent, Atlanta Metro and Suwanee, collectively accounted for approximately 64% of our annualized rent as of June 30, 2013. Therefore, any inability, temporarily or permanently, to fully and consistently operate either of these properties could have a material adverse effect on us. In addition, because both properties are located in the Atlanta metropolitan area, we are particularly susceptible to adverse developments in this area, including as a result of natural disasters (such as hurricanes, floods, tornadoes and other events), that could cause, among other things, permanent damage to the properties and electrical power outages that may last beyond our backup and alternative power arrangements. Further, Atlanta Metro and Suwanee account for several of our largest leases in terms of MRR. Any nonrenewal, credit or other issues with large customers could adversely affect the performance of these properties.

We may be adversely affected by the economies and other conditions of the markets in which we operate, particularly in Atlanta and other metropolitan areas, where we have a high concentration of our data center properties.

We are susceptible to adverse economic or other conditions in the geographic markets in which we operate, such as periods of economic slowdown or recession, the oversupply of, or a reduction in demand for, data centers and cloud and managed services in a particular area, industry slowdowns, layoffs or downsizings, relocation of businesses, increases in real estate and other taxes and changing demographics. The occurrence of these conditions in the specific markets in which we have concentrations of properties could have a material adverse effect on us. Our Atlanta area (Atlanta Metro and Suwanee) and Santa Clara data centers accounted for approximately 64% and 12%, respectively, of our annualized rent as of June 30, 2013. As a result, we are particularly susceptible to adverse market conditions in these areas. In addition, other geographic markets could become more attractive for developers, operators and customers of data center facilities based on favorable costs

and other conditions to construct or operate data center facilities in those markets. For example, some states have created tax incentives for developers and operators to locate data center facilities in their jurisdictions. These changes in other markets may increase demand in those markets and result in a corresponding decrease in demand in our markets. Any adverse economic or real estate developments in the geographic markets in which we have a concentration of properties, or in any of the other markets in which we operate, or any decrease in demand for data center space resulting from the local business climate or business climate in other markets, could have a material adverse effect on us.

The long-term continuance of challenging economic and other market conditions could have a material adverse effect on us.

Economic and other market conditions continue to be challenging in the United States, with tighter credit conditions and modest growth. While recent economic data reflects a stabilization of the economy and credit markets, the cost and availability of credit may continue to be limited. Furthermore, deteriorating economic and other market conditions that affect our customers could negatively impact commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our real estate portfolio. Additionally, the economic climate could have an impact on our lenders or customers, causing them to fail to meet their obligations to us. The long-term continuance of challenging economic and other market conditions could have a material adverse effect on us.

Future consolidation and competition in our customers’ industries could reduce the number of our existing and potential customers and make us dependent on a more limited number of customers.

Mergers or consolidations in our customers’ industries in the future could reduce the number of our existing and potential customers and make us dependent on a more limited number of customers. If our customers merge with or are acquired by other entities that are not our customers, they may discontinue or reduce the use of our data centers in the future. Additionally, some of our customers may compete with one another in various aspects of their businesses, which places additional competitive pressures on our customers. Any of these developments could have a material adverse effect on us.

Our failure to develop and maintain a diverse customer base could have a material adverse effect on us.

Our customers are a mix of C1, C2 and C3 customers. Each type of customer and their leases with us have certain features that distinguish them from our other customers, such as operating margin, space and power requirements and lease term. In addition, our customers engage in a variety of professional, financial, technological and other businesses. A diverse customer base helps to minimize exposure to economic fluctuations in any one industry, business sector or customer type, or any particular customer. Our relative mix of C1, C2 and C3 customers may change over time, as may the industries represented by our customers, the concentration of customers within specified industries and the economic value and risks associated with each customer, and there is no assurance that we will be able to maintain a diverse customer base, which could have a material adverse effect on us.

Our future growth depends upon the successful redevelopment of our existing properties, and any delays or unexpected costs in such redevelopment could have a material adverse effect on us.

We have initiated or are contemplating the redevelopment of seven of our existing data center properties: Atlanta Metro, Dallas, Jersey City, Richmond, Sacramento, Santa Clara and Suwanee. Our future growth depends upon the successful completion of these efforts. With respect to our current and

any future expansions and any new developments or redevelopments, we will be subject to certain risks, including the following:

financing risks;

increases in interest rates or credit spreads;

construction and/or lease-up delays;

changes to plans or specifications;

construction site accidents or other casualties;

lack of availability of, and/or increased costs for, specialized data center components, including long lead-time items such as generators;

cost overruns, including construction or labor costs that exceed our original estimates;

contractor and subcontractor disputes, strikes, labor disputes or supply disruptions;

failure to achieve expected occupancy and/or rental rate levels within the projected time frame, if at all;

sub-optimal mix of 3Cs products;

environmental issues, fire, flooding, earthquakes and other natural disasters; and

delays with respect to obtaining or the inability to obtain necessary zoning, occupancy, environmental, land use and other governmental permits, and changes in zoning and land use laws, particularly with respect to build-outs at our Sacramento and Santa Clara facilities.

In addition, with respect to any future developments of new data center properties, we will be subject to risks and, potentially, unanticipated costs associated with obtaining access to a sufficient amount of power from local utilities, including the need, in some cases, to develop utility substations on our properties in order to accommodate our power needs, constraints on the amount of electricity that a particular locality’s power grid is capable of providing at any given time, and risks associated with the negotiation of long-term power contracts with utility providers. We may not be able to successfully negotiate such contracts on favorable terms, or at all. Any inability to negotiate utility contracts on a timely basis or on favorable terms or in volumes sufficient to supply the critical load anticipated for future developments could have a material adverse effect on us.

While we intend to develop data center properties primarily in markets with which we are familiar, we may in the future acquire properties in new geographic markets where we expect to achieve favorable risk-adjusted returns on our investment. We may not possess the same level of familiarity with development or redevelopment in these new markets and therefore cannot assure you that our development activities will generate attractive returns. Furthermore, development and redevelopment activities, regardless of whether they are ultimately successful, also typically require a substantial portion of our management’s time and attention. This may distract our management from focusing on other operational activities of our business.

These and other risks could result in delays or increased costs and could prevent completion of our development and expansion projects once undertaken, which could have a material adverse effect on us. In addition, we are expanding the aforementioned properties, and may develop or expand properties in the future, prior to obtaining commitments from customers to lease them. This is known as developing or expanding “on speculation” and involves the risk that we will be unable to attract customers to the properties on favorable terms in a timely manner, if at all. In addition to our internal sales force, through our channels and partners team, we intend to use our existing industry relationships with national technology companies to retain and attract customers for our existing data center properties as well as the expansions and developments of such properties. We believe these

industry relationships provide an ongoing pipeline of attractive leasing opportunities, and we intend to capitalize on these relationships in order to increase our leasing network. If our internal sales force or channels and partners team is not successful in leasing new data center space on favorable terms, it could have a material adverse effect on us.

Our properties are designed primarily for lease as data centers, which could make it difficult to reposition them if we are not able to lease or re-let available space.

Our properties are highly specialized properties that contain extensive electrical, communications and mechanical systems. Such systems are often custom-designed to house, power and cool certain types of computer systems and networking equipment. Any office space (such as private office space, open office areas and conference centers) located at our properties is merely complementary to such systems, to facilitate our ability to service and maintain them. As a result, our properties are not well-suited for primary use by customers as anything other than data centers. Major renovations and expenditures would be required to convert the properties for use as commercial office space, or for any other use, which would substantially reduce the benefits from such a conversion. In the event of a conversion, the value of our properties may be impaired due to the costs of reconfiguring the real estate for alternate purposes and the removal or modification of the specialized systems and equipment. The highly specialized nature of our data center properties could make it difficult and costly to reposition them if we are not able to lease or re-let available space on favorable terms, or at all, which could have a material adverse effect on us.

We lease the space in which two of our data centers are located and the non-renewal of such leases could have a material adverse effect on us.

We lease the space housing our data center facilities located in Jersey City, New Jersey and Overland Park, Kansas, where our corporate headquarters is located. These leases expire (taking into account our extension options) in 2031 and 2023, respectively. We would incur significant costs if we were forced to vacate either of our leased facilities due to the high costs of relocating the equipment in our facilities and installing the necessary infrastructure in a new data center property. If we were forced to vacate either of our leased facilities, we could lose customers that chose our services based on our location. Our landlords could attempt to evict us for reasons beyond our control. Further, we may be unable to maintain good working relationships with our landlords, which would adversely affect our relationship with our customers and could result in the loss of current customers. In addition, we cannot assure you that we will be able to renew these leases prior to their expiration dates on favorable terms or at all. If we are unable to renew our lease agreements, we could lose a significant number of customers who are unwilling to relocate their equipment to another one of our data center properties, which could have a material adverse effect on us. Even if we are able to renew these leases, the terms and other costs of renewal may be less favorable than our existing lease arrangements. Failure to sufficiently increase revenue from customers at these facilities to offset these projected higher costs could have a material adverse effect on us.

The ground sublease structure at the Santa Clara property could prevent us from developing the property as we desire, and we may have to incur additional expenses prior the end of the ground sublease to restore the property to its prelease state.

Our interest in the Santa Clara property is subject to a ground sublease granted by a third party, as ground sublessor, to our indirect subsidiary Quality Investment Properties Santa Clara, LLC, or QIP Santa Clara. The ground sublease terminates in 2052 and we have two options to extend the original term for consecutive ten-year terms. The ground sublease structure presents special risks. We, as ground sublessee, will own all improvements on the land, including the buildings in which the data centers are located during the term of the ground sublease. Upon the expiration or earlier termination

of the ground sublease, however, the improvements on the land will become the property of the ground sublessor. Unless we purchase a fee interest in the land and improvements subject to the ground sublease, we will not have any economic interest in the land or improvements at the expiration of the ground sublease. Therefore, we will not share in any increase in value of the land or improvements beyond the term of the ground sublease, notwithstanding our capital outlay to purchase our interest in the data center or fund improvements thereon, and will lose our right to use the building on the subleased property. In addition, upon the expiration of the ground sublease, the ground sublessor may require the removal of the improvements or the restoration of the improvements to their condition prior to any permitted alterations at our sole cost and expense. If we do not meet a certain net worth test, we also will be required to provide the ground sublessor with a bond in connection with such removal and restoration requirements. In addition, while we generally have the right to undertake alterations to the demised premises, the ground sublessor has the right to reasonably approve the quality of such work and the form and content of certain financial information of QIP Santa Clara. The ground sublessor need not give its approval to alterations if it or its affiliate determines that the work will have a material adverse impact on the fee interest in property adjacent to the demised premises. In addition, though the ground sublease provides that we may exercise the rights of ground lessor in the event of a rejection of the master ground lease, each of the master ground lease and the ground sublease may be rejected in bankruptcy. Finally, in the event of a condemnation, the ground lessor is entitled to an allocable share of any condemnation proceeds. The ground sublease, however, does contain important nondisturbance protections and provides that, in event of the termination of the master ground lease, the ground sublease will become a direct lease between the ground lessor and QIP Santa Clara.

Our products and infrastructure rely on third-party service providers. In particular, we depend on third parties to provide Internet, telecommunication and fiber optic network connectivity to the customers in our data centers, and we have no control over the reliability of the services provided by these suppliers. Our customers may in the future experience difficulties due to service failures unrelated to our systems and services. Any Internet, telecommunication or fiber optic network failures may result in significant loss of connectivity to our data centers, which could reduce the confidence of our customers and could consequently impair our ability to retain existing customers or attract new customers and could have a material adverse effect on us.

Similarly, we depend upon the presence of Internet, telecommunications and fiber optic networks serving the locations of our data centers in order to attract and retain customers. The construction required to connect multiple carrier facilities to our data centers is complex, requiring a sophisticated redundant fiber network, and involves matters outside of our control, including regulatory requirements and the availability of construction resources. Each new data center that we develop requires significant amounts of capital for the construction and operation of a sophisticated redundant fiber network. We believe that the availability of carrier capacity affects our business and future growth. We cannot assure you that any carrier will elect to offer its services within our data centers or that once a carrier has decided to provide connectivity to our data centers that it will continue to do so for any period of time. Furthermore, some carriers are experiencing business difficulties or have announced consolidations or mergers. As a result, some carriers may be forced to downsize or terminate connectivity within our data centers, which could adversely affect our customers and could have a material adverse effect on us.

Power outages, limited availability of electrical resources and increased energy costs could have a material adverse effect on us.

Our data centers are subject to electrical power outages, regional competition for available power and increased energy costs. We attempt to limit exposure to system downtime by using backup generators and power supplies generally at a significantly higher operating cost than we would pay for an equivalent amount of power from a local utility. However, we may not be able to limit our exposure entirely even with these protections in place. Power outages, which may last beyond our backup and alternative power arrangements, would harm our customers and our business. During power outages, changes in humidity and temperature can cause permanent damage to servers and other electrical equipment. We could incur financial obligations or be subject to lawsuits by our customers in connection with a loss of power. Any loss of services or equipment damage could reduce the confidence of our customers in our services and could consequently impair our ability to attract and retain customers, which could have a material adverse effect on us.

In addition, power and cooling requirements at our data centers are increasing as a result of the increasing power and cooling demands of modern servers. Since we rely on third parties to provide our data centers with sufficient power to meet our customers’ needs, and we generally do not control the amount of power drawn by our customers, our data centers could have a limited or inadequate amount of electrical resources.

We also may be subject to risks and unanticipated costs associated with obtaining power from various utility companies. Utilities that serve our data centers may be dependent on, and sensitive to price increases for, a particular type of fuel, such as coal, oil or natural gas. The price of these fuels and the electricity generated from them could increase as a result of proposed legislative measures related to climate change or efforts to regulate carbon emissions. While our wholesale customers are billed based on a pass-through basis for their direct energy usage, our retail customers pay a fixed cost for services, including power, so any excess energy costs above such fixed costs are borne by us. Although, for technical and practical reasons, our retail customers often use less power than the amount we are required to provide pursuant to their leases, there is no assurance that this will always be the case. Although we have a diverse customer base, the concentration and mix of our customers may change and increases in the cost of power at any of our data centers would put those locations at a competitive disadvantage relative to data centers served by utilities that can provide less expensive power. This could adversely affect our relationships with our customers and hinder our ability to operate our data centers, which could have a material adverse effect on us.

We rely on the proper and efficient functioning of computer and data-processing systems, and a large-scale malfunction could have a material adverse effect on us.

Our ability to keep our data centers operating depends on the proper and efficient functioning of computer and data-processing systems. Since computer and data-processing systems are susceptible to malfunctions and interruptions, including those due to equipment damage, power outages, computer viruses and a range of other hardware, software and network problems, we cannot guarantee that our data centers will not experience such malfunctions or interruptions in the future. Additionally, expansions and developments in the products and services that we offer, including our Cloud and Managed Services, could increasingly add a measure of complexity that may overburden our data center and network resources and human capital, making service interruptions and failures more likely. A significant or large-scale malfunction or interruption of one or more of any of our data centers’ computer or data-processing systems could adversely affect our ability to keep such data centers running efficiently. If a malfunction results in a wider or sustained disruption to business at a property, it could have a material adverse effect on us.

Interruptions in our provision of products or services, or security breaches at our facility or affecting our networks, could result in a loss of customers and damage our reputation, which could have a material adverse effect on us.

Our business and reputation could be adversely affected by any interruption or failure in the provision of products, services or security (whether network or physical) at our data centers, even if such events occur as a result of a natural disaster, human error, landlord maintenance failure, water damage, fiber cuts, extreme temperature or humidity, sabotage, vandalism, terrorist acts, unauthorized entry or other unanticipated problems. In addition, our network could be subject to unauthorized access, computer viruses, and other disruptive problems caused by customers, employees, or others. Unauthorized access, computer viruses, or other disruptive problems could lead to interruptions, delays and cessation of service to our customers. If a significant disruption occurs, we may be unable to implement disaster recovery or security measures in a timely manner or, if and when implemented, these measures may not be sufficient or could be circumvented through the reoccurrence of a natural disaster or other unanticipated problem, or as a result of accidental or intentional actions. Furthermore, such disruptions can cause damage to servers and may result in legal liability where interruptions in service violate service commitments in customer leases. Resolving network failures or alleviating security problems also may require interruptions, delays, or cessation of service to our customers. Accordingly, failures in our products and services, including problems at our data centers, network interruptions or breaches of security on our network may result in significant liability, a loss of customers and damage to our reputation, which could have a material adverse effect on us.

If we are unable to protect our or our customers’ information from theft or loss, our reputation could be harmed, which could have a material adverse effect on us.

We are vulnerable to negative impacts if sensitive information from our customers or their customers is inadvertently compromised or lost. We routinely process, store and transmit large amounts of data for our customers, which includes sensitive and personally identifiable information. Loss or compromise of this data could cost us both monetarily and in terms of customer goodwill and lost business. Unauthorized access also potentially could jeopardize the security of confidential information of our customers or our customers’ end-users, which might expose us to liability from customers and the government agencies that regulate us or our customers, as well as deter potential customers from renting our space and purchasing our services. For example, violations of the Health Insurance Portability and Accountability Act, or HIPAA, and Health Information Technology for Economic and Clinical Health Act can lead to fines of up to $1.5 million for all violations of a particular provision in a calendar year. In addition, we cannot predict how future laws, regulations and standards, or future interpretations of current laws, regulations and standards, related to privacy and security will affect our business and we cannot predict the cost of compliance. We may be required to expend significant financial resources to protect against physical or cybersecurity breaches that could result in the misappropriation of our or our customers’ information. As techniques used to breach security change frequently, and are generally not recognized until launched against a target, we may not be able to implement security measures in a timely manner or, if and when implemented, we may not be able to determine the extent to which these measures could be circumvented. Any internal or external breach in our network could severely harm our business and result in costly litigation and potential liability for us. To the extent our customers demand that we accept unlimited liability and to the extent there is a competitive trend to accept it, such a trend could affect our ability to retain these limitations in our leases at the risk of losing the business. Such a trend may be particularly likely to occur with regard to our Cloud and Managed Services. We may experience a data loss or security breach, which could have a material adverse effect on us.

The loss of key personnel, particularly Chad L. Williams, our Chairman and Chief Executive Officer, and William H. Schafer, our Chief Financial Officer, could have a material adverse effect on us.

Our continued success depends, to a significant extent, on the continued services of key personnel, particularly Chad L. Williams, our Chairman and Chief Executive Officer, and William H. Schafer, our Chief Financial Officer, who have extensive market knowledge and long-standing business relationships. In particular, our reputation among and our relationships with our key customers are the direct result of a significant investment of time and effort by these individuals to build our credibility in a highly specialized industry. The loss of services of one or more key members of our executive management team, particularly our Chairman and Chief Executive Officer or our Chief Financial Officer, could diminish our business and investment opportunities and our relationships with lenders, business partners and existing and prospective customers and could have a material adverse effect on us.

Any inability to recruit or retain qualified personnel, or maintain access to key third-party service providers, could have a material adverse effect on us.

We must continue to identify, hire, train, and retain IT professionals, technical engineers, operations employees, and sales and senior management personnel who maintain relationships with our customers and who can provide the technical, strategic and marketing skills required to grow our company, develop and expand our data centers, maximize our rental and services income and achieve the highest sustainable rent levels at each of our facilities. There is a shortage of qualified personnel in these fields, and we compete with other companies for the limited pool of these personnel. Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. An increase in these costs or our inability to recruit and retain necessary technical, managerial, sales and marketing personnel or to maintain access to key third-party providers could have a material adverse effect on us.

Our decentralized management structure may lead to incidents or developments that could damage our reputation and could have a material adverse effect on us.

We have a decentralized management structure that enables the local managers at each of our data centers to quickly and effectively respond to trends in their respective markets. While we believe that we exercise an appropriate level of central control and supervision over all of our operations, the local managers retain a certain amount of operational and decision-making flexibility, including the management of the particular data center, sourcing, pricing and other sales decisions. We cannot guarantee that our local managers will not take actions or experience problems that could damage our reputation or have a material adverse effect on us.

We may be unable to identify and complete acquisitions on favorable terms or at all, which may inhibit our growth and have a material adverse effect on us.

We continually evaluate the market of available properties and may acquire additional properties when opportunities exist. Our ability to acquire properties on favorable terms is subject to the following significant risks:

we may be unable to acquire a desired property because of competition from other real estate investors with significant resources and/or access to capital, including both publicly traded REITs and institutional investment funds;

even if we are able to acquire a desired property, competition from other potential acquirors may significantly increase the purchase price or result in other less favorable terms;

even if we enter into agreements for the acquisition of a desired property, these agreements are subject to customary conditions to closing, including completion of due diligence investigations to our satisfaction, and we may incur significant expenses for properties we never actually acquire;

we may be unable to finance acquisitions on favorable terms or at all; and

we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities such as liabilities for clean-up of environmental contamination, claims by customers, vendors or other persons dealing with the former owners of the properties and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties.

Any inability to complete property acquisitions on favorable terms or at all could have a material adverse effect on us.

We may be unable to successfully integrate and operate acquired properties, which could have a material adverse effect on us.

Even if we are able to make acquisitions on favorable terms, our ability to successfully integrate and operate them is subject to the following significant risks:

we may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties, as well as require substantial management time and attention;

we may be unable to integrate new acquisitions quickly and efficiently, particularly acquisitions of operating businesses or portfolios of properties, into our existing operations;

acquired properties may be subject to reassessment, which may result in higher than expected property tax payments;

our customer retention and lease renewal risks may be increased; and

market conditions may result in higher than expected vacancy rates and lower than expected rental rates.

Any inability to integrate and operate acquired properties to meet our financial, operational and strategic expectations could have a material adverse effect on us.

We recently acquired our Sacramento facility and expect a transition period during which our retention and lease renewal risks may be increased. Management also may be required to spend a greater portion of its time at the Sacramento facility (rather than the other facilities) in order to manage its successful integration into our platform. We will continue to operate the Sacramento facility in the same manner (and with the same degree of care and skill) as our other properties, but if customers are unsatisfied, they may fail to renew their leases or breach their existing leases. In the event that customers fail to renew their leases, the revenue at the Sacramento facility may decrease, which could have a material adverse effect on us.

We may be subject to unknown or contingent liabilities related to properties or businesses that we acquire, which may result in damages and investment losses.

Assets and entities that we have acquired or may acquire in the future may be subject to unknown or contingent liabilities for which we may have limited or no recourse against the sellers. Unknown or contingent liabilities might include liabilities for clean-up or remediation of environmental conditions, claims of customers, vendors or other persons dealing with the acquired entities, tax liabilities and other liabilities whether incurred in the ordinary course of business or otherwise. In the

future we may enter into transactions with limited representations and warranties or with representations and warranties that do not survive the closing of the transactions, in which event we would have no or limited recourse against the sellers of such properties. While we usually require the sellers to indemnify us with respect to breaches of representations and warranties that survive, such indemnification is often limited and subject to various materiality thresholds, a significant deductible or an aggregate cap on losses. As a result, there is no guarantee that we will recover any amounts with respect to losses due to breaches by the sellers of their representations and warranties. In addition, the total amount of costs and expenses that we may incur with respect to liabilities associated with acquired properties and entities may exceed our expectations. Finally, indemnification agreements between us and the sellers typically provide that the sellers will retain certain specified liabilities relating to the assets and entities acquired by us. While the sellers are generally contractually obligated to pay all losses and other expenses relating to such retained liabilities, there can be no guarantee that such arrangements will not require us to incur losses or other expenses as well. Any of these matters could have a material adverse effect on us.

Risks Related to Financing

An inability to access external sources of capital on favorable terms or at all could limit our ability to execute our business and growth strategies.

In order to qualify and maintain our qualification as a REIT, we are required under the Code to distribute at least 90% of our “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains) annually. In addition, we will be subject to income tax at regular corporate rates to the extent that we distribute less than 100% of our “REIT taxable income,” including any net capital gains. Because of these distribution requirements, we may not be able to fund future capital needs, including capital for development projects and acquisition opportunities, from operating cash flow. Consequently, we intend to rely on third-party sources of capital to fund a substantial amount of our future capital needs. We may not be able to obtain such financing on favorable terms or at all. Any additional debt we incur will increase our leverage, expose us to the risk of default and impose operating restrictions on us. In addition, any equity financing could be materially dilutive to the equity interests held by our stockholders. Our access to third-party sources of capital depends, in part, on general market conditions, the market’s perception of our growth potential, our leverage, our current and expected results of operations, liquidity, financial condition and cash distributions to stockholders and the market price of our common stock. If we cannot obtain capital when needed, we may not be able to execute our business and growth strategies (including redeveloping or acquiring properties when strategic opportunities exist), satisfy our debt service obligations, make the cash distributions to our stockholders necessary to qualify and maintain our qualification as a REIT (which would expose us to significant penalties and corporate level taxation), or fund our other business needs, which could have a material adverse effect on us.

Upon completion of this offering, our pro forma indebtedness outstanding as of June 30, 2013 will be approximately $315 million. Approximately $145 million of this indebtedness bears interest at a variable rate, including the impact of hedging arrangements. Increases in interest rates, or the loss of the benefits of our existing or future hedging agreements, would increase our interest expense, which would adversely affect our cash flow and our ability to service our debt. Our organizational documents contain no limitations regarding the maximum level of indebtedness, as a percentage of our market capitalization or otherwise, that we may incur. We may incur significant additional indebtedness,

including mortgage indebtedness, in the future. Our substantial outstanding pro forma indebtedness, and the limitations imposed on us by our debt agreements, could have other significant adverse consequences, including the following:

our cash flow may be insufficient to meet our required principal and interest payments;

we may use a substantial portion of our cash flows to make principal and interest payments and we may be unable to obtain additional financing as needed or on favorable terms, which could, among other things, have a material adverse effect on our ability to complete our redevelopment pipeline, capitalize upon emerging acquisition opportunities, make cash distributions to our stockholders, or meet our other business needs;

we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness;

we may be forced to dispose of one or more of our properties, possibly on unfavorable terms or in violation of certain covenants to which we may be subject;

we may be required to maintain certain debt and coverage and other financial ratios at specified levels, thereby reducing our financial flexibility;

our vulnerability to general adverse economic and industry conditions may be increased;

greater exposure to increases in interest rates for our variable rate debt and to higher interest expense on future fixed rate debt;

we may be at a competitive disadvantage relative to our competitors that have less indebtedness; and

we may default on our indebtedness by failure to make required payments or violation of covenants, which would entitle holders of such indebtedness and possibly other indebtedness to accelerate the maturity of their indebtedness and, if such indebtedness is secured, to foreclose on our properties that secure their loans and receive an assignment of our rents and leases.

The occurrence of any one of these events could have a material adverse effect on us. In addition, any foreclosure on our properties could create taxable income without accompanying cash proceeds, which could adversely affect our ability to meet the REIT distribution requirements imposed by the Code.

Our existing indebtedness contains, and any future indebtedness may contain, covenants that restrict our ability to engage in certain activities, which could have a material adverse effect on us.

Our existing indebtedness contains, and our future indebtedness may contain, certain covenants which, among other things, restrict our ability to sell, without the consent of the applicable lender, one or more properties. In addition, such covenants also may restrict our ability to engage in mergers or consolidations that result in a change in control of us, without the consent of the applicable lender. These covenants may restrict our ability to engage in certain transactions that may be in our best interest. In addition, failure to meet the covenants may result in an event of default under the applicable indebtedness, which could result in the acceleration of the applicable indebtedness and potentially other indebtedness and foreclosure upon any property securing such indebtedness, which could have a material adverse effect on us.

required to allow us to qualify and maintain our status as a REIT, so long as such default does not arise from a payment default or event of insolvency) and lenders under the facility and, potentially, other indebtedness, could accelerate the maturity of the related indebtedness. In addition, these facilities also contain covenants providing for a maximum distribution of the greater of (i) 95% of our Funds from Operations (as defined in such agreement) and (ii) the amount required for us to qualify as a REIT.

Mortgage and other secured indebtedness expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties or other assets subject to indebtedness.

Incurring mortgage and other secured indebtedness increases our risk of property losses because defaults on indebtedness secured by properties or other assets may result in foreclosure actions initiated by lenders and ultimately our loss of the property or other assets securing any loans for which we are in default. Any foreclosure on a mortgaged property or group of properties could have a material adverse effect on the overall value of our portfolio of data centers. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the indebtedness secured by the mortgage. If the outstanding balance of the indebtedness secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds.

Our hedging transactions involve costs and expose us to potential losses.

Hedging agreements enable us to convert floating rate liabilities to fixed rate liabilities or fixed rate liabilities to floating rate liabilities. Upon completion of this offering, we expect to be a party to two interest rate swap agreements, which effectively fix the applicable LIBOR interest rate on $150 million of our outstanding indebtedness at 0.5825% through September 2014. Hedging transactions expose us to certain risks, including that losses on a hedge position may reduce the cash available for distribution to stockholders and such losses may exceed the amount invested in such instruments and that counterparties to such agreements could default on their obligations, which could increase our exposure to fluctuating interest rates. In addition, hedging agreements may involve costs, such as transaction fees or breakage costs, if we terminate them. The REIT rules impose certain restrictions on our ability to utilize hedges, swaps and other types of derivatives to hedge our liabilities. We expect that our board of directors will adopt a general policy with respect to our use of interest rate swaps, the purchase or sale of interest rate collars, caps or floors, options, mortgage derivatives and other hedging instruments in order to hedge all or a portion of our interest rate risk, given the cost of such hedges and the need to qualify and maintain our qualification as a REIT. We expect our policy to state that we will not use derivatives for speculative or trading purposes and will only enter into contracts with major financial institutions based on their credit rating and other factors. We may use hedging instruments in our risk management strategy to limit the effects of changes in interest rates on our operations. However, neither our current nor any future hedges may be effective in eliminating all of the risks inherent in any particular position due to the fact that, among other things, the duration of the hedge may not match the duration of the related liability, the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction and the hedging counterparty owing money in the hedging transaction may default on its obligation to pay. The use of derivatives could have a material adverse effect on us.

Risks Related to the Real Estate Industry

The operating performance and value of our properties are subject to risks associated with the real estate industry, and we cannot assure you that we will execute our business and growth strategies successfully.

As a real estate company, we are subject to all of the risks associated with owning and operating real estate, including:

adverse changes in international, national or local economic and demographic conditions;

vacancies or our inability to rent space on favorable terms, including possible market pressures to offer customers rent abatements, customer improvements, early termination rights or below-market renewal options;

adverse changes in the financial condition or liquidity of buyers, sellers and customers (including their ability to pay rent to us) of properties, including data centers;

the attractiveness of our properties to customers;

competition from other real estate investors with significant resources and assets to capital, including other real estate operating companies, publicly traded REITs and institutional investment funds;

reductions in the level of demand for data center space;

increases in the supply of data center space;

fluctuations in interest rates, which could have a material adverse effect on our ability, or the ability of buyers and customers of properties, including data centers, to obtain financing on favorable terms or at all;

increases in expenses that are not paid for by or cannot be passed on to our customers, such as the cost of complying with laws, regulations and governmental policies;

the relative illiquidity of real estate investments, especially the specialized real estate properties that we hold and seek to acquire and develop;

changes in, and changes in enforcement of, laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning and tax laws, and governmental fiscal policies;

property restrictions and/or operational requirements pursuant to restrictive covenants, reciprocal easement agreements, operating agreements or historical landmark designations; and

civil unrest, acts of war, terrorist attacks and natural disasters, including earthquakes, tornados, hurricanes and floods, which may result in uninsured and underinsured losses.

In addition, periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in occupancy and rental sales, and therefore revenues, or an increased incidence of defaults under existing leases. Accordingly, we cannot assure you that we will be able to execute our business and growth strategies. Any inability to operate our properties to meet our financial, operational and strategic expectations could have a material adverse affect on us.

The illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in economic, financial, investment and other conditions.

Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties in our portfolio in response to changing economic, financial, investment or other conditions

is limited. The real estate market is affected by many factors that are beyond our control, including those described above. In particular, data centers represent a particularly illiquid part of the overall real estate market. This illiquidity is driven by a number of factors, including the relatively small number of potential purchasers of such data centers—including other data center operators and large corporate users—and the relatively high cost per square foot to develop data centers, which substantially limits a potential buyer’s ability to purchase a data center property with the intention of redeveloping it for an alternative use, such as an office building, or may substantially reduce the price buyers are willing to pay. Our inability to dispose of properties at opportune times or on favorable terms could have a material adverse effect on us.

In addition, the federal tax code imposes restrictions on a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies. In particular, the tax laws applicable to REITs require that we hold our properties for investment, rather than primarily for sale in the ordinary course of business, which may cause us to forego or defer sales of properties that otherwise would be in our best interest. Therefore, we may not be able to vary our portfolio in response to economic, financial, investment or other conditions promptly or on favorable terms, which could have a material adverse effect on us.

Declining real estate valuations could result in impairment charges, the determination of which involves a significant amount of judgment on our part. Any impairment charge could have a material adverse effect on us.

We review our properties for impairment on a quarterly and annual basis and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Indicators of impairment include, but are not limited to, a sustained significant decrease in the market price of or the cash flows expected to be derived from a property. A significant amount of judgment is involved in determining the presence of an indicator of impairment. If the total of the expected undiscounted future cash flows is less than the carrying amount of a property on our balance sheet, a loss is recognized for the difference between the fair value and carrying value of the property. The evaluation of anticipated cash flows requires a significant amount of judgment regarding assumptions that could differ materially from actual results in future periods, including assumptions regarding future occupancy, rental rates and capital requirements. Any impairment charge could have a material adverse effect on us.

Each of our properties is subject to real and personal property taxes, which could significantly increase our property taxes as a result of tax rate changes and reassessments and have a material adverse effect on us.

Each of our properties is subject to real and personal property taxes. These taxes may increase as tax rates change and as the properties are assessed or reassessed by taxing authorities. It is likely that the properties will be reassessed by taxing authorities as a result of (i) the acquisition of the properties by us and (ii) the informational returns that we must file in connection with the formation transactions. Any increase in property taxes on the properties could have a material adverse effect on us.

If California changes its property tax scheme, our California properties could be subject to significantly higher tax levies.

Owners of California property are subject to particularly high property taxes. Voters in the State of California previously passed Proposition 13, which generally limits annual real estate tax increases to 2% of assessed value per annum. From time to time, various groups have proposed repealing Proposition 13, or providing for modifications such as a “split roll tax,” whereby commercial property, for example, would be taxed at a higher rate than residential property. Given the uncertainty, it is not possible to quantify the risk to us of a tax increase or the resulting impact on us of any increase, but any tax increase could be significant at our California properties.

Uninsured and underinsured losses could have a material adverse effect on us.

We carry comprehensive liability, fire, extended coverage, earthquake, business interruption and rental loss insurance with respect to our properties, and we plan to obtain similar coverage for properties we acquire in the future. However, certain types of losses, generally of a catastrophic nature, such as earthquakes and floods, may be either uninsurable or not economically insurable. Should a property sustain damage, we may incur losses due to insurance deductibles, to co-payments on insured losses or to uninsured losses. In the event of a substantial property loss, the insurance coverage may not be sufficient to pay the full current market value or current replacement cost of the property. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it infeasible to use insurance proceeds to replace a property after it has been damaged or destroyed. Under such circumstances, the insurance proceeds we receive might not be adequate to restore our economic position with respect to such property. Lenders may require such insurance and our failure to obtain such insurance may constitute default under loan agreements, which could have a material adverse effect on us. Finally, a disruption in the financial markets may make it more difficult to evaluate the stability, net assets and capitalization of insurance companies and any insurer’s ability to meet its claim payment obligations. A failure of an insurance company to make payments to us upon an event of loss covered by an insurance policy could have a material adverse effect on us. In the event of an uninsured or partially insured loss, we could lose some or all of our capital investment, cash flow and revenues related to one or more properties, which could also have a material adverse effect on us.

As the current or former owner or operator of real property, we could become subject to liability for environmental contamination, regardless of whether we caused such contamination, which could have a material adverse effect on us.

Under various federal, state and local statutes, regulations and ordinances relating to the protection of the environment, a current or former owner or operator of real property may be liable for the cost to remove or remediate contamination resulting from the presence or discharge of hazardous substances, wastes or petroleum products on, under, from or in such property. These costs could be substantial, liability under these laws may attach without regard to whether the owner or operator knew of, or was responsible for, the presence of the contaminants, and the liability may be joint and several. Some of our properties contain large underground or aboveground fuel storage tanks used to fuel generators for emergency power, which is critical to our operations. If any of the tanks that we own or operate releases fuel to the environment, we would likely have to pay to clean up the contamination. In addition, prior owners and operators have used our current properties for industrial and commercial purposes, which could have resulted in environmental contamination, including our Dallas and Richmond data center properties, which were previously used as semiconductor plants. Moreover, the presence of contamination or the failure to remediate contamination at our properties may (1) expose us to third-party liability, (2) subject our properties to liens in favor of the government for damages and costs the government incurs in connection with the contamination, (3) impose restrictions on the manner in which a property may be used or businesses may be operated, or (4) materially adversely affect our ability to sell, lease or develop the real estate or to borrow using the real estate as collateral. In addition, there may be material environmental liabilities at our properties of which we are not aware. We also may be liable for the costs of remediating contamination at off-site facilities at which we have arranged, or will arrange, for disposal or treatment of our hazardous substances without regard to whether we complied or will comply with environmental laws in doing so. Any of these matters could have a material adverse effect on us.

We could become subject to liability for failure to comply with environmental, health and safety requirements or zoning laws, which could cause us to incur additional expenses.

Our properties are subject to federal, state and local environmental, health and safety laws and zoning requirements, including those regarding the handling of regulated substances and wastes, emissions to the environment and fire codes. For instance, our properties are subject to regulations regarding the storage of petroleum for auxiliary or emergency power and air emissions arising from the use of generators. In particular, generators at our data center facilities are subject to strict emissions limitations, which could preclude us from using critical back-up systems and lead to significant business disruptions at such facilities and loss of our reputation. If we exceed these emissions limits, we may be exposed to fines and/or other penalties. In addition, we lease some of our properties to our customers who also are subject to such environmental, health and safety laws and zoning requirements. If we, or our customers, fail to comply with these various laws and requirements, we might incur costs and liabilities, including governmental fines and penalties. Moreover, we do not know whether existing laws and requirements will change or, if they do, whether future laws and requirements will require us to make significant unanticipated expenditures that could have a material adverse effect on us. Environmental noncompliance liability also could affect a customer’s ability to make rental payments to us.

We could become subject to liability for asbestos-containing building materials in the buildings on our property, which could cause us to incur additional expenses.

Some of our properties may contain, or may have contained, asbestos-containing building materials. Environmental, health and safety laws require that owners or operators of or employers in buildings with asbestos-containing materials, or ACM, properly manage and maintain these materials, adequately inform or train those who may come into contact with ACM and undertake special precautions, including removal or other abatement, in the event that ACM is disturbed during building maintenance, renovation or demolition. These laws may impose fines and penalties on employers, building owners or operators for failure to comply with these laws. In addition, third parties may seek recovery from employers, owners or operators for personal injury associated with exposure to asbestos. If we become subject to any of these penalties or other liabilities as a result of ACM at one or more of our properties, it could have a material adverse effect on us.

Our properties may contain or develop harmful mold or suffer from other adverse conditions, which could lead to liability for adverse health effects and costs of remediation.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Indoor air quality issues also can stem from inadequate ventilation, chemical contamination from indoor or outdoor sources and other biological contaminants such as pollen, viruses and bacteria. Indoor exposure to airborne toxins or irritants above certain levels can cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property or increase indoor ventilation. In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our customers, employees of our customers and others if property damage or personal injury occurs. Thus, conditions related to mold or other airborne contaminants could have a material adverse effect on us.

Laws, regulations or other issues related to climate change could have a material adverse effect on us.

material adverse effect on us. Congress is currently considering new laws, regulations and interpretations relating to climate change, including potential cap-and-trade systems, carbon taxes and other requirements relating to reduction of carbon footprints and/or greenhouse gas emissions. The federal government and some of the states and localities in which we operate have enacted certain climate change laws and regulations and/or have begun regulating carbon footprints and greenhouse gas emissions. Although these laws and regulations have not had any known material adverse effect on us to date, they could limit our ability to develop new facilities or result in substantial compliance costs, retrofit costs and construction costs, including monitoring and reporting costs and capital expenditures for environmental control facilities and other new equipment. Furthermore, our reputation could be damaged if we violate climate change laws or regulations. We cannot predict the impact of future laws and regulations, or future interpretations of current laws and regulations, related to climate change. Lastly, the potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. Any of these matters could have a material adverse effect on us.

We are exposed to ongoing litigation and other legal and regulatory actions, which may divert management’s time and attention, require us to pay damages and expenses or restrict the operation of our business.

We are subject to the risk of legal claims and proceedings and regulatory enforcement actions in the ordinary course of our business and otherwise, and we could incur significant liabilities and substantial legal fees as a result of these actions. Our management may devote significant time and attention to the resolution (through litigation, settlement or otherwise) of these actions, which would detract from our management’s ability to focus on our business. Any such resolution could involve payment of damages or expenses by us, which may be significant. In addition, any such resolution could involve our agreement to terms that restrict the operation of our business. The results of legal proceedings cannot be predicted with certainty. We cannot guarantee losses incurred in connection with any current or future legal or regulatory proceedings or actions will not exceed any provisions we may have set aside in respect of such proceedings or actions or will not exceed any available insurance coverage. The occurrence of any of these events could have a material adverse effect on us.

We may incur significant costs complying with various federal, state and local regulations, which could have a material adverse effect on us.

The properties in our portfolio are subject to various federal, state and local regulations, including the Americans with Disabilities Act, or ADA, as well as state and local fire and life safety requirements. Under the ADA, all places of public accommodation must meet federal requirements related to access and use by disabled persons. A number of additional federal, state and local regulations may also require modifications to our properties, or restrict our ability to renovate our properties. If we fail to comply with these various requirements, we might incur governmental fines or private damage awards. We cannot predict the ultimate amount of the cost of compliance with the ADA or other legislation. In addition, we do not know whether existing requirements will change, or if they do, whether future requirements will require us to make significant unanticipated expenditures that could have a material adverse effect on us.

Risks Related to Our Organizational Structure

We have no operating history as a public company, and our inexperience may impede our ability to successfully manage our business.

We have no operating history as a public company. As a result, we cannot assure you that our past experience will be sufficient to successfully operate our company as a public company. Although certain of our executive officers and directors have experience in the real estate industry, and Mr. Schafer, our Chief Financial Officer, was previously the Chief Financial Officer of a publicly traded REIT, we cannot assure you that our past experience will be sufficient to operate a business in accordance with the Code requirements for REIT qualification or in accordance with the requirements of the SEC and the NYSE for public companies. Upon completion of this offering, even though we will be an “emerging growth company” as defined in the JOBS Act, and therefore may take advantage of various exemptions to public reporting requirements, we will be required to develop and implement substantial control systems and procedures in order to qualify and maintain our qualification as a REIT, satisfy our periodic and current reporting requirements under applicable SEC regulations and comply with NYSE listing standards. As a result, we will incur significant legal, accounting and other expenses that we did not incur as a private company, and our management and other personnel will need to devote a substantial amount of time to comply with these rules and regulations and establish the corporate infrastructure and controls demanded of a publicly traded REIT. These expenses and time commitments could be substantially more than we currently expect. In addition, we may initially incur higher general and administrative expenses than our competitors that are managed by persons with experience operating a public company. If our finance and accounting organization is unable for any reason to respond adequately to the increased demands that will result from being a public company, the quality and timeliness of our financial reporting may suffer and we could experience significant deficiencies or material weaknesses in our disclosure controls and procedures and our internal control over financial reporting.

We have identified two significant deficiencies, as defined in the U.S. Public Company Accounting Oversight Board Standard AU Section 325, related to our internal control over financial reporting. One significant deficiency relates to IT controls over how program changes are migrated from testing to the actual environment and logical access. The other significant deficiency relates to our cost capitalization of development and specifically how we track our data regarding such development. Following the identification of these significant deficiencies, we have taken measures which we believe will remediate the significant deficiencies. However, the implementation of these measures may not fully address the significant deficiencies, and we cannot yet conclude that they have been fully remedied, nor can we assure you that there will be no significant deficiencies, or even material weaknesses, discovered in the future.

An inability to establish effective disclosure controls and procedures and internal control over financial reporting could cause us to fail to meet our reporting obligations under Exchange Act on a timely basis or result in material misstatements or omissions in our Exchange Act reports (including our financial statements), either of which, as well as the perception thereof, could cause investors to lose confidence in our company and could have a material adverse effect on us and cause the market price of our common stock to decline significantly. As a result of the foregoing, we cannot assure you that we will be able to execute our business and growth strategies as a publicly traded REIT.

Upon completion of this offering, Chad L. Williams, our Chairman and Chief Executive Officer, and General Atlantic will own approximately % and %, respectively, of our outstanding common

stock on a fully diluted basis. No other stockholder is permitted to own more than % of the aggregate of the outstanding shares of our common stock, except for certain designated investment entities that may own up to 9.8% of the aggregate of the outstanding shares of our common stock, subject to certain conditions, and except as approved by our board of directors pursuant to the terms of our charter. Consequently, Mr. Williams and General Atlantic may be able to significantly influence the outcome of matters submitted for stockholder action, including the election of our board of directors and approval of significant corporate transactions, such as business combinations, consolidations and mergers, as well as the determination of our day-to-day business decisions and management policies. In addition, General Atlantic and its affiliates may have an interest in directly or indirectly pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance their other equity investments, even though such transactions might involve risks to us. As a result, Mr. Williams and General Atlantic could exercise their influence on us in a manner that conflicts with the interests of other stockholders. Moreover, if Mr. Williams and/or General Atlantic were to sell, or otherwise transfer, all or a large percentage of their holdings, the market price of our common stock could decline and we could find it difficult to raise the capital necessary for us to execute our business and growth strategies.

In addition to the foregoing, Mr. Williams will have a significant vote in matters submitted to a vote of stockholders as a result of his ownership of Class B common stock (which gives Mr. Williams voting power equal to his fully diluted economic interest in us), including the election of directors. Mr. Williams may have interests that differ from holders of our Class A common stock, including by reason of his remaining interest in our operating partnership, and may accordingly vote in ways that may not be consistent with the interests of holders of Class A common stock.

In connection with this offering and the formation transactions, we will enter into a tax protection agreement with Chad L. Williams, our Chairman and Chief Executive Officer, and his affiliates and family members who own OP units that provides that if (1) we sell, exchange, transfer, convey or otherwise dispose of our Atlanta Metro, Suwanee or Santa Clara data centers in a taxable transaction prior to January 1, 2026, referred to as the protected period, (2) cause or permit any transaction that results in the disposition by Mr. Williams or his affiliates and family members who own OP units of all or any portion of their interests in the operating partnership in a taxable transaction during the protected period or (3) fail prior to the expiration of the protected period to maintain approximately $150 million of indebtedness that would be allocable to Mr. Williams and his affiliates for tax purposes or, alternatively, fail to offer Mr. Williams and his affiliates and family members who own OP units the opportunity to guarantee specific types of the operating partnership’s indebtedness in order to enable them to continue to defer certain tax liabilities, we will indemnify Mr. Williams and his affiliates and family members who own OP units against certain resulting tax liabilities. Therefore, although it may be in our stockholders’ best interest that we sell, exchange, transfer, convey or otherwise dispose of one of these properties, it may be economically prohibitive for us to do so during the protected period because of these indemnity obligations. Moreover, these obligations may require us to maintain more or different indebtedness than we would otherwise require for our business. As a result, the tax protection agreement will, during its term, restrict our ability to take actions or make decisions that otherwise would be in our best interests. As of June 30, 2013, our Atlanta Metro, Suwanee and Santa Clara data centers represented approximately 76% of our annualized rent.

Our charter and Maryland law contain provisions that may delay, defer or prevent a change in control of our company, even if such a change in control may be in your interest, and as a result may depress our common stock price.

The Stock Ownership Limit Imposed by the Code for REITs and Imposed by our Charter May Restrict our Business Combination Opportunities that Might Involve a Premium Price for Shares of Our Common Stock or Otherwise be in the Best Interest of Our Stockholders. In order for us to maintain our qualification as a REIT under the Code, not more than 50% in value of our outstanding stock may be owned, directly or indirectly, by five or fewer individuals (defined in the Code to include certain entities) at any time during the last half of each taxable year following our first year. Our charter, with certain exceptions, authorizes our board of directors to take the actions that are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our board of directors, no person may actually or constructively own more than % of the aggregate of the outstanding shares of our common stock by value or by number of shares, whichever is more restrictive, or % of the aggregate of the outstanding shares of our preferred stock by value or by number of shares, whichever is more restrictive. However, certain entities that are defined as designated investment entities in our charter, which generally includes pension funds, mutual funds and certain investment management companies, are permitted to own up to 9.8% of the aggregate of the outstanding shares of our common stock or preferred stock, so long as each beneficial owner of the shares owned by such designated investment entity would satisfy the % ownership limit if those beneficial owners owned directly their proportionate share of the common stock owned by the designated investment entity.

In addition, our charter provides an excepted holder limit that allows Chad L. Williams, his family members and entities owned by or for the benefit of them, and any person who is or would be a beneficial owner or constructive owner of shares of our common stock as a result of the beneficial ownership or constructive ownership of shares of our common stock by Chad L. Williams, his family members and certain entities controlled by them, as a group, to own more than % of the aggregate of the outstanding shares of our common stock, so long as, under the applicable tax attribution rules, no one such excepted holder treated as an individual would hold more than % of the aggregate of the outstanding shares of our common stock, no two such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock, no three such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock, no four such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock and no five such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock. Currently, Chad L. Williams would be attributed all of the shares of common stock owned by each such other excepted holder and, accordingly, the Williams excepted holders as a group would not be allowed to own in excess of % of the aggregate of the outstanding shares of our common stock. If at a later time, there were not one excepted holder that would be attributed all of the shares owned by such excepted holders as a group, the excepted holder limit as applied to the Williams group would not permit each such excepted holder to own % of the aggregate of the outstanding shares of our common stock. Rather, the excepted holder limit as applied to the Williams group would prevent two or more such excepted holders who are treated as individuals under the applicable tax attribution rules from owning a higher percentage of our common stock than the maximum amount of shares that could be owned by any one such excepted holder ( %), plus the maximum amount of shares of common stock that could be owned by any one or more other individual common stockholders who are not excepted holders ( %).

Atlantic, as a group, to own more than % of the aggregate of the outstanding shares of our common stock, so long as, under the applicable tax attribution rules, no one such excepted holder treated as an individual would hold more than % of the aggregate of the outstanding shares of our common stock, no two such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock, no three such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock, no four such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock, and no five such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock. Currently, there are more than five excepted holders who would be attributed all of the shares of common stock owned by General Atlantic. Therefore, the excepted holder limit as applied to the General Atlantic group would prevent five such excepted holders who are treated as individuals under the applicable tax attribution rules from owning a higher percentage of our common stock than the maximum amount of shares that could be owned by any one such excepted holder ( %), plus the maximum amount of shares that could be owned by any four other individual stockholders who are not excepted holders ( %).

Our board of directors may, in its sole discretion, grant other exemptions to the stock ownership limits, subject to such conditions and the receipt by our board of directors of certain representations and undertakings. We also intend to grant General Atlantic an exception from our ownership limit prior to or simultaneously with completion of this offering. In addition to these ownership limits, our charter also prohibits any person from (a) beneficially or constructively owning, as determined by applying certain attribution rules of the Code, our stock that would result in us being “closely held” under Section 856(h) of the Code or that would otherwise cause us to fail to qualify as a REIT, (b) transferring stock if such transfer would result in our stock being owned by fewer than 100 persons, (c) beneficially or constructively owning shares of our capital stock that would result in us owning (directly or indirectly) an interest in a tenant if the income derived by us from that tenant for our taxable year during which such determination is being made would reasonably be expected to equal or exceed the lesser of one percent of our gross income or an amount that would cause us to fail to satisfy any of the REIT gross income requirements and (d) beneficially or constructively owning shares of our capital stock that would cause us otherwise to fail to qualify as a REIT. The ownership limits imposed under the Code are based upon direct or indirect ownership by “individuals,” but only during the last half of a tax year. The ownership limits contained in our charter key off of the ownership at any time by any “person,” which term includes entities. These ownership limitations in our charter are common in REIT charters and are intended to provide added assurance of compliance with the tax law requirements, and to minimize administrative burdens. However, the ownership limits on our common stock also might delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders.

Our Authorized but Unissued Shares of Common and Preferred Stock May Prevent a Change in Control of Our Company that Might Involve a Premium Price for Shares of Our Common Stock or Otherwise be in the Best Interest of Our Stockholders. Our charter authorizes us to issue additional shares of common and preferred stock. In addition, our board of directors may, without stockholder approval, amend our charter to increase the aggregate number of shares of our common stock or the number of shares of stock of any class or series that we have authority to issue and classify or reclassify any unissued shares of common or preferred stock and set the preferences, rights and other terms of the classified or reclassified shares; provided that our board of directors may not amend our charter to increase the aggregate number of shares of Class B common stock that we have the authority to issue or reclassify any shares of our capital stock as Class B common stock without stockholder approval. As a result, our board of directors may establish a series of shares of common or preferred stock that could delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders. In addition, any preferred stock that we issue would rank senior to our

common stock with respect to the payment of distributions and other amounts (including upon liquidation), in which case we could not pay any distributions on our common stock until full distributions have been paid with respect to such preferred stock.

Certain Provisions of Maryland Law Could Inhibit a Change in Control of Our Company. Certain provisions of the Maryland General Corporation Law, or the MGCL, may have the effect of deterring a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-prevailing market price of our common stock. Our board of directors may elect to become subject to the “business combination” provisions of the MGCL that, subject to limitations, prohibit certain business combinations (including a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities) between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of our thenoutstanding voting capital stock or an affiliate or associate of ours who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of our then-outstanding voting capital stock) or an affiliate thereof for five years after the most recent date on which the stockholder becomes an interested stockholder. After the five-year prohibition, any business combination between us and an interested stockholder generally must be recommended by our board of directors and approved by the affirmative vote of at least (1) 80% of the votes entitled to be cast by holders of outstanding shares of our voting capital stock; and (2) two-thirds of the votes entitled to be cast by holders of voting capital stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. These super-majority vote requirements do not apply if our common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by a board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has by resolution opted out of the business combination provisions of the MGCL and, consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations between us and an interested stockholder, unless our board in the future alters or repeals this resolution. We cannot assure that you that our board of directors will not determine to become subject to such business combination provisions in the future. However, an alteration or repeal of this resolution will not have any effect on any business combinations that have been consummated or upon any agreements existing at the time of such modification or repeal.

The “control share” provisions of the MGCL provide that “control shares” of a Maryland corporation (defined as shares which, when aggregated with other shares controlled by the stockholder (except solely by virtue of a revocable proxy), entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding votes entitled to be cast by the acquirer of control shares, our officers and our personnel who are also our directors. Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of shares of our stock. There can be no assurance that this provision will not be amended or eliminated at any time in the future.

Certain provisions of the MGCL permit our board of directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to adopt certain provisions, some of which (for example, a classified board) we do not yet have, that may have the effect of limiting or precluding a third party from making an acquisition proposal for us or of delaying, deferring or

preventing a change in control of our company under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then current market price. For example, our charter contains a provision whereby we elect, at such time as we become eligible to do so, to be subject to the provisions of Title 3, Subtitle 8 of the MGCL relating to the filling of vacancies on our board of directors. See “Material Provisions of Maryland Law and of Our Charter and Bylaws.”

Certain Provisions in the Partnership Agreement of Our Operating Partnership May Delay, Defer or Prevent Unsolicited Acquisitions of us or Changes in Our Control. Provisions in the partnership agreement of our operating partnership may delay, defer or prevent unsolicited acquisitions of us or changes in our control. These provisions include, among others:

redemption rights of qualifying parties;

a requirement that we may not be removed as the general partner of the operating partnership without our consent;

transfer restrictions on our OP units;

our ability, as general partner, in some cases, to amend the partnership agreement without the consent of the limited partners; and

the right of the limited partners to consent to transfers of the general partnership interest and mergers under specified circumstances.

These provisions could discourage third parties from making proposals involving an unsolicited acquisition of us or change of our control, although some stockholders might consider such proposals, if made, desirable.

Our charter and bylaws, the partnership agreement of our operating partnership and Maryland law also contain other provisions that may delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interests. See “Description of the Partnership Agreement of QualityTech, LP—Transfers” and “Material Provisions of Maryland Law and of Our Charter and Bylaws—Removal of Directors,” “—Control Share Acquisitions,” “—Advance Notice of Director Nominations and New Business.”

Our Chairman and Chief Executive Officer has Outside Business Interests that Could Require Time and Attention and May Interfere with his Ability to Devote Time to our Business.

Chad L. Williams, our Chairman and Chief Executive Officer, has outside business interests that are not being contributed to our company which could require his time and attention. These interests include the ownership of our Overland Park, Kansas facility, at which our corporate headquarters is also located (which is leased to us), and certain office and other properties and certain other non-real estate business ventures. Mr. Williams’ employment agreement requires that he devote substantially all of his time to our company, provided that he will be permitted to engage in other specified activities, including the management of personal investments and affairs, including active involvement in real estate or other investments not involving data centers in any material respect. Mr. Williams may also have fiduciary obligations associated with these business interests that interfere with his ability to devote time to our business and that could have a material adverse effect on us.

We are a holding company with no direct operations and will rely on distributions received from our operating partnership to make distributions to our stockholders.

We are a holding company and conduct all of our operations through our operating partnership. We do not have, apart from our general and limited partnership interest in the operating partnership,

any independent operations. As a result, we will rely on distributions from our operating partnership to make any distributions to our stockholders we might declare on our common stock and to meet any of our obligations, including tax liability on taxable income allocated to us from our operating partnership (which might not make distributions to our company equal to the tax on such allocated taxable income). The ability of subsidiaries of the operating partnership to make distributions to the operating partnership, and the ability of our operating partnership to make distributions to us in turn, will depend on their operating results and on the terms of any financing arrangements they have entered into. Such financing arrangements may contain lockbox arrangements, reserve requirements, covenants and other provisions that prohibit or otherwise restrict the distribution of funds, including upon default thereunder. In addition, because we are a holding company, your claims as common stockholders of our company will be structurally subordinated to all existing and future liabilities and other obligations (whether or not for borrowed money) and any preferred equity of our operating partnership and its subsidiaries. Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our operating partnership and its subsidiaries will be able to satisfy the claims of our common stockholders only after all of our and our operating partnership’s and its subsidiaries’ liabilities and other obligations and any preferred equity have been paid in full.

After giving effect to this offering, we will own approximately % of limited partnership interests in our operating partnership ( % of the interests, if the underwriters’ option to purchase additional shares is exercised in full). Our operating partnership may, in connection with our acquisition of additional properties or otherwise, issue additional OP units to third parties. Such issuances would reduce our ownership in our operating partnership. Because you will not directly own OP units, you will not have any voting rights with respect to any such issuances or other partnership level activities of the operating partnership.

The value received by GA REIT and Chad L. Williams as a result of the formation transactions and this offering, and the percentage of our company that they will own following the completion of this offering, was not negotiated on an arm’s length basis. Further, the value of their interests in us will increase or decrease if the market price of our common stock increases or decreases. Therefore, the value of the interests that GA REIT and Mr. Williams will own in our company may exceed the fair market value of the assets they originally contributed to our operating partnership.

Conflicts of interest exist or could arise in the future with holders of OP units, which may impede business decisions that could benefit our stockholders.

Conflicts of interest exist or could arise in the future as a result of the relationships between us and our affiliates, on the one hand, and our operating partnership or any partner thereof, on the other. Our directors and officers have duties to our company and our stockholders under applicable Maryland law in connection with their management of our company. At the same time, we, as general partner, have fiduciary duties to our operating partnership and to its limited partners under Maryland law in connection with the management of our operating partnership. Our duties as general partner to our operating partnership and its partners may come into conflict with the duties of our directors and officers to our company and our stockholders. These conflicts may be resolved in a manner that is not in the best interest of our stockholders.

Additionally, the partnership agreement expressly limits our liability by providing that we and our officers, directors, agents and employees will not be liable or accountable to our operating partnership

for losses sustained, liabilities incurred or benefits not derived if we or such officer, director, agent or employee acted in good faith. In addition, our operating partnership is required to indemnify us, and our officers, directors, agents, employees and designees to the extent permitted by applicable law from and against any and all claims arising from operations of our operating partnership, unless it is established that (1) the act or omission was committed in bad faith, was fraudulent or was the result of active and deliberate dishonesty, (2) the indemnified party received an improper personal benefit in money, property or services or (3) in the case of a criminal proceeding, the indemnified person had reasonable cause to believe that the act or omission was unlawful. The provisions of Maryland law that allow the fiduciary duties of a general partner to be modified by a partnership agreement have not been resolved in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties that would be in effect were it not for the partnership agreement.

Our rights and the rights of our stockholders to take action against our directors and officers are limited, which could limit our stockholders’ recourse in the event of actions not in our stockholders’ best interests.

Under Maryland law generally, a director is required to perform his or her duties in good faith, in a manner he or she reasonably believes to be in the best interests of our company and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Under Maryland law, directors are presumed to have acted with this standard of care. In addition, our charter limits the liability of our directors and officers to us and our stockholders for money damages, except for liability resulting from:

actual receipt of an improper benefit or profit in money, property or services; or

active and deliberate dishonesty by the director or officer that was established by a final judgment as being material to the cause of action adjudicated.

Our charter obligates us to indemnify our directors and officers for actions taken by them in those capacities to the maximum extent permitted by Maryland law. Our bylaws require us to indemnify each director or officer, to the maximum extent permitted by Maryland law, in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service to us. In addition, we may be obligated to advance the defense costs incurred by our directors and officers. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist absent the current provisions in our charter and bylaws or that might exist with other companies.

Our board of directors may change our policies and practices and enter into new lines of business without a vote of our stockholders, which limits your control of our policies and practices and could have a material adverse effect on us.

Our major policies, including our policies and practices with respect to investments, financing, growth and capitalization, are determined by our board of directors. We may change these and other policies from time to time or enter into new lines of business, at any time, without the consent of our stockholders. Accordingly, our stockholders will have limited control over changes in our policies. These changes could result in our making investments and engaging in business activities that are different from, and possibly riskier than, the investments and business activities described in this prospectus. A change in our policies and procedures or our entry into new lines of business may increase our exposure to other risks or real estate market fluctuations and could have a material adverse effect on us.

Risks Related to this Offering

The net proceeds of this offering will be used to repay the promissory note secured by our Dallas facility and certain amounts outstanding under our unsecured revolving credit facility, and any remaining net proceeds may be used for other purposes, including to fund ongoing development costs and future acquisitions. We have not identified specific acquisitions for which we may use the remaining balance of the net proceeds of this offering. While we expect to apply any remaining net proceeds in a manner consistent with our business plan and acquisition strategies, we may not be able to identify, acquire, and successfully manage or otherwise exploit new investment opportunities, and we cannot assure you that the net proceeds so applied will result in any improvement in our business. Therefore, you will be unable to evaluate the allocation of this portion of the net proceeds from this offering or the economic merits of any redevelopment projects, acquisitions or other uses of such proceeds before making an investment decision to purchase our common stock.

We intend to pay regular quarterly distributions to our stockholders and have targeted an initial distribution rate based upon our estimate of our annualized cash flow that will be available for distribution. No assurance can be given that our estimated cash available for distribution to our stockholders will be accurate or that our actual cash available for distribution to our stockholders will be sufficient to pay distributions to them at any expected or REIT-required level or at any particular yield, or at all. Accordingly, we may need to borrow or rely on other third-party capital to make distributions to our stockholders, and such third-party capital may not be available to us on favorable terms or at all. As a result, we may not be able to pay distributions to our stockholders in the future. Our failure to pay any such distributions or to pay distributions that fail to meet our stockholders’ expectations from time to time or the distribution requirements for a REIT could cause the market price of our common stock to decline significantly. All distributions will be made at the discretion of our board of directors and will depend on our historical and projected results of operations, liquidity and financial condition, our REIT qualification, our debt service requirements, operating expenses and capital expenditures, prohibitions and other restrictions under financing arrangements and applicable law and other factors as our board of directors may deem relevant from time to time. In addition, we may pay distributions some or all of which may constitute a return of capital. To the extent that we decide to make distributions in excess of our current and accumulated earnings and profits, such distributions would generally be considered a return of capital for federal income tax purposes to the extent of the holder’s adjusted tax basis in its shares. A return of capital is not taxable, but it has the effect of reducing the holder’s adjusted tax basis in its investment. To the extent that distributions exceed the adjusted tax basis of a holder’s shares, they will be treated as gain from the sale or exchange of such shares. See “U.S. Federal Income Tax Considerations—Taxation of Holders of Stock.” If we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been.

Future issuances or sales of our common stock, or the perception of the possibility of such issuances or sales, may depress the market price of our common stock.

We cannot predict the effect, if any, of our future issuances or sales of our common stock or OP units, or future resales of our common stock or OP units by existing holders, or the perception of such

issuances, sales or resales, on the market price of our common stock. Any such future issuances, sales or resales, or the perception that such issuances, sales or resales might occur, could depress the market price of our common stock and also may make it more difficult and costly for us to sell equity or equity-related securities in the future at a time and upon terms that we deem desirable.

Upon completion of this offering, we will have shares of our Class A common stock outstanding. In addition, upon the completion of this offering, we will have shares of our Class B common stock and OP units outstanding (each of which may, and in certain cases must, exchange into shares of Class A common stock on a one-for-one basis). Subject to applicable law, our board of directors has the authority, without further stockholder approval, to issue additional shares of common stock and preferred stock on the terms and for the consideration it deems appropriate.

We and our officers and directors and the Selling Stockholder have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any shares of our common stock or securities convertible into or exchangeable or exercisable for shares of our Class A common stock (including Class B common stock and OP units) during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of the representatives. If the restrictions under the lock-up arrangements expire or are waived, the related shares of common stock will be available for sale or resale, as the case may be, and such sales or resales, or the perception of such sales or resales, could depress the market price for our common stock. Accordingly, you should not rely upon such lock-up agreements to limit the number of shares of our common stock sold into the market.

In addition to the restricted stock granted to our directors, executive officers and other employees under our equity incentive plan in connection with this offering, in the future we may issue shares of our common stock and securities convertible into, or exchangeable or exercisable for, our common stock under our equity incentive plan. We intend to file with the SEC a registration statement on Form S-8 covering the common stock issuable under our equity incentive plan. Shares of our common stock covered by such registration statement will be eligible for transfer or resale without restriction under the Securities Act, unless held by affiliates. We also may issue from time to time additional shares of our common stock or OP units in connection with acquisitions and may grant registration rights in connection with such issuances pursuant to which we would agree to register the resale of such securities under the Securities Act. In addition, we have granted registration rights to General Atlantic, Chad L. Williams, our Chairman and Chief Executive Officer, and others with respect to shares of common stock owned by them or to be received by them in connection with our formation transactions or upon redemption of OP units held by them. The market price of our common stock may decline significantly upon the registration of additional shares of our common stock pursuant to registration rights granted in our formation transactions, see “Certain Relationships and Related Party Transactions—Registration Rights” or future issuances of equity in connection with acquisitions or our equity incentive plan.

Future issuances of debt securities, which would rank senior to our common stock upon our liquidation, and future issuances of equity securities (including OP units), which would dilute the holdings of our existing common stockholders and may be senior to our common stock for the purposes of making distributions, periodically or upon liquidation, may negatively affect the market price of our common stock.

In the future, we may issue debt or equity securities or incur other borrowings. Upon our liquidation, holders of our debt securities and other loans and preferred stock will receive a distribution of our available assets before common stockholders. If we incur debt in the future, our future interest costs could increase and adversely affect our results of operations and liquidity.

We are not required to offer any additional equity securities to existing common stockholders on a preemptive basis. Therefore, additional common stock issuances, directly or through convertible or exchangeable securities (including OP units), warrants or options, will dilute the holdings of our existing common stockholders and such issuances, or the perception of such issuances, may reduce the market price of our common stock. Our preferred stock, if issued, would likely have a preference on distribution payments, periodically or upon liquidation, which could eliminate or otherwise limit our ability to make distributions to common stockholders. Because our decision to issue debt or equity securities or incur other borrowings in the future will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, nature or success of our future capital-raising efforts. Thus, common stockholders bear the risk that our future issuances of debt or equity securities or our incurrence of other borrowings will negatively affect the market price of our common stock.

We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company” as defined in the JOBS Act. We will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of this offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act. We may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions and benefits under the JOBS Act. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and the market price of our common stock may be more volatile and decline significantly.

If you purchase common stock in this offering, you will experience immediate and substantial dilution.

We expect the initial public offering price of our common stock to be higher than the pro forma net tangible book value per share of our outstanding common stock. Accordingly, if you purchase common stock in this offering, you will experience immediate dilution of approximately $ in the pro forma net tangible book value per share of common stock. This means that investors who purchase common stock in this offering will pay a price per share that exceeds the per share pro forma book value of our tangible assets after subtracting our liabilities.

There is currently no public market for our common stock and an active trading market for our common stock may never develop or, if one develops, be sustained following this offering.

Prior to this offering, there has not been a public market for our common stock. An active trading market for our common stock may never develop or, if one develops, be sustained, which may adversely affect your ability to sell your common stock at the timing and price desired and could depress the market price of your common stock. In addition, the initial public offering price will be determined through negotiations between us and the representatives of the underwriters and, accordingly, the market price of our common stock after this offering may trade below the initial public offering price in this offering.

The trading volume and market price of our common stock may be volatile and could decline significantly following this offering.

Even if an active trading market develops and is sustained for our common stock, the market price of our common stock may be volatile. The stock markets, including the NYSE, on which we expect to list our common stock, have experienced significant price and volume fluctuations. As a result, the market price of our common stock is likely to be similarly volatile, and could decline significantly after this offering, unrelated to our operating performance or prospects. The market price of our common stock could be subject to wide fluctuations in response to a number of factors, including those listed in this “Risk Factors” section of this prospectus and others such as:

our operating performance and prospects and those of other similar companies;

actual or anticipated variations in our financial condition, liquidity, results of operations, FFO, NOI, EBITDA or MRR in the amount of distributions, if any, paid to our stockholders;

changes in our estimates or those of securities analysts relating to our earnings or other operating metrics;

publication of research reports about us, our significant customers, our competition, data center companies generally, the real estate industry or the technology industry;

additions or departures of key personnel;

the passage of legislation or other regulatory developments that adversely affect us or our industry;

changes in market valuations of similar companies;

adverse market reaction to leverage we may incur or equity we may issue in the future;

actions by institutional stockholders;

actual or perceived accounting issues, including changes in accounting principles;

compliance with NYSE requirements;

our qualification and maintenance as a REIT;

terrorist acts;

speculation in the press or investment community;

the realization of any of the other risk factors presented in this prospectus;

adverse developments in the creditworthiness, business or prospects of one or more of our significant customers; and

general market and economic conditions.

In the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of their common stock. This type of litigation, if brought against us, could result in substantial costs and divert our management’s attention and resources, which could have a material adverse effect on us.

Increases in market interest rates may cause prospective purchasers to seek higher distribution yields and therefore reduce demand for our common stock and result in a decline in the market price of our common stock.

The price of our common stock may be influenced by our distribution yield (i.e., the amount of our annual or annualized distributions, if any, as a percentage of the market price of our common stock)

relative to market interest rates. An increase in market interest rates, which are currently low relative to historical levels, may lead prospective purchasers and holders of our common stock to expect a higher distribution yield, which we may not be able, or may choose not, to satisfy. As a result, prospective purchasers may decide to purchase other securities rather than our common stock, which would reduce the demand for our common stock, and existing holders of our common stock may decide to sell their shares, either of which could result in a decline in the market price of our common stock.

Affiliates of our underwriters may receive benefits in connection with this offering that create potential conflicts of interest.

Affiliates of each of the underwriters of this offering are lenders under our unsecured credit facility. To the extent that our operating partnership uses a portion of the net proceeds received by us from this offering to repay borrowings outstanding under our unsecured credit facility, such affiliates of our underwriters will receive their proportionate shares of any amount of our unsecured credit facility that is repaid with the net proceeds received by us from this offering. These transactions create potential conflicts of interest because the underwriters have an interest in the successful completion of this offering beyond the underwriting discounts and commissions they will receive. These interests may influence the decision regarding the terms and circumstances under which the offering is completed.

Risks Related to Our Status as a REIT

We intend to operate in a manner that will allow us to qualify as a REIT for federal income tax purposes under the Code commencing with our taxable year ending December 31, 2013. We have received an opinion of our special REIT tax counsel, Hogan Lovells, with respect to our qualification as a REIT in connection with this offering of common stock. Investors should be aware, however, that opinions of counsel are not binding on the Internal Revenue Service, or IRS, or any court. The opinion of Hogan Lovells represents only the view of Hogan Lovells based on its review and analysis of existing law and on certain representations as to factual matters and covenants made by us, including representations relating to the values of our assets and the sources of our income. The opinion is expressed as of the date issued. Hogan Lovells will have no obligation to advise us or the holders of our common stock of any subsequent change in the matters stated, represented or assumed or of any subsequent change in applicable law. Furthermore, both the validity of the opinion of Hogan Lovells and our qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis, the results of which will not be monitored by Hogan Lovells. Our ability to satisfy the asset tests depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals.

Although we have requested a private letter ruling from the IRS, in respect of certain limited matters, as further described below under “U.S. Federal Income Tax Considerations,” we have not requested and do not plan to request a ruling from the IRS, that we qualify as a REIT, and the statements in this prospectus are not binding on the IRS, or any court. If we lose our REIT status, we will face serious tax consequences that would substantially reduce our cash available for distribution to our stockholders and our business operations in general for each of the years involved because:

we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to federal income tax at regular corporate rates and, therefore, would have to pay significant income taxes;

we also could be subject to the federal alternative minimum tax and possibly increased state and local taxes; and

unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified.

In addition, if we fail to qualify as a REIT, we will not be required to make distributions to stockholders, and all distributions to stockholders will be subject to tax as dividend income to the extent of our current and accumulated earnings and profits. As a result of all these factors, our failure to qualify as a REIT also could impair our ability to execute our business and growth strategies and could have a material adverse effect on us and depress the market price of our common stock.

Qualifying as a REIT involves highly technical and complex provisions of the Code and therefore, in certain circumstances, may be subject to uncertainty.

In order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the composition of our assets, the sources of our income and the diversity of our share ownership. Also, we must make distributions to stockholders aggregating annually at least 90% of our “REIT taxable income” (determined without regard to the dividends paid deduction and excluding net capital gain). Compliance with these requirements and all other requirements for qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The complexity of these provisions and of the applicable Treasury regulations that have been promulgated under the Code is greater in the case of a REIT that, like us, holds its assets through a partnership and conducts significant business operations through a taxable REIT subsidiary. Even a technical or inadvertent mistake could jeopardize our REIT status. In addition, the determination of various factual matters and circumstances relevant to REIT qualification is not entirely within our control and may affect our ability to qualify as a REIT. Accordingly, we cannot be certain that our organization and operation will enable us to qualify as a REIT for federal income tax purposes.

Even if we qualify as a REIT, we will be subject to some taxes that will reduce our cash flow.

Even if we qualify for taxation as a REIT, we may be subject to certain federal, state and local taxes on our income and assets, including taxes on any undistributed income, tax on income from some activities conducted as a result of a foreclosure, and state or local income, property and transfer taxes. Any of these taxes would decrease cash available for the payment of our debt obligations and distributions to stockholders. Quality Technology Services Holding, LLC, our taxable REIT subsidiary, and certain of its subsidiaries will be subject to federal corporate income tax on their net taxable income, if any, which is initially expected to consist of the revenues mainly derived from providing technical services on a contract basis to our customers.

Moreover, if we have net income from “prohibited transactions,” that income will be subject to a 100% tax. In general, prohibited transactions are sales or other dispositions by us and not by our taxable REIT subsidiary of property held primarily for sale to customers in the ordinary course of business. The determination as to whether a particular sale is a prohibited transaction depends on the facts and circumstances related to that sale. The need to avoid prohibited transactions could cause us to forgo or defer sales of properties that our operating partnership and the entities that held our acquired properties otherwise would have sold or that might otherwise be in our best interest to sell.

If the structural components of our properties were not treated as real property for purposes of the REIT qualification requirements, we could fail to qualify as a REIT, which could have a material adverse effect on us.

A significant portion of the value of our properties is attributable to structural components related to the provision of electricity, heating ventilation and air conditioning, humidification regulation, security and fire protection, and telecommunication services. If rent attributable to personal property leased in connection with a lease of real property is significant, the portion of total rent that is attributable to the personal property will not be qualifying income for purposes of the REIT income tests. Therefore, if our structural components are determined not to constitute real property for purposes of the REIT qualification requirements, we could fail to qualify as a REIT, which could have a material adverse effect on us and depress the market price of our common stock.

To maintain our REIT status, we may be forced to seek third-party capital during unfavorable market conditions.

To qualify as a REIT, we generally must distribute to our stockholders at least 90% of our “REIT taxable income” (determined without regard to the dividends paid deduction and excluding net capital gain) each year, and we will be subject to regular corporate income taxes to the extent that we distribute less than 100% of our “REIT taxable income” each year. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. In order to maintain our REIT status and avoid the payment of income and excise taxes, we may need to seek third-party capital to meet the REIT distribution requirements even if the then-prevailing market conditions are not favorable. These capital needs could result from differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes, the effect of non-deductible capital expenditures, the creation of reserves or required debt or amortization payments.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends, which could depress the market price of our common stock if it is perceived as a less attractive investment.

The American Taxpayer Relief Act of 2012, or ATRA, was enacted on January 3, 2013. Under ATRA, for taxable years beginning after 2012, for non-corporate taxpayers, the maximum rate applicable to “qualified dividend income” paid by regular “C” corporations to U.S. stockholders generally is 20%. Dividends payable by REITs, however, generally are not eligible for the current reduced rate, except to the extent that certain holding requirements have been met and a REIT’s dividends are attributable to dividends received by a REIT from taxable corporations (such as a REIT’s taxable REIT subsidiaries), to income that was subject to tax at the REIT/corporate level, or to dividends properly designated by the REIT as “capital gains dividends.” Although ATRA does not adversely affect the taxation of REITs or dividends payable by REITs, it could cause non-corporate taxpayers to perceive investments in REITs to be relatively less attractive than investments in the stocks of regular “C” corporations that pay dividends, which could depress the market price of the stock of REITs, including our common stock.

Complying with REIT requirements may cause us to liquidate or forgo otherwise attractive investment opportunities.

To qualify as a REIT, we must ensure that, at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and “real estate assets” (as defined in the Code), including certain mortgage loans and securities. The remainder of our investments (other than government securities, qualified real estate assets and securities issued by a

TRS) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our total assets (other than government securities, qualified real estate assets and securities issued by a TRS) can consist of the securities of any one issuer, and no more than 25% of the value of our total assets can be represented by securities of one or more TRSs. See “U.S. Federal Income Tax Considerations.” If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate or forgo otherwise attractive investment opportunities. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders.

In addition to the asset tests set forth above, to qualify as a REIT we must continually satisfy tests concerning, among other things, the sources of our income, the amounts we distribute to our stockholders and the ownership of our stock. We may be unable to pursue investment opportunities that would be otherwise advantageous to us in order to satisfy the source-of-income or asset-diversification requirements for qualifying as a REIT. Thus, compliance with the REIT requirements may hinder our ability to make certain attractive investments.

Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.

The REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities. Any income from a hedging transaction that we enter into to manage the risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets does not constitute “gross income” for purposes of the 75% or 95% gross income tests that apply to REITs, provided that certain identification requirements are met. To the extent that we enter into other types of hedging transactions or fail to properly identify such transaction as a hedge, the income is likely to be treated as non-qualifying income for purposes of both of the gross income tests. See “U.S. Federal Income Tax Considerations.” As a result of these rules, we may be required to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRS may be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in our TRS will generally not provide any tax benefit, except that such losses could theoretically be carried back or forward against past or future taxable income in the TRS.

If our OP fails to qualify as a partnership for federal income tax purposes, we would fail to qualify as a REIT and suffer other adverse consequences.

We believe that our operating partnership is organized and will be operated in a manner so as to be treated as a partnership, and not an association or publicly traded partnership taxable as a corporation for federal income tax purposes. As a partnership, it will not be subject to federal income tax on its income. Instead, each of its partners, including us, will be allocated that partner’s share of the operating partnership’s income. No assurance can be provided, however, that the IRS will not challenge its status as a partnership for federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating our operating partnership as an association or publicly traded partnership taxable as a corporation for federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, would cease to qualify as a REIT. Also, the failure of our operating partnership to qualify as a partnership would cause it to become subject to federal corporate income tax, which would reduce significantly the amount of its cash available for debt service and for distribution to its partners, including us.

We will have a carryover tax basis on certain of our assets as a result of the formation transactions, and the amount that we have to distribute to stockholders therefore may be higher.

As a result of the tax-free merger of GA REIT with and into us, certain of our operating properties, including Atlanta Metro, Suwanee, Richmond, Santa Clara, Miami and Wichita, will have carryover tax bases that are lower than the fair market values of these properties at the time of this offering. As a result of this lower aggregate tax basis, we will recognize higher taxable gain upon the sale of these assets, and we will be entitled to lower depreciation deductions on these assets than if we had purchased these properties in taxable transactions at the time of this offering. Lower depreciation deductions and increased gains on sales generally will increase the amount of our required distribution under the REIT rules, and will decrease the portion of any distribution that otherwise would have been treated as a “return of capital” distribution.

As a result of our formation transactions, our TRS may be limited in using certain tax benefits and, consequently, may have greater taxable income.

If a corporation undergoes an “ownership change” within the meaning of Section 382 of the Code and the Treasury Regulations thereunder, such corporation’s ability to use net operating losses, or NOLs, generated prior to the time of that ownership change may be limited. To the extent the affected corporation’s ability to use NOLs is limited, such corporation’s taxable income may increase. As of June 30, 2013, we had approximately $17.6 million of NOLs (all of which are attributable to our TRS) that will begin to expire in 2029 if not utilized. In general, an ownership change occurs if one or more large stockholders, known as “5% stockholders,” including groups of stockholders that may be aggregated and treated as a single 5% stockholder, increase their aggregate percentage interest in a corporation by more than 50% over their lowest ownership percentage during the preceding three-year period. We believe that the formation transactions will cause an ownership change within the meaning of Section 382 of the Code with respect to our TRS. Accordingly, to the extent our TRS has taxable income in future years, its ability to use NOLs incurred prior to our formation transactions in such future years will be limited, and it will have greater taxable income as a result of such limitation.

Legislative or other actions affecting REITs could materially and adversely affect us and our investors.

The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury. Changes to the tax laws, with or without retroactive application, could materially and adversely affect us and our investors. We cannot predict how changes in the tax laws might affect us or our investors. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT or the federal income tax consequences of such qualification.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this prospectus constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In particular, statements pertaining to our capital resources, portfolio performance and results of operations contain forward-looking statements. Likewise, our pro forma financial statements and all of our statements regarding anticipated growth in our funds from operations and anticipated market conditions are forward-looking statements. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “pro forma,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

The forward-looking statements contained in this prospectus reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

adverse economic or real estate developments in our markets or the technology industry;

national and local economic conditions;

difficulties in identifying properties to acquire and completing acquisitions;

our failure to successfully develop, redevelop and operate acquired properties and operations;

significant increases in construction and development costs;

the increasingly competitive environment in which we operate;

defaults on or non-renewal of leases by customers;

increased interest rates and operating costs, including increased energy costs;

financing risks, including our failure to obtain necessary outside financing;

decreased rental rates or increased vacancy rates;

dependence on third parties to provide Internet, telecommunications and network connectivity to our data centers;

our failure to qualify and maintain our qualification as a REIT;

environmental uncertainties and risks related to natural disasters;

financial market fluctuations; and

changes in real estate and zoning laws and increases in real property tax rates.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause our future results to differ materially from any forward-looking statements, see the section above entitled “Risk Factors.”

USE OF PROCEEDS

We estimate that the net proceeds we will receive from this offering, after deducting the underwriting discounts and commissions and estimated expenses of the offering payable by us, will be approximately $ million (or approximately $ million if the underwriters exercise their option to purchase additional shares in full), based on an assumed initial public offering price of $ per share, which is the mid-point of the range set forth on the front cover of this prospectus.

We intend to contribute the net proceeds received by us from this offering to our operating partnership in exchange for OP units. The operating partnership intends to use the net proceeds as follows:

approximately $ million to repay amounts outstanding under our unsecured revolving credit facility; and

the remaining balance to fund ongoing redevelopment costs, to fund future acquisitions and for general corporate purposes.

Pending application of the cash proceeds, we will invest the net proceeds in interest-bearing accounts and short-term, interest-bearing securities, which are consistent with our intention to qualify for taxation as a REIT.

As of June 30, 2013, we had approximately $244 million outstanding under our unsecured revolving credit facility. The unsecured revolving credit facility matures on May 1, 2017 (which maturity may be extended for an additional one year at our option subject to certain conditions). Amounts outstanding under our unsecured revolving credit facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will range, depending upon our leverage ratio, from 2.10% to 2.85% for LIBOR rate loans or 1.10% to 1.85% for base rate loans, and bore interest at a rate of 2.55% as of June 30, 2013.

The proceeds of the unsecured revolving credit facility have been used to repay amounts outstanding under our secured credit facility, a loan secured by our Miami facility, a bridge loan secured by our Santa Clara facility, seller financing obtained to acquire our Lenexa and Dallas facilities, a loan for the purchase of land near our Suwanee facility and a loan from Chad L. Williams and entities controlled by Mr. Williams, and for redevelopment purposes.

Affiliates of each of the underwriters of this offering are lenders under our unsecured credit facility. As described above, our operating partnership intends to use a portion of the net proceeds to repay borrowings outstanding under our unsecured revolving credit facility. As such, these affiliates will receive their proportionate shares of any amount of our unsecured revolving credit facility that is repaid with the net proceeds of this offering. See “Underwriting.” The repayment of amounts outstanding under our unsecured revolving credit facility will not affect the commitments of these affiliates of the underwriters to fund future amounts thereunder in accordance with the terms of the facility.

We will not receive any proceeds from the sale of our Class A common stock by the Selling Stockholder.

DISTRIBUTION POLICY

Our intended initial annual distribution rate has been established based on our estimate of cash available for distribution for the 12-month period ending June 30, 2014, which we have calculated based on adjustments to our pro forma income from continuing operations for the 12 months ended June 30, 2013 (after giving effect to this offering). This estimate was based on the pro forma operating results and does not take into account our business and growth strategies, nor does it take into account any unanticipated expenditures we may have to make or any financings to fund such expenditures. In estimating our cash available for distribution for the 12 months ending June 30, 2014, we have made certain assumptions as reflected in the table and footnotes below.

Our estimate of cash available for distribution does not include the effect of any changes in our working capital resulting from changes in our working capital accounts. Our estimate also does not reflect the amount of cash estimated to be used for investing activities for acquisition, redevelopment and other capital expenditures and other activities, other than recurring capital expenditures. It also does not reflect the amount of cash estimated to be used for financing activities, other than scheduled loan principal payments on mortgage and other indebtedness that will be outstanding upon completion of this offering. Any such investing and/or financing activities may materially and adversely affect our estimate of cash available for distribution. Because we have made the assumptions set forth above in estimating cash available for distribution, we do not intend this estimate to be a projection or forecast of our actual results of operations, EBITDA, NOI, FFO, liquidity or financial condition and have estimated cash available for distribution for the sole purpose of determining our estimated initial annual distribution amount. Our estimate of cash available for distribution should not be considered as an alternative to cash flow from operating activities (computed in accordance with GAAP) or as an indicator of our liquidity or our ability to pay distributions. In addition, the methodology upon which we made the adjustments described below is not necessarily intended to be a basis for determining future dividends or other distributions.

No assurance can be given that our estimated cash available for distribution to our stockholders will be accurate or that our actual cash available for distribution to our stockholders will be sufficient to pay distributions to them at any expected or REIT-required level or at any particular yield, or at all. Accordingly, we may need to borrow or rely on other third-party capital to make distributions to our stockholders, and such third-party capital may not be available to us on favorable terms or at all. As a result, we may not be able to pay distributions to our common stockholders in the future. In addition, our preferred stock, if issued, would likely have a preference on distribution payments. All distributions will be made at the discretion of our board of directors and will depend on our historical and projected results of operations, liquidity and financial condition, our REIT qualification, our debt service requirements, operating expenses and capital expenditures, prohibitions and other restrictions under financing arrangements and applicable law and other factors as our board of directors may deem relevant from

time to time. If we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been. Distributions in excess of our current and accumulated earnings and profits will not be taxable to a taxable U.S. stockholder under current U.S. federal income tax law to the extent those distributions do not exceed the stockholder’s adjusted tax basis in his or her common stock, but rather will reduce the adjusted basis of the common stock. In that case, the gain (or loss) recognized on the sale of those common stock or upon our liquidation will be increased (or decreased) accordingly. To the extent those distributions exceed a taxable U.S. stockholder’s adjusted tax basis in his or her common stock, they generally will be treated as a gain realized from the taxable disposition of those shares. The percentage of our distributions to our stockholders that exceeds our current and accumulated earnings and profits may vary substantially from year to year. For a more complete discussion of the tax treatment of distributions to holders of our common stock, see “U.S. Federal Income Tax Considerations.”

Our unsecured credit facility and Richmond credit facility contain provisions that may limit our ability to make distributions to our stockholders. These facilities generally provide that if a default occurs and is continuing, we will be precluded from making distributions on our common stock (other than those required to allow us to qualify and maintain our status as a REIT, so long as such default does not arise from a payment default or event of insolvency) and lenders under the facility and, potentially, other indebtedness, could accelerate the maturity of the related indebtedness. In addition, these facilities also contain covenants providing for a maximum distribution of the greater of (i) 95% of our Funds from Operations (as defined in such agreement) and (ii) the amount required for us to qualify as a REIT.

U.S. federal income tax law requires that a REIT distribute annually at least 90% of its REIT taxable income, excluding net capital gains, and that it pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its REIT taxable income, including capital gains. For more information, please see “U.S. Federal Income Tax Considerations.” We anticipate that our estimated cash available for distribution will exceed the annual distribution requirements applicable to REITs and the amount necessary to avoid the payment of tax on undistributed income. However, under some circumstances, we may be required to make distributions in excess of cash available for distribution in order to meet these distribution requirements and we may need to borrow funds to make certain distributions.

The following table describes our pro forma income from continuing operations for the year ended December 31, 2012, and the adjustments we have made thereto in order to estimate our initial cash available for distribution for the 12 months ending June 30, 2014 (amounts in millions except share data, per share data, square footage data and percentages):


Pro forma income (loss) from continuing operations for the 12 months ended December 31, 2012		$
Less: Pro forma income (loss) from continuing operations for the six months ended June 30, 2012
Add: Pro forma income (loss) from continuing operations for the six months ended June 30, 2013

Pro forma income (loss) from continuing operations for the 12 months ended June 30, 2013		$
Add: Pro forma depreciation and amortization(1)
Add: Net increases in contractual rental income during the 12 months ended June 30, 2013(2)
Add: Net increases in contractual rental income during the 12 months ending June 30, 2014(3)
Less: Net decreases in contractual rental income due to lease expirations, assuming rental churn based on historical data(4)
Less: Net effects of straight line rents(5)
Add: Non-cash compensation expense(6)
Add: Amortization of deferred financing costs(7)


Estimated cash flow from operating activities for the 12 months ending June 30, 2014	$
Estimated cash flows used in investing activities:
Less: Contractual obligations for leasing commissions(8)
Less: Estimated annual provision for recurring capital expenditures(9)

Total estimated cash flows used in investing activities
Estimated cash flows used in financing activities—scheduled principal amortization payments of capital and other long-term lease obligations(10)

Estimated cash available for distribution for the 12 months ending June 30, 2014	$
Our share of estimated cash available for distribution(11)
Non-controlling interests’ share of estimated cash available for distribution
Total estimated initial annual distributions to stockholders	$
Estimated initial annual distribution per share(12)	$
Payout ratio based on our share of estimated cash available for distribution(13)		%


(1)	Pro forma depreciation and amortization for the 12 months ended December 31, 2012	$
	Less: pro forma depreciation and amortization for the six months ended June 30, 2012	$
	Add: pro forma depreciation and amortization for the six months ended June 30, 2013	$

	Pro forma depreciation and amortization for the 12 months ended June 30, 2013	$
(2)	Represents net increases in contractual rental revenue from new leases, renewals and contractual rent increases, net of abatements, that were not in effect for the entire 12-month period ended June 30, 2013, based on leases entered into or that expired and were not renewed through June 30, 2013, less estimated variable expenses associated with such leases using our average NOI margin (excluding recoveries from customers) of % for the 12 months ended June 30, 2013:


	Total net increases in contractual rental revenue during the 12 months ended June 30, 2013 due to leases that were not in effect for the entire 12 month period ended June 30, 2013	$
	Average NOI margin (excluding recoveries from customers) for the 12 months ended June 30, 2013		%
	Total estimated increase in contractual rental income during the 12 months ending June 30, 2014 due to leases that were not in effect for the entire 12-month period ended June 30, 2013	$
(3)	Represents net increases in contractual rental revenue from new leases, renewals and contractual rent increases, net of abatements, entered into as of , 2013, that will go into effect during the 12-month period ending June 30, 2014, less estimated variable expenses associated with such leases using our average NOI margin (excluding recoveries from customers) of % for the 12 months ending June 30, 2014:
	Total net increases in contractual rental revenue that will go into effect during the 12-month period ending June 30, 2014 from new leases entered into as of , 2013	$
	Average NOI margin (excluding recoveries from customers) for the 12 months ended June 30, 2013		%
	Total estimated increase in contractual rental income during the 12 months ending June 30, 2014 due to increases in contractual rental revenue that will go into effect during the 12-month period ending June 30, 2014.	$



		Contractual rental revenue to be recognized during the 12-month period ending June 30, 2014 is determined as follows:
		Annualized contractual rental revenue from new leases, renewals and contractual rent increases, net of abatements, entered into as of June 30, 2013		$
		Less: Annualized contractual rental revenue from leases, renewals and contractual rent increases, net of abatements, entered into as of , 2013 that will not commence billing until after June 30, 2014		$
		Less: Contractual rental revenue from leases, renewals and contractual rent increases, net of abatements, entered into as of , 2013 not recognized in the 12-month period ending June 30, 2014 due to timing of commencement of billing		$

		Contractual rental revenue to be recognized during the 12-month period ending June 30, 2014 from new leases, renewals and contractual rent increases, net of abatements		$


(4)		Represents estimated decreases in contractual rental revenue during the 12 months ending June 30, 2014 due to lease terminations and expirations, assuming an annual rental churn rate of % (which is equal to our rental churn rate for the 6-month period ended June 30, 2013 multiplied by two), less estimated variable expenses associated with such leases using our average NOI margin (excluding recoveries from tenants) of % for the 12-month period ended June 30, 2013. We define rental churn as when a customer completely departs our platform in a given period. This presentation assumes no additional leasing activity through June 30, 2014 and no customer downgrades prior to June 30, 2014.
(5)		Represents the conversion of estimated rental revenues and expenses for the 12 months ended June 30, 2013 from a straight-line basis to cash basis recognition.


(6)		Represents pro forma non-cash compensation expense related to the vesting of incentive awards granted under our 2013 Equity Incentive Plan.
(7)		Represents pro forma non-cash amortization of financing costs for the 12 months ended June 30, 2013.
(8)		Reflects contractual leasing commissions for the 12 months ending June 30, 2014 based on new and renewal leases entered into through , 2013. Does not include obligations for customer improvements estimated at $ million for the 12 months ending June 30, 2014, which are expected to be funded from borrowings.
(9)		For the 12 months ending June 30, 2014, our estimate of the costs of recurring capital expenditures (excluding customer improvements and leasing commissions) is approximately $ million, based on the average annual capital expenditures cost of $ per net rentable square foot incurred during 2010, 2011 and 2012 and for the six months ended June 30, 2013, multiplied by the average total operating NRSF in our portfolio during the period. The following table sets forth certain information regarding historical recurring capital expenditures at the properties in our portfolio through June 30, 2013 (in millions):

Year Ended December 31,

Six Months
Ended
June 30,

Weighted Average
January 1, 2010 -
June 30, 2013

2010

2011

2012

2013

Recurring capital expenditures (excluding customer improvements and leasing commissions)

Average total operating NRSF during period (square feet)

Total estimated recurring capital expenditures (per square foot)


(10)		Represents scheduled amortization payments of capital lease obligations and other long-term lease obligations due during the 12 months ending June 30, 2014.
(11)		Represents our share of estimated cash available for distribution and estimated initial annual cash distributions to our stockholders is based on an estimated approximate % aggregate partnership interest in our operating partnership.
(12)		Based on a total of shares of Class A common stock to be outstanding after this offering, consisting of shares to be sold in this offering (assuming no exercise of the underwriters’ option to purchase additional shares), shares of common stock issued to our continuing investors in connection with our formation transactions, restricted shares of common stock to be issued to certain of our directors, executive officers and employees upon completion of this offering and shares of Class B common stock issued in connection with our formation transactions.
(13)		Calculated as an estimated initial annual distribution per share divided by our share of estimated cash available for distribution per share for the 12 months ending June 30, 2014.

CAPITALIZATION

The following table sets forth the historical capitalization of our predecessor as of June 30, 2013 and our capitalization as of June 30, 2013 on a pro forma basis, giving effect to (i) the formation transactions, (ii) this offering and (iii) the use of the net proceeds from this offering as described in “Use of Proceeds.” You should read this table in conjunction with “Use of Proceeds,” “Selected Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our predecessor’s consolidated financial statements and the notes to our predecessor’s financial statements appearing elsewhere in this prospectus.


	June 30, 2013
	Historical (unaudited)		Pro Forma
	($ in thousands except per share amounts)
Debt:
Mortgages notes payable	$	89,903	$	89,903
Unsecured revolving credit facility		244,000		—
Unsecured term loan		225,000		225,000
Capital lease obligations		2,163		2,163
Stockholders’ Equity:
Preferred shares, $0.01 par value per share, shares authorized, no shares issued and outstanding, as adjusted		—		—
Class A common stock, $0.01 par value per share, shares authorized and shares issued and outstanding, as adjusted(1)		—
Class B common stock, $0.01 par value per share, shares authorized and shares issued and outstanding, as adjusted(2)		—
Additional paid in capital		—
Partners’ capital		129,380		—

Total QTS Realty Trust, Inc. stockholders equity		—
Noncontrolling interest		—
Total equity	$	129,380	$

Total capitalization	$	690,446	$

(1)

Pro forma outstanding Class A common stock includes (i) shares of Class A common stock to be sold by us in this offering, (ii) shares of Class A common stock issued to our continuing investors in connection with our formation transactions and (iii) shares of Class A common stock, including restricted shares (based on the mid-point of the price range set forth on the cover of this prospectus), to be issued upon completion of this offering to certain directors, executive officers and employees. Amount excludes (i) additional shares of Class A common stock issuable upon exercise of the underwriters’ option to purchase additional shares, (ii) options to acquire shares of Class A common stock to be issued upon completion of this offering to certain directors, executive officers and employees and (iii) additional shares of Class A common stock reserved for future issuance under our equity incentive plan, upon redemption of OP units, in exchange for Class B common stock and upon conversion of outstanding LTIP units.

(2)	Pro forma outstanding Class B common stock includes shares of Class B common stock issued in connection with our formation transactions.

DILUTION

Dilution After This Offering

Purchasers of our Class A common stock offered by this prospectus will experience an immediate and substantial dilution of the net tangible book value of our Class A common stock from the assumed initial public offering price at the mid-point of the price range set forth on the cover of this prospectus. Net tangible book value per share represents the amount of total tangible assets less total liabilities, divided by the number of outstanding shares of common stock, assuming the conversion of LTIP units into OP Units, the exchange of OP units into shares of our Class A common stock on a one-for-one basis and the conversion of shares of our Class B common stock into shares of our Class A common stock on a one-for-one basis. At June 30, 2013, our predecessor had a net tangible book value of approximately $121.7 million, or $ per share of common stock held by continuing investors. After giving effect to the sale of our common stock by us in this offering, the application of aggregate net proceeds received by us from the offering and completion of the formation transactions, the pro forma net tangible book value as of June 30, 2013 attributable to common stockholders would have been $ million, or $ per share of common stock. This amount represents an immediate increase in net tangible book value of $ per share to our continuing investors and an immediate dilution in pro forma net tangible book value of $ per share from the public offering price of $ per share of common stock to our new investors. The following table illustrates this per share dilution.


Assumed initial public offering price per share at the mid-point of the price range set forth on the cover of this prospectus		$
Net tangible book value per share of our predecessor as of June 30, 2013, before the formation transactions and this offering(1)	$
Net increase in net tangible book value per share attributable to the formation transactions, but before this offering	$
Pro forma net tangible book value per share after the formation transactions, but before this offering	$
Increase in pro forma net tangible book value per share attributable to this offering(2)	$
Pro forma net tangible book value per share after the formation transactions and this offering(3)		$
Dilution in pro forma net tangible book value per share to new investors(4)		$

(1)

Net tangible book value per share of our predecessor as of June 30, 2013 before the formation transactions and this offering was determined by dividing the net tangible book value of our predecessor as of June 30, 2013 by the number of shares of common stock and OP units held by continuing investors immediately prior to this offering.

(2)

The increase in pro forma net tangible book value per share attributable to this offering was determined by subtracting the pro forma net tangible book value per share after the formation transactions, but before this offering, from the pro forma net tangible book value per share after the formation transactions and this offering.

(3)

The pro forma net tangible book value per share after the formation transactions and this offering was determined by dividing net tangible book value of approximately $ million by shares of common stock and OP units to be outstanding after this offering, which amount excludes the shares and the related proceeds that may be issued by us upon exercise of the underwriters’ option to purchase additional shares and additional common stock reserved for future issuance under our equity incentive plan.

(4)

The dilution in pro forma net tangible book value per share to new investors was determined by subtracting pro forma net tangible book value per share after the formation transactions and this offering from the assumed initial public offering price paid by a new investor for our common stock. For the purpose of calculating our predecessor’s pro forma book values, we have assumed that, as of June 30, 2013, the common stock and OP units to be issued as part of the formation transactions were outstanding as of such date.

Assuming the underwriters exercise their option to purchase additional shares of Class A common stock in full, our net tangible book value at June 30, 2013 would have been $ million, or $ per share of Class A common stock. This represents an immediate dilution in pro forma net tangible book value of $ per share of Class A common stock to our new investors.

Differences Between New Investors and Continuing Investors

The table below summarizes, as of June 30, 2013, on a pro forma basis after giving effect to the formation transactions, the related financing transactions and this offering, the differences between the number of shares of Class A common stock and OP Units to be received by the continuing investors in connection with the formation transactions and the new investors purchasing shares in this offering, the total consideration paid and the average price per share of Class A common stock or OP unit paid by the continuing investors in connection with the formation transactions and paid in cash by the new investors purchasing shares in this offering (based on the net tangible book value attributable to the existing investors in the formation transactions). In calculating the shares to be issued in this offering, we used an assumed initial public offering price of $ per share, which is the mid-point of the price range set forth on the front cover page of this prospectus.


	Class A Common Stock/OP Units Issued/Granted			Pro Forma Net Tangible Book Value of Contribution/Cash(1)			Average Price Per Share
	Number	Percentage		Amount	Percentage		Average Price Per Share
Continuing investors(2)			%	$		%	$
New investors			%			%	$



Total			%	$		100.0%

(1)	Represents pro forma net tangible book value as of June 30, 2013 of the initial operating properties after giving effect to the formation transactions, the related financing transactions and this offering (but prior to deducting the estimated costs of this offering).

(2)

Includes OP units to be issued in connection with the formation transactions and an aggregate of shares of Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) to be granted to certain of our directors, executive officers and employees concurrently with the completion of this offering.

SELECTED FINANCIAL DATA

The following table sets forth selected financial data on an historical basis for QualityTech, LP, which is our predecessor. We have not presented historical data for QTS Realty Trust, Inc. because we have not had any corporate activity since our formation other than the issuance of shares of common stock in connection with our initial capitalization and activity in connection with this offering. Accordingly, we do not believe that a discussion of the historical results of QTS Realty Trust, Inc. would be meaningful. Prior to or concurrently with the completion of this offering, we will consummate a series of transactions pursuant to which we will become the sole general partner and majority owner of our predecessor, which then will be our operating partnership, and thereby indirectly acquire the properties and data center business described in this prospectus. We refer to these transactions as our “formation transactions.” Substantially all of our assets will be held by, and our operations will be conducted through, our operating partnership. We will contribute the net proceeds received by us from this offering to our operating partnership in exchange for OP units. For more information regarding our predecessor and the formation transactions, please see “Structure and Formation of Our Company.”

The historical financial data as of December 31, 2012 and 2011 and for each of the years ended December 31, 2012, 2011 and 2010 has been derived from our predecessor’s audited financial statements included elsewhere in this prospectus. The historical balance sheet as of December 31, 2010 has been derived from our predecessor’s audited financial statements not otherwise included in this prospectus. The historical financial data as of June 30, 2013 and for each of the six months ended June 30, 2013 and 2012 has been derived from our predecessor’s unaudited financial statements included elsewhere in this prospectus and includes all adjustments that management considers necessary to present fairly the information set forth therein. The historical financial data for our predecessor is not necessarily indicative of our results of operations, cash flows or financial condition following the completion of this offering and our formation transactions.

The following table sets forth selected financial and operating data on a pro forma and a consolidated historical basis for our predecessor. You should read the following selected financial data in conjunction with our pro forma financial statements, our predecessor’s historical consolidated financial statements, the combined statements of revenues and certain operating expenses of our Sacramento data center and, in each case, the related notes thereto, along with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are included elsewhere in this prospectus.


	Six Months Ended June 30, (unaudited)									Year Ended December 31,
	Pro Forma 2013			2013			2012			Pro Forma 2012 (unaudited)			2012			2011			2010
	($ in thousands)
Statement of Operations Data
Revenues:
Rental	$	68,589		$	68,589		$	59,516		$	131,135		$	120,758		$	104,051		$	92,800
Recoveries from customers		6,322			6,322			4,489			10,613			9,294			12,154			12,506
Cloud and managed services		8,435			8,435			6,883			14,497			14,497			12,173			9,054
Other		1,092			1,092			444			1,385			1,210			2,018			5,795

Total revenues		84,438			84,438			71,332			157,630			145,759			130,396			120,155

Operating expenses
Property operating costs		29,292			29,292			25,556			56,993			51,506			57,900			60,408
Real estate taxes and insurance		2,203			2,203			1,525			4,304			3,632			2,621			2,378
Depreciation and amortization		22,061			22,061			16,394			39,438			34,932			26,165			19,086
General and administrative		19,290			19,290			17,187			36,610			35,986			28,470			22,844
Transaction costs		—			—			—			897			897			—			—
Gain on legal settlement		—			—			—			—			—			(3,357	)		—
Restructuring charge		—			—			3,291			3,291			3,291			—			—

Total operating expenses		72,846			72,846			63,953			141,533			130,244			111,799			104,716

Operating income		11,592			11,592			7,379			16,097			15,515			18,597			15,439
Other income and expense:
Interest income		13			13			46			69			61			71			233
Interest expense		(4,459	)		(11,634	)		(12,393	)		(10,105	)		(25,140	)		(19,713	)		(23,502	)
Other (expense) income, net		—			(3,277	)		(1,434	)		(1,153	)		(1,151	)		136			22,214

Income (loss) before gain on sale of real estate		7,146			(3,306	)		(6,402	)		4,908			(10,715	)		(909	)		14,384
Gain on sale of real estate		—			—			—			948			948			—			—

Net income (loss)	$	7,146		$	(3,306	)	$	(6,402	)	$	5,856		$	(9,767	)	$	(909	)	$	14,384

Other Data (unaudited)
FFO(1)	$	26,763		$	16,311		$	8,753		$	39,931		$	20,253		$	23,047		$	31,771
Operating FFO(1)		26,763			19,588			13,171			45,246			25,568			13,900			2,456
Recognized MRR (in the period)(2)		73,785			73,785			63,188			141,151			128,533			108,942			98,832
MRR (at period end)(2)		12,743			12,743			11,021			11,857			11,857			9,898			9,138
NOI(3)		52,943			52,943			44,251			96,614			90,904			70,011			57,369
EBITDA(4)		33,653			30,376			22,339			55,330			50,244			44,898			56,739
Adjusted EBITDA(4)		34,448			34,448			27,253			60,416			55,330			42,306			34,857


	As of June 30, (unaudited)						As of December 31,
	Pro Forma 2013		2013		2012		Pro Forma 2012 (unaudited)		2012		2011		2010
	($ in thousands)
Balance Sheet Data
Real estate at cost*		$821,336		$821,336		$606,295		N/A		$734,828		$555,586		$432,233
Real estate assets, net**		701,760		701,760		518,357		N/A		631,928		481,050		379,967
Total assets		788,247		758,432		558,539		N/A		685,443		521,056		412,964
Credit facility and mortgages payable		314,903		558,903		461,136		N/A		487,791		407,906		302,765

*	Reflects undepreciated cost of real estate assets and does not include real estate intangible assets acquired in connection with acquisitions.

**	Real estate assets, net includes building and improvements (net of accumulated depreciation), land and construction in progress.


	Six Months Ended June 30, (unaudited)								Year Ended December 31,
	Pro Forma 2013		2013			2012			Pro Forma 2012 (unaudited)		2012			2011			2010
	($ in thousands)
Cash Flow Data
Cash flow provided by (used for):
Operating activities	$	N/A	$	19,990		$	20,683		$	N/A	$	35,098		$	24,374		$	13,277
Investing activities		N/A		(86,526	)		(66,503	)		N/A		(194,927	)		(118,746	)		(56,574	)
Financing activities		N/A		63,004			44,139			N/A		160,719			94,669			5,610

(1)

A reconciliation of net income (loss) to FFO and Operating FFO is presented below:


	Six Months Ended June 30, (unaudited)								Year Ended December 31, (unaudited)
	Pro Forma 2013		2013			2012			Pro Forma 2012			2012			2011			2010
	($ in thousands)
FFO
Net income (loss)	$	7,146	$	(3,306	)	$	(6,402	)	$	5,856		$	(9,767	)	$	(909	)	$	14,384
Real estate depreciation and amortizaton		19,617		19,617			15,155			35,023			30,968			23,956			17,387
Gain on sale of real estate		—		—			—			(948	)		(948	)		—			—

FFO		26,763		16,311			8,753			39,931			20,253			23,047			31,771

Operating FFO
Restructuring charge		—		—			3,291			3,291			3,291			—			—
Write off of unamortized deferred financing costs		—		3,277			1,434			1,434			1,434			—			—
Gain on legal settlement		—		—			—			—			—			(3,357	)		—
Transaction costs		—		—			—			897			897			—			—
Intangible revenue		—		—			—			—			—			(960	)		(4,844	)
Gain on extinguishment of debt		—		—			—			—			—			—			(22,214	)
Unrealized gain on derivatives		—		—			(307	)		(307	)		(307	)		(4,830	)		(2,257	)

Operating FFO	$	26,763	$	19,588		$	13,171		$	45,246		$	25,568		$	13,900		$	2,456

(2)

We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases (which represent customer leases that have been executed but for which lease payments have not commenced) as of a particular date, unless otherwise specifically noted. We calculate recognized MRR as the recurring revenue recognized during a given period, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. Management uses MRR and recognized MRR as supplemental performance measures because they provide a useful measure of increases in contractual revenue from our customer leases. A reconciliation of total revenues to recognized MRR in the period and MRR at period-end is presented below:


		Six Months Ended June 30, (unaudited)									Year Ended December 31, (unaudited)
		Pro Forma 2013			2013			2012			Pro Forma 2012			2012			2011			2010
		($ in thousands)
Recognized MRR
Total period revenues (GAAP basis)		$	84,438		$	84,438		$	71,332		$	157,630		$	145,759		$	130,396		$	120,155
Less:	Total period recoveries		(6,322	)		(6,322	)		(4,489	)		(10,613	)		(9,294	)		(12,154	)		(12,506	)
	Total period deferred set-up fees		(2,188	)		(2,188	)		(1,862	)		(4,481	)		(4,317	)		(2,997	)		(2,710	)
	Total period other		(2,143	)		(2,143	)		(1,793	)		(1,385	)		(3,615	)		(6,303	)		(6,107	)

Recognized MRR (in the period)		$	73,785		$	73,785		$	63,188		$	141,151		$	128,533		$	108,942		$	98,832


MRR
Total period revenues (GAAP basis)		$	84,438		$	84,438		$	71,332		$	157,630		$	145,759		$	130,396		$	120,155
Less:	Total revenues excluding last month		(69,802	)		(69,802	)		(59,008	)		(143,157	)		(132,338	)		(119,156	)		(109,497	)

Total revenues for last month of period			14,636			14,636			12,324			14,473			13,421			11,240			10,658
Less:	Last month recoveries		(1,224	)		(1,224	)		(775	)		(981	)		(879	)		(897	)		(1,175	)
	Last month deferred set-up fees		(391	)		(391	)		(352	)		(455	)		(441	)		(278	)		(195	)
	Last month other plus adjustments for period end		(278	)		(278	)		(176	)		(1,180	)		(244	)		(167	)		(150	)

MRR (at period end)*		$	12,743		$	12,743		$	11,021		$	11,857		$	11,857		$	9,898		$	9,138

*	Does not include our booked-not-billed MRR balance, which was $2.3 million and $1.2 million as of June 30, 2013 and 2012, respectively, and $1.1 million, $1.0 million and $1.0 million as of December 31, 2012, 2011, and 2010, respectively.

(3)


	Six Months Ended June 30, (unaudited)									Year Ended December 31, (unaudited)
	Pro Forma 2013			2013			2012			Pro Forma 2012			2012			2011			2010
	($ in thousands)
Net Operating Income (NOI)
Net income (loss)	$	7,146		$	(3,306	)	$	(6,402	)	$	5,856		$	(9,767	)	$	(909	)	$	14,384
Interest expense		4,459			11,634			12,393			10,105			25,140			19,713			23,502
Interest income		(13	)		(13	)		(46	)		(69	)		(61	)		(71	)		(233	)
Depreciation and amortization		22,061			22,061			16,394			39,438			34,932			26,165			19,086
Write off of unamortized deferred financing costs		—			3,277			1,434			1,434			1,434			—			—
Gain on extinguishment of debt		—			—			—			—			—			—			(22,214	)
Transaction costs		—			—			—			897			897			—			—
Gain on legal settlement		—			—			—			—			—			(3,357	)		—
Gain on sale of real estate		—			—			—			(948	)		(948	)		—			—
Restructuring charge		—			—			3,291			3,291			3,291			—			—
General and administrative expenses		19,290			19,290			17,187			36,610			35,986			28,470			22,844

NOI	$	52,943		$	52,943		$	44,251		$	96,614		$	90,904		$	70,011		$	57,369

Breakdown of NOI by Facility:
Atlanta Metro data center	$	25,000		$	25,000		$	20,048		$	42,787		$	42,787		$	29,712		$	26,595
Suwanee data center		13,428			13,428			16,766			30,471			30,471			32,258			28,508
Santa Clara data center		5,498			5,498			5,550			11,183			11,183			9,672			7,291
Richmond data centers		4,679			4,679			2,116			6,094			6,094			267			—
Other data centers		4,338			4,338			(229	)		6,079			369			(1,898	)		(5,025	)

NOI	$	52,943		$	52,943		$	44,251		$	96,614		$	90,904		$	70,011		$	57,369

(4)

A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA is presented below:


	Six Months Ended June 30, (unaudited)									Year Ended December 31, (unaudited)
	Pro Forma 2013			2013			2012			Pro Forma 2012			2012			2011			2010
	($ in thousands)
EBITDA
Net income (loss)	$	7,146		$	(3,306	)	$	(6,402	)	$	5,856		$	(9,767	)	$	(909	)	$	14,384
Interest expense		4,459			11,634			12,393			10,105			25,140			19,713			23,502
Interest income		(13	)		(13	)		(46	)		(69	)		(61	)		(71	)		(233	)
Depreciation and amortization		22,061			22,061			16,394			39,438			34,932			26,165			19,086

EBITDA		33,653			30,376			22,339			55,330			50,244			44,898			56,739

Adjusted EBITDA
Write off of unamortized deferred financing costs		—			3,277			1,434			1,434			1,434			—			—
Gain on extinguishment of debt		—			—			—			—			—			—			(22,214	)
Transaction costs		—			—			—			897			897			—			—
Equity-based compensation expense		795			795			189			412			412			765			332
Gain on legal settlement		—			—			—			—			—			(3,357	)		—
Gain on sale of real estate		—			—			—			(948	)		(948	)		—			—
Restructuring charge		—			—			3,291			3,291			3,291			—			—

Adjusted EBITDA	$	34,448		$	34,448		$	27,253		$	60,416		$	55,330		$	42,306		$	34,857

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our predecessor’s consolidated financial statements, our pro forma financial statements and the combined statements of revenues and certain operating expenses of our Sacramento data center, and, in each case, the related notes, included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our business and growth strategies, statements regarding the industry outlook, our expectations regarding the future performance of our business and the other non-historical statements contained herein are forward-looking statements. See “Special Note Regarding Forward-Looking Statements.” You should also review the “Risk Factors” section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by such forward-looking statements.

Overview

We are a leading owner, developer and operator of state-of-the-art, carrier-neutral, multi-tenant data centers. Our data centers are facilities that house the network and computer equipment of multiple customers and provide access to a range of communications carriers. We have a fully integrated platform through which we own and operate our data centers and provide a broad range of IT infrastructure solutions. We refer to our spectrum of core data center products as our “3Cs,” which consists of Custom Data Center, Colocation and Cloud and Managed Services. We believe that we own and operate one of the largest portfolios of multi-tenant data centers in the United States, as measured by gross square footage, and have the capacity to almost triple our leased raised floor without constructing or acquiring any new buildings.

We operate a portfolio of 10 data centers across seven states, located in some of the top U.S. data center markets plus other high-growth markets. Our data centers are highly specialized, full-service, mission-critical facilities used by our customers to house, power and cool the networking equipment and computer systems that support their most critical business processes. We believe that our data centers are best-in-class and engineered to among the highest specifications commercially available to customers, providing fully redundant, high-density power and cooling sufficient to meet the needs of major national and international companies and organizations. This is in part reflected by our operating track record of “five-nines” (99.999%) reliability and by our diverse customer base of more than 870 customers, including financial institutions, healthcare companies, government agencies, communications service providers, software companies and global Internet companies.

Our data center portfolio contains approximately 3.8 million gross square feet of space (approximately 92% of which is wholly owned by us), including approximately 1.8 million “basis-of-design” raised floor square feet, which represents the total data center raised floor potential of our existing data center facilities. This represents the maximum amount of space in our existing buildings that could be leased following full build-out, depending on the configuration that we deploy. As of June 30, 2013, this space included approximately 714,000 raised floor operating net rentable square feet, or NRSF, plus approximately 1.1 million square feet of additional raised floor in our development pipeline, of which approximately 312,000 NRSF is expected to become operational by June 30, 2016. Our facilities collectively have access to over 500 MW of gross utility power with 390 MW of available utility power. We believe such access to power gives us a competitive advantage in redeveloping data center space, since access to power is usually the most limiting and expensive component in data center redevelopment. As of June 30, 2013, our properties were approximately 81% leased based on our leasable raised floor of approximately 523,000 square feet. Of the approximately 99,000 square feet of raised floor available for lease as of June 30, 2013, approximately 45,000 square

feet became leasable during the prior three months. As of June 30, 2013, we had signed leases for over 23,000 square feet that had not yet commenced.

We are a Maryland corporation formed on May 17, 2013 and will not have any operating activity until the consummation of this offering. Accordingly, we do not believe that a discussion of the historical results of QTS Realty Trust, Inc. would be meaningful, and we have therefore set forth below a discussion and analysis regarding the historical operations of our predecessor only. QualityTech, LP, our operating partnership and predecessor, was formed as a Delaware limited partnership in August 2009. Prior to or concurrently with the completion of this offering, we will consummate a series of transactions pursuant to which we will become the sole general partner and majority owner of our predecessor, which then will be our operating partnership, and thereby indirectly will acquire the properties and data center business described in this prospectus. Upon completion of this offering and the formation transactions, substantially all of our assets will be held by, and our operations conducted through, our operating partnership, of which we will serve as general partner and own approximately %. We will contribute the net proceeds received by us from this offering to our operating partnership in exchange for OP units therein. For more information regarding our predecessor and the formation transactions, please see “Structure and Formation of Our Company.”

We expect to qualify as a REIT for federal income tax purposes beginning with our taxable year ending December 31, 2013. Our predecessor has been operating in compliance with the rules applicable to REITs since it partnered with General Atlantic in 2009.

Our Customer Base

We provide data center solutions to a diverse set of customers. Our customer base is comprised of companies of all sizes representing an array of industries, each with unique and varied business models and needs. We serve Fortune 1000 companies as well as small and medium businesses, or SMBs, including financial institutions, healthcare companies, government agencies, communications service providers, software companies and global Internet companies. As of June 30, 2013 and including our booked-not-billed MRR balance as of that date, Fortune 1000 and equivalently sized private and/or foreign companies accounted for approximately 57% of our MRR balance. Additionally, our customers include six of the top ten Fortune 500 telecommunications companies and three of the top fifteen Forbes Global 2000 technology companies.

Our Custom Data Center, or C1, customers typically are large enterprises with significant IT expertise and specific IT requirements, including financial institutions, “Big Four” accounting firms and the world’s largest global Internet companies. Our Colocation, or C2, customers consist of a wide range of organizations, including major healthcare, telecommunications and software and web-based companies. Our C3 Cloud customers include both large organizations and SMBs seeking to reduce their capital expenditures and outsource their IT infrastructure on a flexible basis. Examples of current C3 Cloud customers include a global financial processing company, a U.S. government agency and an educational software provider.

As a result of our diverse customer base, customer concentration in our portfolio is limited. As of June 30, 2013, only three of our more than 870 customers individually accounted for more than 3% of our MRR, with no single customer accounting for more than 8% of our MRR. In addition, approximately 39% of our MRR was attributable to customers who use more than one of our 3Cs products.

Key Operating Metrics

The following sets forth definitions for our key operating metrics. These metrics may differ from similar definitions used by other companies.

Monthly Recurring Revenue (“MRR”). We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted.

Annualized Rent . We define annualized rent as MRR multiplied by 12.

Rental Churn . We define rental churn as the MRR impact from a customer completely departing our platform in a given period compared to the total MRR at the beginning of the period.

Leasable Raised Floor. We define leasable raised floor as the amount of raised floor square footage that we have leased plus the available capacity of raised floor square footage that is in a leasable format as of a particular date and according to a particular product configuration. The amount of our leasable raised floor may change even without completion of new redevelopment projects due to changes in our configuration of C1, C2 and C3 product space.

Percentage (%) Leased Raised Floor. We define percentage leased raised floor as the square footage that is subject to a signed lease for which billing has commenced as of a particular date compared to leasable raised floor as of that date, expressed as a percentage.

Booked-not-Billed. We define booked-not-billed as our customer leases that have been signed, but for which lease payments have not yet commenced.

Factors That May Influence Future Results of Operations and Cash Flows

Revenue. Our revenue growth will depend on our ability to maintain the historical occupancy rates of leasable raised floor, lease currently available space, lease new capacity that becomes available as a result of our development and redevelopment activities, attract new customers and continue to meet the ongoing technological requirements of our customers. As of June 30, 2013, we had in place customer leases generating revenue for approximately 81% of our leasable raised floor. Our ability to grow revenue also will be affected by our ability to maintain or increase rental, cloud and managed services rates at our properties. Future economic downturns, regional downturns or downturns in the technology industry could impair our ability to attract new customers or renew existing customers’ leases on favorable terms, or at all, and could adversely affect our customers’ ability to meet their obligations to us. Negative trends in one or more of these factors could adversely affect our revenue in future periods, which would impact our results of operations and cash flows. We also at times elect to reclaim space from customers in a negotiated transaction where we believe that we can redevelop and/or re-lease that space at higher rates, which may cause a decrease in revenue until the space is re-leased.

Leasing Arrangements. As of June 30, 2013, 79% of our leased raised floor was leased to customers with separately metered power. Under the metered power model, the customer pays us a fixed monthly rent amount, plus reimbursement of certain other operating costs, including actual costs of sub-metered electricity used to power its data center equipment and an estimate of costs for electricity used to power supporting infrastructure for the data center, expressed as a factor of the customer’s actual electricity usage. Fluctuations in our customers’ utilization of power and the supplier pricing of power do not significantly impact our results of operations or cash flows under the metered power model. These leases generally have a minimum term of five years and are typically employed for our C1 product. As of June 30, 2013, 21% of our leased raised floor was leased to customers on a gross lease basis. Under a gross lease, the customer pays us a fixed rent on a monthly basis, and does not separately reimburse us for operating costs, including utilities, maintenance, repair, property

taxes and insurance, as reimbursement for these costs is factored into MRR. However, if customers access more utility costs than their leases permit, we are able to charge these customers for overages. For leases under the gross lease model, fluctuations in our customers’ utilization of power and the prices our utility providers charge us will impact our results of operations and cash flows. Our leases on a gross lease basis generally have a term of three years or less.

Scheduled Lease Expirations. Our ability to minimize rental churn and customer downgrades at renewal and renew, lease and re-lease expiring space will impact our results of operations and cash flows. Leases representing approximately 15% and 11% of our total leased raised floor are scheduled to expire during the years ending December 31, 2013 (including all month-to-month leases) and 2014, respectively. These leases also represented approximately 21% and 23%, respectively, of our annualized rent as of June 30, 2013. At expiration, as a general matter, based on current market conditions, we expect that expiring rents will be at or below the then-current market rents.

Acquisitions, Redevelopment and Financing. Our revenue growth also will depend on our ability to acquire and redevelop and subsequently lease data center space at favorable rates. As of June 30, 2013, we had approximately 1.1 million square feet of additional raised floor in our redevelopment pipeline, of which approximately 205,000 NRSF of raised floor is expected to become operational by June 30, 2014 and an additional approximately 107,000 NRSF of raised floor is expected to become operational between June 30, 2014 and June 30, 2016.

We generally fund the cost of data center acquisition and redevelopment from capital which we would expect to obtain primarily through our net cash provided by operations, credit facilities, other unsecured and secured borrowings or the issuance of additional equity. We believe that we have sufficient access to capital from our current cash and cash equivalents balance, the expected net proceeds of this offering and borrowings under our credit facilities to fund our redevelopment projects scheduled to become operational by June 30, 2016.

Operating Expenses . Our operating expenses generally consist of direct personnel costs, utilities, property and ad valorem taxes, insurance and site maintenance costs and rental expenses on our ground and building leases. In particular, our buildings require significant power to support the data center operations conducted in them. Although substantially all of our long-term leases—leases with a term greater than three years—contain reimbursements for certain operating expenses, we will not in all instances be reimbursed for all of our property operating expenses incurred. We also incur general and administrative expenses, including expenses relating to senior management, our in-house sales and marketing organization, cloud and managed services support personnel and legal, human resources, accounting and other expenses related to professional services. We also will incur additional expenses arising from our becoming a publicly traded company, which we expect to range between $ million to $ million annually, excluding employee equity-based compensation. Increases or decreases in our operating expenses will impact our results of operations and cash flows. We expect to incur additional operating expenses as we continue to expand.

General Leasing Activity

Our leasing activity for the six months ended June 30, 2013 and the year ended December 31, 2013, 2012 and 2011 is summarized below:


	Six Months Ended June 30, 2013			Year Ended December 31,
	Six Months Ended June 30, 2013			2012			2011			2010
	($ in thousands)
Leasing activity:
Incremental MRR booked from new customers	$	782		$	1,380		$	1,318		$	1,739
Incremental MRR booked from existing customer upgrades, net of downgrades		1,394			1,338			797			430

Total incremental MRR		2,176			2,718			2,115			2,169
Total incremental annualized rent		26,112			32,616			25,380			26,028
Leasing commissions related to new leasing activity		5,646			6,085			5,896			4,175
Rental churn rate(1)		1.5	%		7.7	%		11.6	%		7.1	%

(1)	The rental churn rate for the three months ended June 30, 2013 and March 31, 2013 was 0.8% and 0.7%, respectively.

With respect to leasing activity during the six months ended June 30, 2013, C1 customers signed leases at an average annualized rental rate of $163 per square foot, and C2 and C3 customers signed leases at an average annualized rental rate of $735 per square foot.

As of June 30, 2013, our booked-not-billed MRR balance was approximately $2.3 million, of which approximately $0.8 million was from new customers and approximately $1.5 million was from existing customers. Of this booked-not-billed MRR balance, leases representing approximately $1.1 million of MRR are scheduled to commence in 2013, $0.7 million are scheduled to commence in 2014 and $0.5 million are scheduled to commence in 2015 and thereafter. The annualized rent from our total booked-not-billed MRR balance was approximately $28.1 million.

Results of Operations

Three Months Ended June 30, 2013 Compared to Three Months Ended June 30, 2012

Changes in revenues and expenses for the three months ended June 30, 2013 compared to the three months ended June 30, 2012 are summarized below:


	Three Months Ended June 30, (unaudited)
	2013			2012			$ Change			% Change
	($ in thousands)
Revenues:
Rental	$	34,783		$	30,725		$	4,058			13	%
Recoveries from customers		3,456			2,283			1,173			51	%
Cloud and managed services		4,325			3,459			866			25	%
Other		376			222			154			69	%

Total revenues		42,940			36,689			6,251			17	%

Operating expenses:
Property operating costs		14,884			12,441			2,443			20	%
Real estate taxes and insurance		1,090			762			328			43	%
Depreciation and amortization		11,246			8,643			2,603			30	%
General and administrative		9,696			8,829			867			10	%

Total operating expenses		36,916			30,675			6,241			20	%

Operating income		6,024			6,014			10			0	%
Other income and expense:
Interest income		7			11			(4	)		-36	%
Interest expense		(5,084	)		(6,291	)		1,207			-19	%
Other expense, net		(2,179	)		—			(2,179	)		*

Net income (loss)	$	(1,232	)	$	(266	)	$	(966	)		363	%

* not applicable for comparison

Revenues. Total revenues for the three months ended June 30, 2013 were $42.9 million compared to total revenues of $36.7 million for the three months ended June 30, 2012. The increase of $6.3 million, or 17%, was primarily due to organic growth in our customer base and the acquisition of our Sacramento data center in December 2012. The increase of $4.9 million, or 14%, in combined rental and cloud and managed services revenue was primarily due to a $2.0 million increase related to newly leased space as well as increases in rents from previously leased space, net of downgrades at renewal and rental churn. Additionally, the acquisition of our Sacramento data center contributed approximately $2.9 million of combined rental and cloud and managed services revenues for the three months ended June 30, 2013.

The impact from customer downgrades in our combined rental and cloud and managed services revenues for the three months ended June 30, 2013 included the downgrade associated with our reclaiming of approximately 80,000 square feet of raised floor at our Suwanee facility in July 2012 from a C1 customer that generated $1.6 million in rental revenues for the three months ended June 30, 2012. This customer was underutilizing a portion of its space and power at both our Atlanta Metro and Suwanee data centers. As a result, we renegotiated our lease arrangement with this customer to reclaim in the fourth quarter of 2013 an additional 60,500 square feet of raised floor that it is currently occupying in our Atlanta Metro data center. As part of this renegotiation, we extended the term on this customer’s remaining approximately 58,000 square feet in our Atlanta Metro data center for an additional five years at a 72% higher rental rate per square foot. The net impact of reclaiming the

portion of this customer’s space in our Atlanta Metro data center and the higher rental rate per square foot on the remaining space will be a reduction of MRR of $0.1 million starting in the fourth quarter of 2013.

The redevelopment of the approximately 80,000 square feet that we reclaimed in our Suwanee facility was substantially completed during the second quarter of 2013 and will accommodate both our C1 and C2 data center products. As of June 30, 2013, we had re-leased approximately 13,500 square feet of this space at a total rental amount of just under 50% of the rent the prior customer had been paying for the entire 80,000 square feet of space. We started billing for this space in July 2013. With regard to the space this customer will vacate in our Atlanta Metro facility, we have re-leased approximately 84% of the space to an existing customer at a higher rental rate per square foot. We expect that this new lease will generate $0.5 million of MRR, the first portion of which will commence billing in January 2014.

As of June 30, 2013, our data centers were 81% leased based on leasable raised floor of approximately 523,000 square feet, with an average annualized rent of $361 per leased raised floor square foot including cloud and managed services revenue, or $321 per leased raised floor square foot excluding cloud and managed services revenue. As of June 30, 2013, our C1 product average annualized rent was $177 per leased raised floor square foot and our C2 product, including managed services, average annualized rent was $1,041 per leased raised floor square foot. As of June 30, 2012, our data centers were 89% leased based on leasable raised floor of approximately 525,000 square feet, with an average annualized rent of $285 per leased raised floor square foot including cloud and managed services revenue, or $253 per leased raised floor square foot excluding cloud and managed services revenue. As of June 30, 2012, our C1 product average annualized rent was $144 per leased raised floor square foot and our C2 product, including managed services, average annualized rent was $947 per leased raised floor square foot. The decrease in leasable raised floor is primarily related to reductions associated with the redevelopment of space reclaimed from a C1 customer in our Suwanee facility to accommodate both C1 and C2 customers, partially offset by increases in leasable raised floor associated with the acquisition of our Sacramento data center facility (approximately 32,000 leasable raised floor square feet as of June 30, 2013) and the addition of raised floor square footage from our redevelopment activities. The increase in average annualized rent per leased raised floor square foot is related to the reclaiming of 80,000 square feet in our Suwanee facility, which had been leased at a rental rate significantly below our average rental rate, as described above, the acquisition of our Sacramento data center facility, which included a large amount of C2 customers, and the ongoing lease-up of redeveloped space at our Atlanta Metro and Richmond data centers at current market rates.

Higher recoveries from customers for the three months ended June 30, 2013 compared to the three months ended June 30, 2012 were primarily due to increased utility rates at our Atlanta Metro data center, which contributed $0.7 million to the increase, and the acquisition of our Sacramento data center, which contributed $0.4 million to the increase. The $0.2 million increase in other revenue for the three months ended June 30, 2013 compared to the three months ended June 30, 2012 was due to the higher sales of scrap metals and other unused materials and higher straight line rent, partially offset by higher discounts.

Property Operating Costs. Property operating costs for the three months ended June 30, 2013 were $14.9 million compared to property operating costs of $12.4 million for the three months ended June 30, 2012, an increase of $2.4 million, or 20%. The breakdown of our property operating costs is summarized in the table below:


	Three Months Ended June 30, (unaudited)
	2013		2012		$ Change			% Change
	($ in thousands)
Property operating costs:
Direct payroll	$	2,757	$	2,838	$	(81	)		-3	%
Rent		1,108		1,488		(380	)		-26	%
Repairs and maintenance		965		757		208			27	%
Utilities		6,249		4,964		1,285			26	%
Management fee allocation		1,718		1,481		237			16	%
Other		2,087		913		1,174			129	%

Total property operating costs	$	14,884	$	12,441	$	2,443			20	%

The increase in utilities expense was primarily attributable to higher utility rates at our Atlanta Metro data center, which resulted in an increase of $0.8 million in utilities expense, and the acquisition of our Sacramento data center, which contributed $0.6 million to utilities expense, with a partial offset from lower utilities expenses at our Suwanee data center of $0.1 million primarily due to the reclaiming of space and power from a customer, as discussed above. The remaining increase in property operating costs was due primarily to an increase in repairs and maintenance of $0.2 million, which tends to fluctuate from period to period, and an increased management fee allocation of $0.2 million due to growth in revenue. The management fee allocation is based on 4% of cash rental revenues for each facility and reflects an allocation of internal charges to cover back-office and service-related costs associated with the day-to-day operations of our data center facilities, with a corresponding offset to general and administrative expenses. The increase in other operating expenses of $1.2 million was due to a $0.7 million charge attributable to vacating our former New York leased facility, higher personnel costs of $0.4 million due to the outsourcing of our facility security personnel and higher bad debt expense of $0.1 million. These property operating cost increases were partially offset by a reduction in rent expense of $0.4 million attributable to vacating our former New York leased facility.

Real Estate Taxes and Insurance. Real estate taxes and insurance for the three months ended June 30, 2013 were $1.1 million compared to $0.8 million for the three months ended June 30, 2012. The increase of $0.3 million, or 43%, was primarily due to the reassessment of property taxes due to the expansions of existing data center facilities, which contributed $0.2 million of the increase, and the acquisition of our Sacramento data center, which contributed $0.1 million of the increase.

Depreciation and Amortization. Depreciation and amortization for the three months ended June 30, 2013 was $11.3 million compared to $8.6 million for the three months ended June 30, 2012. The increase of $2.6 million, or 30%, was attributable to additional depreciation of $1.7 million primarily related to expansion of our Atlanta Metro and Richmond data centers and the acquisition of our Sacramento data center, additional amortization of acquired intangibles of $0.6 million related to our Sacramento data center and additional amortization of leasing commissions of $0.3 million.

General and Administrative Expenses. General and administrative expenses for the three months ended June 30, 2013 were $9.7 million compared to $8.8 million for the three months ended June 30, 2012, an increase of $0.9 million, or 10%. General and administrative expenses for the three months ended June 30, 2013 included $2.4 million related to our sales and marketing activities, compared to $2.2 million for the three months ended June 30, 2012. The increase in general and

administrative expenses was primarily due to an increase in personnel costs, primarily as a result of expanding our senior management team and our sales and marketing organization, in conjunction with the continued expansion of our data center facilities, formation of our enterprise, government and customer retention teams and the development of our Cloud and Managed Services products. Total personnel costs increased approximately $0.9 million for the comparative periods, which included an increase of approximately $0.3 million in equity-based compensation expense. Total equity-based compensation expense was $0.4 million and $0.1 million for the three months ended June 30, 2013 and 2012, respectively. Additionally, there was a decrease of $0.3 million for lower consulting and professional fees primarily attributable to various customer-based compliance initiatives.

While the dollar amount of general and administrative expenses increased for the comparative periods, our general and administrative expenses represented 23% of total revenues for the three months ended June 30, 2013 compared to 24% for the three months ended June 30, 2012. Furthermore, our existing operating platform supported our recent acquisition of the Sacramento data center, as no significant incremental general and administrative expenses were incurred related to the operation of this facility in the three months ended June 30, 2013.

Interest Expense. Interest expense for the three months ended June 30, 2013 was $5.1 million compared to $6.3 million for the three months ended June 30, 2012. The decrease of $1.2 million, or 19%, was due to a reduction in the weighted average interest rate on our borrowings and higher capitalized interest during the period, partially offset by an $87.0 million increase in our average debt balance. The average debt balance (which includes member advances) for the three months ended June 30, 2013 was $568.6 million, with a weighted average interest rate, including the effect of interest rate swaps and amortization of deferred financing costs, of 4.36%. This compared to an average debt balance of $481.6 million for the three months ended June 30, 2012, with a weighted average interest rate, including the effect of interest rate swaps and amortization of deferred financing costs, of 5.66%. Interest capitalized in connection with our redevelopment activities during the three months ended June 30, 2013 and 2012 was $1.1 million and $0.5 million, respectively.

During the second quarter of 2013, we entered into an unsecured credit facility that bore interest at a rate of 2.55% as of June 30, 2013. We used the proceeds from the unsecured credit facility to repay the outstanding balances of certain loans with higher interest rates, including our secured credit facility, a loan secured by our Miami data center, a bridge loan secured by our Santa Clara data center, seller financing obtained to acquire the Lenexa and Dallas facilities, a loan for the purchase of land near the Suwanee facility and a loan from Chad L. Williams and entities controlled by Mr. Williams, and for redevelopment purposes.

Other Expense/Income. Other expense for the three months ended June 30, 2013 was $2.2 million compared to $0 for the three months ended June 30, 2012. The increase in other expense was primarily due to write-offs of unamortized deferred financing costs in connection with the replacement of our former secured credit facility with an unsecured credit facility.

Net Loss. A summary of the components of the increase in net loss for the three months ended June 30, 2013 of $1.0 million as compared to the three months ended June 30, 2012 is as follows (in millions):


	$ Change
	($ in millions)
Increase in revenues, net of property operating costs, real estate taxes and insurance	$	3.5
Increase in general and administrative expense		(0.9	)
Increase in depreciation and amortization		(2.6	)
Decrease in interest expense net of interest income		1.2
Increase in other expense		(2.2	)

Increase in net loss	$	(1.0	)

Six Months Ended June 30, 2013 Compared to Six Months Ended June 30, 2012

Changes in revenues and expenses for the six months ended June 30, 2013 compared to the six months ended June 30, 2012 are summarized below:


	Six Months Ended June 30, (unaudited)
	2013			2012			$ Change			% Change
	($ in thousands)
Revenues:
Rental	$	68,589		$	59,516		$	9,073			15	%
Recoveries from customers		6,322			4,489			1,833			41	%
Cloud and managed services		8,435			6,883			1,552			23	%
Other		1,092			444			648			146	%

Total revenues		84,438			71,332			13,106			18	%

Operating expenses:
Property operating costs		29,292			25,556			3,736			15	%
Real estate taxes and insurance		2,203			1,525			678			44	%
Depreciation and amortization		22,061			16,394			5,667			35	%
General and administrative		19,290			17,187			2,103			12	%
Restructuring charge		—			3,291			(3,291	)		*

Total operating expenses		72,846			63,953			8,893			14	%

Operating income		11,592			7,379			4,213			57	%
Other income and expense:
Interest income		13			46			(33	)		-72	%
Interest expense		(11,634	)		(12,393	)		759			-6	%
Other expense		(3,277	)		(1,434	)		(1,843	)		129	%

Net income (loss)	$	(3,306	)	$	(6,402	)	$	3,096			-48	%

* not applicable for comparison

Revenues. Total revenues for the six months ended June 30, 2013 were $84.4 million compared to $71.3 million for the six months ended June 30, 2012. The increase of $13.1 million, or 18%, was primarily due to organic growth in our customer base and the acquisition of our Sacramento data center in December 2012. The increase of $10.6 million, or 16%, in combined rental and cloud and managed services revenues was primarily due to a $4.8 million increase related to newly leased

space as well as increases in rents from previously leased space, net of downgrades at renewal and rental churn. Additionally, the acquisition of our Sacramento data center contributed approximately $5.8 million of combined rental and cloud and managed services revenues for the six months ended June 30, 2013.

The impact from customer downgrades in our combined rental and cloud and managed services revenues for the six months ended June 30, 2013 included the downgrade associated with our reclaiming of approximately 80,000 square feet of raised floor at our Suwanee facility in July 2012 from a C1 customer, as described above, that generated $3.2 million in rental revenues for the six months ended June 30, 2012.

Higher recoveries from customers for the six months ended June 30, 2013 compared to the six months ended June 30, 2012 were primarily due to increased utility rates at our Atlanta Metro data center, which contributed $1.2 million to the increase, and the acquisition of our Sacramento data center, which contributed $0.7 million to the increase. The $0.6 million increase in other revenue for the six months ended June 30, 2013 compared to the six months ended June 30, 2012 was due to the higher sales of scrap metals and other unused material of $0.5 million, lower discounts of $0.2 million and higher straight line rent of $0.1 million, partially offset by the elimination of a non-cash exchange of services arrangement which contributed $0.2 million of revenue in the six months ended June 30, 2012.

Property Operating Costs. Property operating costs for the six months ended June 30, 2013 were $29.3 million compared to property operating costs of $25.6 million for the six months ended June 30, 2012, an increase of $3.7 million, or 15%. The breakdown of our property operating costs is summarized in the table below:


	Six Months Ended June 30, (unaudited)
	2013		2012		$ Change			% Change
	($ in thousands)
Property operating costs:
Direct payroll	$	5,771	$	5,752	$	19			0	%
Rent		2,213		2,969		(756	)		-25	%
Repairs and maintenance		2,143		1,416		727			51	%
Utilities		11,796		9,609		2,187			23	%
Management fee allocation		3,369		2,852		517			18	%
Other		4,000		2,958		1,042			35	%

Total property operating costs	$	29,292	$	25,556	$	3,736			15	%

The increase in utilities expense was primarily attributable to higher utility rates at our Atlanta Metro data center, which resulted in an increase of $1.4 million in utilities expense, and the acquisition of our Sacramento data center, which contributed $1.2 million to utilities expense, and an increase in utilities expenses in other facilities of $0.2 million, with a partial offset from lower utilities expenses at our Suwanee data center of $0.6 million primarily due to the reclaiming of space and power from a customer. The remaining increase in property operating costs was due primarily to an increase in repairs and maintenance of $0.7 million, which tends to fluctuate from period to period, and an increased management fee allocation of $0.5 million due to growth in revenue. The increase in other operating expenses of $1.0 million was primarily due to a $0.7 million charge attributable to the consolidation of our New York and New Jersey data center operations of $0.7 million and higher personnel costs of $0.5 million due to the outsourcing of our facility security personnel, partially offset by the elimination of a non-cash exchange of services arrangement that contributed $0.2 million of

property operating costs in the six months ended June 30, 2012. These property operating cost increases were partially offset by a reduction in rent expense of $0.8 million attributable to vacating our former New York leased facility.

Real Estate Taxes and Insurance. Real estate taxes and insurance for the six months ended June 30, 2013 were $2.2 million compared to $1.5 million for the six months ended June 30, 2013. The increase of $0.7 million, or 44%, was primarily due to the reassessment of property taxes due to the expansions of existing data center facilities, which contributed $0.4 million of the increase, and the acquisition of our Sacramento data center, which contributed $0.3 million of the increase.

Depreciation and Amortization. Depreciation and amortization for the six months ended June 30, 2013 was $22.1 million compared to $16.4 million for the six months ended June 30, 2012. The increase of $5.7 million, or 35%, was attributable to additional depreciation of $3.6 million mostly related to expansion of our Atlanta Metro and Richmond data centers and the acquisition of our Sacramento data center, additional amortization of acquired intangibles of $1.4 million related to our Sacramento data center and additional amortization of leasing commissions of $0.7 million.

General and Administrative Expenses. General and administrative expenses for the six months ended June 30, 2013 were $19.3 million compared to $17.2 million for the six months ended June 30, 2012, an increase of $2.1 million, or 12%. General and administrative expenses for the six months ended June 30, 2013 included $4.7 million of costs related to our sales and marketing activities, compared to $4.3 million for the six months ended June 30, 2012. The increase in general and administrative expenses was primarily due to an increase in personnel costs, primarily as a result of expanding our senior management team and our sales and marketing organization, in conjunction with the continued expansion of our data center facilities, formation of our enterprise, government and customer retention teams and the development of our Cloud and Managed Services products. Total personnel costs increased approximately $1.8 million for the comparative periods, which included an increase of approximately $0.6 million in equity-based compensation expense. Total equity-based compensation expense was $0.8 million and $0.2 million for the six months ended June 30, 2013 and 2012, respectively. Additionally, there was a decrease of $0.2 million for lower consulting and professional fees primarily attributable to various customer-based compliance initiatives.

Restructuring Charge. During the six months ended June 30, 2012, we decided to consolidate our New York data center operations into our Jersey City data center. In connection with the consolidation of our New York data center operations into our Jersey City data center, we recorded a one-time restructuring charge of $3.3 million for the six months ended June 30, 2012, primarily associated with the termination of the lease of our former New York facility. We did not have any restructuring charges during the six months ended June 30, 2013.

Interest Expense. Interest expense for the six months ended June 30, 2013 was $11.6 million compared to $12.4 million for the six months ended June 30, 2012. The decrease of $0.8 million, or 6%, was due to a reduction in the weighted average interest rate on our borrowings and higher capitalized interest during the period, partially offset by an $89.9 million increase in our average debt balance. The average debt balance (which includes member advances) for the six months ended June 30, 2013 was $558.0 million, with a weighted average interest rate, including the effect of interest rate swaps and amortization of deferred financing costs, of 4.91%. This compared to an average debt balance of $468.1 million for the six months ended June 30, 2012, with a weighted average interest rate, including the effect of interest rate swaps and amortization of deferred financing costs, of 5.91%.

Interest expense was $0.3 million less during the six months ended June 30, 2012 as a result of non-cash mark-to-market adjustments associated with the derivative liability reported on our balance sheet, as there was no similar adjustment in the six months ended June 30, 2013. Interest capitalized in connection with our redevelopment activities during the six months ended June 30, 2013 and 2012 was $2.1 million and $1.1 million, respectively.

During the second quarter of 2013, we entered into an unsecured credit facility that bore interest at a rate of 2.55% as of June 30, 2013 and used the proceeds to repay certain outstanding debt as described above.

Other Expense/Income. Other expense for the six months ended June 30, 2013 was $3.3 million compared to other expense of $1.4 million for the six months ended June 30, 2012. The increase in other expense of $1.9 million, or 129%, was due to higher write-offs of unamortized deferred financing costs in connection with the replacement of our secured credit facility with an unsecured credit facility and an asset securitization which we determined was unlikely to close.

Net Loss. A summary of the components of the decrease in net loss for the six months ended June 30, 2013 of $3.1 million as compared to the six months ended June 30, 2012 is as follows (in millions):


	$ Change
	(in millions)
Increase in revenues, net of property operating costs, real estate taxes and insurance	$	8.7
Increase in general and administrative expense		(2.1	)
Increase in depreciation and amortization		(5.7	)
Decrease in restructuring charges		3.3
Decrease in interest expense net of interest income		0.7
Increase in other expense		(1.8	)

Decrease in net loss	$	3.1

Year Ended December 31, 2012 Compared to Year Ended December 31, 2011

Changes in revenues and expenses for the year ended December 31, 2012 compared to the year ended December 31, 2011 are summarized below:


	Year Ended December 31,
	2012			2011			$ Change			% Change
	($ in thousands)
Revenues:
Rental	$	120,758		$	104,051		$	16,707			16	%
Recoveries from customers		9,294			12,154			(2,860	)		-24	%
Cloud and managed services		14,497			12,173			2,324			19	%
Other		1,210			2,018			(808	)		-40	%

Total revenues		145,759			130,396			15,363			12	%

Operating expenses:
Property operating costs		51,506			57,900			(6,394	)		-11	%
Real estate taxes and insurance		3,632			2,621			1,011			39	%
Depreciation and amortization		34,932			26,165			8,767			34	%
General and administrative		35,986			28,470			7,516			26	%
Transaction costs		897			—			897			*
Gain on legal settlement		—			(3,357	)		3,357			*
Restructuring charge		3,291			—			3,291			*

Total operating expenses		130,244			111,799			18,445			16	%

Operating income		15,515			18,597			(3,082	)		-17	%
Other income and expense:
Interest income		61			71			(10	)		-14	%
Interest expense		(25,140	)		(19,713	)		(5,427	)		28	%
Other (expense) income, net		(1,151	)		136			(1,287	)		-946	%

Income (loss) before gain on sale of real estate		(10,715	)		(909	)		(9,806	)		1079	%
Gain on sale of real estate		948			—			948			*

Net income (loss)	$	(9,767	)	$	(909	)	$	(8,858	)		974	%

*	not applicable for comparison

Revenues . Total revenues for the year ended December 31, 2012 were $145.8 million compared to $130.4 million for the year ended December 31, 2011. The increase of $15.4 million, or 12%, was primarily due to organic growth in our customer base. The increase of $19.0 million, or 16%, in combined rental and cloud and managed services revenues was primarily related to newly leased space as well as increases in rents from previously leased space, net of downgrades at renewal and rental churn, and included the $2.7 million negative impact from our reclaiming space in July 2012 from a customer in our Suwanee data center, as described above.

As of December 31, 2012, our data centers were 86% leased based on leasable raised floor of approximately 484,000 square feet, with an average annualized rent of $340 per leased raised floor square foot including cloud and managed services revenue, or $303 per leased raised floor square foot excluding cloud and managed services revenue. As of December 31, 2011, our data centers were 74% leased based on leasable raised floor of approximately 549,000 square feet, with an average annualized rent of $294 per leased raised floor square foot including cloud and managed services revenue, or $262 per leased raised floor square foot excluding cloud and managed services revenue. The decrease in leasable raised floor was due to the reclaiming of space from a customer in our

Suwanee data center, as described above, and the consolidation of our former New York facility into our Jersey City facility, partially offset by the acquisition of our Sacramento data center in December 2012 and the addition of raised floor square footage from our redevelopment activities. The increase in average annualized rent per leased raised floor square foot as of December 31, 2012 compared to December 31, 2011 was primarily due to the reclaiming of 80,000 square feet in our Suwanee facility, which had been leased at a rental rate significantly below our average rental rate, as described above, the acquisition of our Sacramento data center facility, which included a large amount of C2 customers, and the ongoing lease-up of redeveloped space at our Atlanta Metro and Richmond data centers at current market rates.

The decrease of $2.9 million in recoveries from customers was primarily due to lower utility costs at our Atlanta Metro and Suwanee data centers, as discussed below. Other revenues declined by $1.7 million as the result of non-cash items, including the elimination of an exchange of services agreement and a reduction in intangible amortization revenues, partially offset by an increase in scrap metal sales of $0.9 million. Reduced other revenues from the elimination of an exchange of services agreement was offset by a corresponding reduction in property operating costs, as discussed below.

Property Operating Costs. Property operating costs for the year ended December 31, 2012 were $51.5 million compared to property operating costs of $57.9 million for the year ended December 31, 2011, a decrease of $6.4 million, or 11%. The breakdown of our property operating costs is summarized in the table below:


	Year Ended December 31,
	2012		2011		$ Change			% Change
	($ in thousands)
Property operating costs:
Direct payroll	$	11,737	$	11,279	$	458			4	%
Rent		5,561		6,209		(648	)		-10	%
Repairs and maintenance		2,826		2,855		(29	)		-1	%
Utilities		20,340		24,181		(3,841	)		-16	%
Management fee allocation		5,830		5,158		672			13	%
Other		5,212		8,218		(3,006	)		-37	%

Total property operating costs	$	51,506	$	57,900	$	(6,394	)		-11	%

The reduction in property operating costs was primarily attributable to lower utility rates and related costs at our Atlanta Metro data center, plus the reclaiming of space from a customer in our Suwanee data center, as discussed above, which resulted in a reduction in utilities expense of $3.8 million. The remaining reduction in property operating costs of $2.6 million is related to the elimination of the costs related to an exchange of services agreement of $1.1 million, lower rent expense of $0.6 million (mostly related to the elimination of rent due to the consolidation of our New York data center operations into our Jersey City data center), lower bad debt expense of $0.5 million, a reduction in outside services costs of $0.2 million and various operating efficiencies which resulted in an additional reduction of $1.3 million. These reductions were partially offset by an increase in direct payroll of $0.5 million and an increase in management fee allocation of $0.7 million due to growth in revenues.

Real Estate Taxes and Insurance. Real estate taxes and insurance for the year ended December 31, 2012 were $3.6 million compared to $2.6 million for the year ended December 31, 2011. The increase of $1.0 million, or 39%, was primarily attributable to a reassessment of taxes in Santa Clara for 2009, 2010 and 2011 totaling $0.4 million, which was expensed in 2012, and the expansion of our Atlanta Metro, Richmond and Santa Clara data center facilities, which contributed $0.5 million of the increase in real estate taxes.

Depreciation and Amortization. Depreciation and amortization for the year ended December 31, 2012 was $34.9 million compared to $26.2 million for the year ended December 31, 2011. The increase of $8.8 million, or 34%, was primarily due to additional depreciation of $7.6 million associated with expansion of our Atlanta Metro, Richmond and Santa Clara data centers, and additional amortization expense related to a higher level of leasing commissions of $1.7 million. This was partially offset by lower amortization of acquired intangibles of $0.6 million.

General and Administrative Expenses. General and administrative expenses for the year ended December 31, 2012 were $36.0 million compared to general and administrative expenses of $28.5 million for the year ended December 31, 2011, an increase of $7.5 million, or 26%. Approximately $10.6 million of the total general and administrative expenses for the twelve months ended December 31, 2012 resulted from sales and marketing expenses, compared to $8.9 million for the twelve months ended December 31, 2011. The increase in general and administrative expenses was partially offset by a $1.5 million reserve recorded for certain litigation matters in 2011. Excluding this reserve, the increase in general and administrative expenses for the year ended December 31, 2012 was $9.0 million. This increase was primarily attributable to an increase in personnel costs, primarily as a result of expanding our senior management team and our sales and marketing organization, in conjunction with the expansion of our data center facilities and formation of our enterprise, government and customer retention teams and development of our Cloud and Managed Services products. Total personnel costs increased $4.7 million for the comparative periods, which included approximately $0.6 million of severance charges in the year ended December 31, 2012. Total equity-based compensation expense was $0.4 million and $0.8 million for the years ended December 31, 2012 and 2011, respectively. Additionally, consulting, legal and recruiting fees increased by $1.9 million, primarily related to various customer compliance initiatives, software license fees increased by $1.3 million and sales-related services necessary to enhance and expand our Cloud and Managed Services products increased by $0.9 million. Our general and administrative expenses represented 24.7% of total revenues for the year ended December 31, 2012 compared to 21.8% for the year ended December 31, 2011. During the year ended December 31, 2012, our general and administrative platform was enhanced to facilitate growth in future periods and expand our product offerings.

Gain on Legal Settlement. Prior to 2009, damages were caused by a former vendor during redevelopment of our Santa Clara facility. The vendor agreed to pay $4.5 million to settle these damages in 2011, $1.1 million of which was used to offset our legal fees with the remainder recognized as a gain on settlement.

Restructuring Charge. During the first quarter of 2012, we decided to consolidate our New York data center operations into our Jersey City data center. In connection with the consolidation of our New York data center operations, we recorded a one-time restructuring charge of $3.3 million, primarily associated with the termination of the lease of our former New York data center.

Transaction Costs. In 2012, we incurred $0.9 million in costs related to the examination of proposed acquisitions. Acquisition-related costs are expensed in the periods in which the costs are incurred and the services are received.

Interest Expense. Interest expense for the year ended December 31, 2012 was $25.1 million compared to $19.7 million for the year ended December 31, 2011. The increase of $5.4 million, or 28%, was due to an increased average debt balance of $87.0 million, which was partially offset by a reduction in the weighted average interest rate. In addition, 2011 interest expense decreased by $4.5 million due to the impact of ineffective interest rate swaps in which we recognized greater interest expense in years prior to 2011. The average debt balance (which includes member advances) for the year ended December 31, 2012 was $473.4 million, with a weighted average interest rate, including

the effect of interest rate swaps and amortization of deferred financing costs, of 5.84%. This compared to an average debt balance of $386.4 million for the year ended December 31, 2011, with a weighted average interest rate, including the effect of interest rate swaps and amortization of deferred financing costs, of 7.01%. Interest expense was reduced by $0.3 million and $4.8 million, respectively, during the years ended December 31, 2012 and December 31, 2011, as a result of non-cash mark-to-market adjustments associated with the derivative liability reported on our balance sheet. Interest capitalized in connection with our redevelopment activities during the years ended December 31, 2012 and December 31, 2011 was $2.2 million and $2.6 million, respectively.

Other Expense/Income. Other expense for the year ended December 31, 2012 was $1.2 million compared to other income of $0.1 million for the year ended December 31, 2011. The increase in other expense of $1.3 million was primarily due to the write off of unamortized deferred financing costs associated with the early extinguishment of certain debt instruments.

Gain on Sale of Real Estate. In 2012, we recognized a gain on sale of a vacant data center facility of $0.9 million.

Net Loss. A summary of the components of the increase in net loss of $8.9 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011 is as follows:


	$ Change
	(in millions)
Increase in revenues, net of property operating costs, real estate taxes and insurance	$	20.7
Increase in general and administrative expense		(7.5	)
Increase in depreciation and amortization		(8.8	)
Increase in transaction costs		(0.9	)
Decrease in gain on settlements		(3.4	)
Increase in restructuring charge		(3.3	)
Increase in interest expense net of interest income		(5.4	)
Increase in other expense		(1.3	)
Increase in gain on sale of asset		0.9

Increase in net loss	$	(8.9	)

(1)	Includes $4.5 million due to the non-cash net impact of ineffective interest rate swaps, as discussed above.

Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

Changes in revenues and expenses for the year ended December 31, 2011 compared to the year ended December 31, 2010 are summarized below:


	Year Ended December 31,
	2011			2010			$ Change			% Change
	($ in thousands)
Revenues:
Rental	$	104,051		$	92,800		$	11,251			12	%
Recoveries from customers		12,154			12,506			(352	)		-3	%
Cloud and managed services		12,173			9,054			3,119			34	%
Other		2,018			5,795			(3,777	)		-65	%

Total revenues		130,396			120,155			10,241			9	%

Operating expenses:
Property operating costs		57,900			60,408			(2,508	)		-4	%
Real estate taxes and insurance		2,621			2,378			243			10	%
Depreciation and amortization		26,165			19,086			7,079			37	%
General and administrative		28,470			22,844			5,626			25	%
Gain on legal settlement		(3,357	)		—			(3,357	)		*

Total operating expenses		111,799			104,716			7,083			7	%

Operating income		18,597			15,439			3,158			20	%
Other income and expense:
Interest income		71			233			(162	)		-70	%
Interest expense		(19,713	)		(23,502	)		3,789			-16	%
Other (expense) income, net		136			22,214			(22,078	)		-99	%

Net income (loss)	$	(909	)	$	14,384		$	(15,293	)		-106	%

*	not applicable for comparison

Revenues. Total revenues for the year ended December 31, 2011 were $130.4 million compared to $120.2 million for the year ended December 31, 2010. The increase of $10.2 million, or 9%, was primarily due to organic growth in our customer base. The increase of $14.4 million, or 14%, in combined rental and cloud and managed services revenues was primarily due to newly leased space as well as increases in rents from previously leased space, net of downgrades at renewal and rental churn.

As of December 31, 2011, we were 74% leased based on leasable raised floor of approximately 549,000 square feet, with an average annualized rent of $294 per leased raised floor square foot including cloud and managed services revenue, or $262 per leased raised floor square foot excluding cloud and managed services revenue. We were 83% leased based on leasable raised floor of approximately 414,000 square feet as of December 31, 2010, with an average annualized rent of $319 per leased raised floor square foot including cloud and managed services revenue, or $290 per leased raised floor square foot excluding cloud and managed services revenue. The increase in leasable raised floor from December 31, 2010 to December 31, 2011 was primarily due to the addition of raised floor square footage from our redevelopment activities at our Atlanta Metro, Richmond, Santa Clara and Suwanee data centers. The decrease in annualized rent per leased raised floor square foot from December 31, 2010 to December 31, 2011 resulted from an increased mix of C1 revenues due to the commencement of leases for certain C1 customers at our Atlanta Metro, Richmond, Santa Clara and Suwanee data centers related to incremental data center space that we redeveloped at these facilities.

The decline of $0.4 million in recoveries from customers was primarily due to lower utility rates at our Atlanta Metro and Suwanee data centers. The decline of $3.8 million in other revenue was primarily related to the expiration of intangible rental revenue amortization associated with the purchase price allocation of below-market leases.

Property Operating Costs. Property operating costs for the year ended December 31, 2011 were $57.9 million compared to $60.4 million for the year ended December 31, 2010, a decrease of $2.5 million, or 4%. The breakdown of our property operating costs is summarized in the table below:


	Year Ended December 31,
	2011		2010		$ Change			% Change
	($ in thousands)
Property operating costs:
Direct payroll	$	11,279	$	9,920	$	1,359			14	%
Rent		6,209		9,553		(3,344	)		-35	%
Repairs and maintenance		2,855		3,949		(1,094	)		-28	%
Utilities		24,181		23,598		583			2	%
Management fee allocation		5,158		4,615		543			12	%
Other		8,218		8,773		(555	)		-6	%

Total property operating costs	$	57,900	$	60,408	$	(2,508	)		-4	%

The reduction in property operating costs was primarily attributable to lower rent-related costs of $3.3 million, primarily due to the acquisition of equipment that was previously being leased, and renegotiated reduced facility rent at our Jersey City data center. Lower repairs and maintenance costs of $1.1 million along with $1.0 million of operating efficiencies resulted in further reductions in our property operating costs. These reductions were offset by an increase in direct payroll of $1.4 million related to additional staffing to support the growth of our business, increased utilities expense of $0.6 million, increased management fee allocation of $0.5 million due to growth in revenues and increased communication services expenses of $0.6 million related to the increase in connectivity needs of our customers.

Real Estate Taxes and Insurance. Real estate taxes and insurance costs for the year ended December 31, 2011 were $2.6 million compared to $2.4 million for the year ended December 31, 2010. The increase of $0.2 million, or 10%, was primarily due to the reassessment of property taxes and the expansion of our Atlanta Metro, Richmond and Santa Clara data centers.

Depreciation and Amortization. Depreciation and amortization for the year ended December 31, 2011 was $26.2 million compared to $19.1 million for the year ended December 31, 2010. The increase of $7.1 million, or 37%, was primarily a result of additional depreciation of $7.0 million related to the expansion of our Atlanta Metro, Richmond and Santa Clara data centers and an increase in amortization of leasing commissions of $1.2 million, partially offset by $1.1 million of lower amortization of acquired intangibles.

General and Administrative Expenses. General and administrative expenses for the year ended December 31, 2011 were $28.5 million compared to general and administrative expenses of $22.8 million for the year ended December 31, 2010, an increase of $5.6 million, or 25%. Approximately $8.9 million of the total general and administrative expenses for the twelve months ended December 31, 2011 resulted from sales and marketing expenses, compared to $7.3 million for the twelve months ended December 31, 2010. The increase in general and administrative expenses was primarily a result of increased costs related to maintaining the corporate portion of our Atlanta Metro and Suwanee data centers of $1.7 million, increased personnel costs of $0.9 million as we

expanded headcount to support our business growth, primarily in sales and product development, a $1.5 million reserve recorded for certain litigation matters taken in 2011 and higher sales-related travel costs of $0.7 million. Our general and administrative expenses represented 21.8% of total revenues for the year ended December 31, 2011 compared to 19.0% for the year ended December 31, 2010.

Interest Expense. Interest expense, including amortization of deferred financing costs, for the year ended December 31, 2011 was $19.7 million compared to $23.5 million for the year ended December 31, 2010. The decrease of $3.8 million, or 16%, was due to lower interest rates on floating rate debt and mark-to-market adjustments associated with certain swap agreements, as discussed below, partially offset by a higher average debt balance and reduced capitalized interest. The average debt balance (which includes member advances) was $386.4 million for the year ended December 31, 2011, with a weighted average interest rate, including the effect of interest rate swaps and amortization of deferred financing costs, of 7.01%. This compared to an average debt balance of $346.0 million for the year ended December 31, 2010, with a weighted average interest rate, including the effect of interest rate swaps and amortization of deferred financing costs, of 8.75%. Interest expense was reduced by $4.8 million and $2.8 million, respectively, during the years ended December 31, 2011 and December 31, 2010 as a result of non-cash mark-to-market adjustments associated with the derivative liability reported on our balance sheet associated with certain swap agreements. Interest capitalized in connection with our redevelopment activities during the years ended December 31, 2011 and 2010 was $2.6 million and $4.0 million, respectively.

Other Expense/Income. Other income for the year ended December 31, 2011 was $0.1 million compared to other income of $22.2 million for the year ended December 31, 2010. The decrease in other income of $22.1 million was primarily due to a one-time gain on extinguishment of mortgage debt of $22.2 million in 2010.

Net Income/Loss. A summary of the components of the decrease in net income of $15.3 million for the year ended December 31, 2011 as compared to the year ended December 31, 2010 is as follows:


	$ Change
	(in millions)
Increase in revenues, net of property operating costs, real estate taxes and insurance	$	12.5
Increase in general and administrative expense		(5.6	)
Increase in depreciation and amortization		(7.1	)
Increase in gain on settlements		3.4
Decrease in interest expense net of interest income		3.6
Decrease in other income		(22.1	)

Decrease in net loss	$	(15.3	)

Non-GAAP Financial Measures

We consider the following non-GAAP financial measures to be useful to investors as key supplemental measures of our performance: (1) FFO; (2) Operating FFO; (3) MRR; (4) NOI; (5) EBITDA; and (6) Adjusted EBITDA. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss and cash flows from operating activities as a measure of our operating performance and liquidity. FFO, Operating FFO, MRR, NOI, EBITDA and Adjusted EBITDA, as calculated by us, may not be comparable to FFO, Operating FFO, MRR, NOI, EBITDA and Adjusted EBITDA as reported by other companies that do not use the same definition or implementation guidelines or interpret the standards differently from us.

FFO and Operating FFO

We consider funds from operations, or FFO, to be a supplemental measure of our performance which should be considered along with, but not as an alternative to, net income (loss) and cash provided by operating activities as a measure of operating performance and liquidity. We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. FFO represents net income (loss) (computed in accordance with GAAP), adjusted to exclude gains (or losses) from sales of property, real estate related depreciation and amortization and similar adjustments for unconsolidated partnerships and joint ventures. Our management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs.

Due to the volatility and nature of certain significant charges and gains recorded in our operating results that management believes are not reflective of our core operating performance and liquidity, management computes an adjusted measure of FFO, which we refer to as Operating FFO. We generally calculate Operating FFO as FFO excluding certain non-recurring and primarily non-cash charges and gains and losses that management believes are not indicative of the results of our operating real estate portfolio. We believe that Operating FFO provides investors with another financial measure that may facilitate comparisons of operating performance and liquidity between periods and, to the extent they calculate Operating FFO on a comparable basis, between REITs.

We offer these measures because we recognize that FFO and Operating FFO will be used by investors as a basis to compare our operating performance and liquidity with that of other REITs. However, because FFO and Operating FFO exclude real estate depreciation and amortization and capture neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our financial condition, cash flows and results of operations, the utility of FFO and Operating FFO as measures of our operating performance and liquidity is limited. Our calculation of FFO may not be comparable to measures calculated by other companies who do not use the NAREIT definition of FFO or do not calculate FFO in accordance with NAREIT guidance. In addition, our calculations of FFO and Operating FFO are not necessarily comparable to FFO and Operating FFO as calculated by other REITs that do not use the same definition or implementation guidelines or interpret the standards differently from us. FFO and Operating FFO are non-GAAP measures and should not be considered a measure of our results of operations or liquidity or as a substitute for, or an alternative to, net income (loss), cash provided by operating activities or any other performance measure determined in accordance with GAAP, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions to our stockholders.

A reconciliation of net income (loss) to FFO and Operating FFO is presented below:


	Three Months Ended June 30,						Six Months Ended June 30,						Year Ended December 31,
	2013			2012			2013			2012			2012			2011			2010
	(unaudited $ in thousands)
FFO
Net income (loss)	$	(1,232	)	$	(266	)	$	(3,306	)	$	(6,402	)	$	(9,767	)	$	(909	)	$	14,384
Real estate depreciation and amortizaton		10,110			8,277			19,617			15,155			30,968			23,956			17,387
Gain on sale of real estate		—			—			—			—			(948	)		—			—

FFO		8,878			8,011			16,311			8,753			20,253			23,047			31,771

Operating FFO
Restructuring charge		—			—			—			3,291			3,291			—			—
Write off of unamortized deferred financing costs		2,179			—			3,277			1,434			1,434			—			—
Gain on legal settlement		—			—			—			—			—			(3,357	)		—
Transaction costs		—			—			—			—			897			—			—
Intangible revenue		—			—			—			—			—			(960	)		(4,844	)
Gain on extinguishment of debt		—			—			—			—			—			—			(22,214	)
Unrealized gain on derivatives		—			—			—			(307	)		(307	)		(4,830	)		(2,257	)

Operating FFO	$	11,057		$	8,011		$	19,588		$	13,171		$	25,568		$	13,900		$	2,456

Monthly Recurring Revenue (MRR) and Recognized MRR

Separately, we calculate recognized MRR as the recurring revenue recognized during a given period, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues.

Management uses MRR and recognized MRR as supplemental performance measures because they provide useful measures of increases in contractual revenue from our customer leases. MRR and recognized MRR should not be viewed by investors as alternatives to actual monthly revenue, as determined in accordance with GAAP. Other companies may not calculate MRR or recognized MRR in the same manner. Accordingly, our MRR and recognized MRR may not be comparable to other companies’ MRR and recognized MRR. MRR and recognized MRR should be considered only as supplements to total revenues as a measure of our performance. MRR and recognized MRR should not be used as measures of our results of operations or liquidity, nor is it indicative of funds available to meet our cash needs, including our ability to make distributions to our stockholders.

A reconciliation of total revenues to recognized MRR in the period and MRR at period end is presented below:


	Three Months Ended June 30,						Six Months Ended June 30,						Year Ended December 31,
	2013			2012			2013			2012			2012			2011			2010
	(unaudited $ in thousands)
Recognized MRR
Total period revenues (GAAP basis)	$	42,940		$	36,689		$	84,438		$	71,332		$	145,759		$	130,396		$	120,155
Less: Total period recoveries		(3,456	)		(2,283	)		(6,322	)		(4,489	)		(9,294	)		(12,154	)		(12,506	)
Total period deferred setup fees		(1,125	)		(1,014	)		(2,188	)		(1,862	)		(4,317	)		(2,997	)		(2,710	)
Total period other		(911	)		(712	)		(2,143	)		(1,793	)		(3,615	)		(6,303	)		(6,107	)

Recognized MRR (in the period)		37,448			32,680			73,785			63,188			128,533			108,942			98,832

MRR
Total period revenues (GAAP basis)	$	42,940		$	36,689		$	84,438		$	71,332		$	145,759		$	130,396		$	120,155
Less: Total revenues excluding last month		(28,304	)		(24,365	)		(69,802	)		(59,008	)		(132,338	)		(119,156	)		(109,497	)

Total revenues for last month of period		14,636			12,324			14,636			12,324			13,421			11,240			10,658
Less: Last month recoveries		(1,224	)		(775	)		(1,224	)		(775	)		(879	)		(897	)		(1,175	)
Last month deferred set-up fees		(391	)		(352	)		(391	)		(352	)		(441	)		(278	)		(195	)
Last month other plus adjustments for period end		(278	)		(176	)		(278	)		(176	)		(244	)		(167	)		(150	)

MRR (at period end)*	$	12,743		$	11,021		$	12,743		$	11,021		$	11,857		$	9,898		$	9,138

*	Does not include our booked-not-billed MRR balance, which was $2.3 million and $1.2 million as of June 30, 2013 and 2012, respectively, and $1.1 million, $1.2 million and $1.0 million as of December 31, 2012, 2011, and 2010, respectively.

Net Operating Income (NOI)

We calculate net operating income, or NOI, as net income (loss), excluding interest expense, interest income, depreciation and amortization, write off of unamortized deferred financing costs, gain on extinguishment of debt, transaction costs, gain on legal settlement, gain (loss) on sale of real estate, restructuring charge and general and administrative expenses. We allocate a management fee charge of 4% of cash rental revenues as a property operating cost and a corresponding reduction to general and administrative expense to cover the day-to-day administrative costs to operate our data centers. The management fee charge of 4% is reflected as a reduction to net operating income.

Management uses NOI as a supplemental performance measure because it provides a useful measure of the operating results from our customer leases. In addition, we believe it is useful to investors in evaluating and comparing the operating performance of our properties and to compute the fair value of our properties. Our NOI may not be comparable to other REITs’ NOI as other REITs may not calculate NOI in the same manner. NOI should be considered only as a supplement to net income as a measure of our performance and should not be used as a measure of our results of operations or liquidity or as an indication of funds available to meet our cash needs, including our ability to make distributions to our stockholders. NOI is a measure of the operating performance of our properties and not of our performance as a whole. NOI is therefore not a substitute for net income as computed in accordance with GAAP.

A reconciliation of net income (loss) to NOI is presented below:


	Three Months Ended June 30,						Six Months Ended June 30,						Year Ended December 31,
	2013			2012			2013			2012			2012			2011			2010
	(unaudited $ in thousands)
Net Operating Income (NOI)
Net income (loss)	$	(1,232	)	$	(266	)	$	(3,306	)	$	(6,402	)	$	(9,767	)	$	(909	)	$	14,384
Interest expense		5,084			6,291			11,634			12,393			25,140			19,713			23,502
Interest income		(7	)		(11	)		(13	)		(46	)		(61	)		(71	)		(233	)
Depreciation and amortization		11,246			8,643			22,061			16,394			34,932			26,165			19,086
Write off of unamortized deferred financing costs		2,179			—			3,277			1,434			1,434			—			—
Gain on extinguishment of debt		—			—			—			—			—			—			(22,214	)
Transaction costs		—			—			—			—			897			—			—
Gain on legal settlement		—			—			—			—			—			(3,357	)		—
Gain on sale of real estate		—			—			—			—			(948	)		—			—
Restructuring charge		—			—			—			3,291			3,291			—			—
General and administrative expenses		9,696			8,829			19,290			17,187			35,986			28,470			22,844

NOI	$	26,966		$	23,486		$	52,943		$	44,251		$	90,904		$	70,011		$	57,369

Breakdown of NOI by Facility:
Atlanta Metro data center	$	12,815		$	10,528		$	25,000		$	20,048		$	42,787		$	29,712		$	26,595
Suwanee data center		6,644			8,461			13,428			16,766			30,471			32,258			28,508
Santa Clara data center		2,751			3,017			5,498			5,550			11,183			9,672			7,291
Richmond data center		2,413			1,346			4,679			2,116			6,094			267			—
Other data centers		2,343			134			4,338			(229	)		369			(1,898	)		(5,025	)

NOI	$	26,966		$	23,486		$	52,943		$	44,251		$	90,904		$	70,011		$	57,369

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA

We calculate EBITDA as net income (loss) adjusted to exclude interest expense and interest income, provision for income taxes (including income taxes applicable to sale of assets) and depreciation and amortization. Management believes that EBITDA is useful to investors in evaluating and facilitating comparisons of our operating performance between periods and between REITs by removing the impact of our capital structure (primarily interest expense) and asset base charges (primarily depreciation and amortization) from our operating results.

In addition to EBITDA, we calculate an adjusted measure of EBITDA, which we refer to as Adjusted EBITDA, as EBITDA excluding unamortized deferred financing costs, gains on extinguishment of debt, transaction costs, equity-based compensation expense, restructuring charge, gain (loss) on legal settlement and gain on sale of real estate. We believe that Adjusted EBITDA provides investors with another financial measure that can facilitate comparisons of operating performance between periods and between REITs.

Management uses EBITDA and Adjusted EBITDA as supplemental performance measures as they provide useful measures of assessing our operating results. Other companies may not calculate EBITDA or Adjusted EBITDA in the same manner. Accordingly, our EBITDA and Adjusted EBITDA may not be comparable to others. EBITDA and Adjusted EBITDA should be considered only as supplements to net income (loss) as measures of our performance and should not be used as substitutes for net income (loss), as measures of our results of operations or liquidity or as an indications of funds available to meet our cash needs, including our ability to make distributions to our stockholders.

A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA is presented below:


	Three Months Ended June 30,						Six Months Ended June 30,						Year Ended December 31,
	2013			2012			2013			2012			2012			2011			2010
	(unaudited $ in thousands)
EBITDA
Net income (loss)	$	(1,232	)	$	(266	)	$	(3,306	)	$	(6,402	)	$	(9,767	)	$	(909	)	$	14,384
Interest expense		5,084			6,291			11,634			12,393			25,140			19,713			23,502
Interest income		(7	)		(11	)		(13	)		(46	)		(61	)		(71	)		(233	)
Depreciation and amortization		11,246			8,643			22,061			16,394			34,932			26,165			19,086

EBITDA		15,091			14,657			30,376			22,339			50,244			44,898			56,739

Adjusted EBITDA
Write off of unamortized deferred financing costs		2,179			—			3,277			1,434			1,434			—			—
Gain on extinguishment of debt		—			—			—			—			—			—			(22,214	)
Transaction costs		—			—			—			—			897			—			—
Equity-based compensation expense		420			94			795			189			412			765			332
Gain on legal settlement		—			—			—			—			—			(3,357	)		—
Gain on sale of real estate		—			—			—			—			(948	)		—			—
Restructuring charge		—			—			—			3,291			3,291			—			—

Adjusted EBITDA	$	17,690		$	14,751		$	34,448		$	27,253		$	55,330		$	42,306		$	34,857

Liquidity and Capital Resources

As a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders on an annualized basis. We intend to make regular quarterly distributions to common stockholders and unit holders in order to maintain our status as a REIT. All such distributions are at the discretion of our board of directors. See “Distribution Policy.”

Short-Term Liquidity

Our short-term liquidity needs include funding capital expenditures for the redevelopment of data center space during the next 12 months (a significant portion of which is discretionary), meeting debt service and debt maturity obligations, funding distributions to our stockholders and unitholders, utility costs, site maintenance costs, real estate and personal property taxes, insurance, rental expenses, general and administrative expenses and certain recurring and non-recurring capital expenditures.

We expect that we will incur $195 million to $210 million in capital expenditures during the next 12 months in connection with the redevelopment of our data center facilities. We expect to spend approximately $180 million to $195 million of capital expenditures on redevelopment, with the remainder allocated to capitalized overhead costs (including capitalized interest, commissions, payroll and other similar costs), personal property and other less material capital projects. We continue to evaluate acquisition opportunities, but none are probable at this time and therefore the related expenditures are not currently included in these future estimates. Our capital expenditures for the six months ended June 30, 2013 and the years ended December 31, 2012, 2011 and 2010, respectively, are summarized in the table below:


	Six Months Ended June 30,		Year Ended December 31,
	2013		2012		2011		2010
			($ in thousands)
Redevelopment	$	52,608	$	109,511	$	97,118	$	94,281
Personal property		376		4,694		1,154		1,212
Maintenance capital expenditures		1,748		1,725		997		892
Capitalized interest, commissions and other overhead costs		10,620		17,296		19,477		11,061

Total capital expenditures	$	65,352	$	133,226	$	118,746	$	107,446

The increase in our expected capital expenditures during the next 12 months when compared to capital expenditures for the year ended December 31, 2012 is due to the continued expansion of our customer base and the associated ongoing growth in our existing facilities. See “—Cash Flows” for a discussion of the changes in capital expenditures for select historical periods.

Additional information concerning our estimated costs for projects that are currently under construction in our redevelopment pipeline is set forth below under “Business and Properties—Our Initial Portfolio—Redevelopment Pipeline.” This does not include approximately $4.5 million that relates to the buildout of space that will not be leased to customers (such as our office space at our headquarters and at our various other facilities). We expect to meet our short-term liquidity needs through net cash provided by operations, our current cash and cash equivalents balance and, to the extent necessary, additional indebtedness, including additional amounts on our credit facilities. The net proceeds of this offering received by us will primarily be used to repay indebtedness, including borrowings under our $350 million unsecured revolving credit facility, which is described below.

Upon completion of this offering, we expect to have $ million of cash and cash equivalents and the ability to borrow up to an additional $350 million under our revolving credit facility, subject to ongoing compliance with our covenants, which we believe together will be sufficient to meet our short-term liquidity needs.

Long-Term Liquidity

Our long-term liquidity needs primarily consist of funds for property acquisitions, scheduled debt maturities and recurring and non-recurring capital expenditures. We may also pursue additional redevelopment of our Atlanta Metro, Dallas, Richmond and Santa Clara data centers and future redevelopment of other space in our portfolio. The redevelopment of this space, including timing, is at our discretion and will depend on a number of factors, including availability of capital and our estimate of the demand for data center space in the applicable market. We expect to meet our long-term liquidity needs with net cash provided by operations, incurrence of additional long-term indebtedness, borrowings under our credit facilities and issuance of additional equity or debt securities, subject to prevailing market conditions, as discussed below.

100

Cash

As of June 30, 2013, we had $4.7 million of unrestricted cash and cash equivalents. In August 2013, our operating partnership made a distribution to its partners in an aggregate amount of approximately $7.7 million. On a pro forma basis, upon completion of this offering we expect to have $ million of cash and cash equivalents.

Indebtedness

As of June 30, 2013, we had outstanding approximately $561.1 million of indebtedness, including capital lease obligations, and we expect to have approximately $315 million outstanding upon completion of this offering. Upon completion of this offering, the following indebtedness will be outstanding:

Unsecured Credit Facility. In May 2013, we entered into a $575 million unsecured credit facility comprised of a five-year $225 million term loan and a four-year $350 million revolving credit facility with a one year extension, subject to satisfaction of certain conditions. This credit facility replaced the $440 million secured credit facility previously in place and was also used to repay outstanding balances under a loan secured by our Miami data center, a bridge loan secured by our Santa Clara data center, seller financing obtained to acquire the Lenexa and Dallas facilities, a loan for the purchase of land near the Suwanee facility and a loan from Chad L. Williams and entities controlled by Mr. Williams, and for redevelopment purposes. The total credit facility may be increased to $675 million subject to certain conditions set forth in the credit agreement, including the consent of the administrative agent and obtaining necessary commitments, either through an increase to the term loan or revolving credit facility, or a combination of both. Amounts outstanding under the unsecured credit facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will range, depending upon our leverage ratio, from 2.10% to 2.85% for LIBOR loans or 1.10% to 1.85% for base rate loans. As of June 30, 2013, the interest rate for amounts outstanding under our credit facility was 2.55%. The unsecured credit facility includes certain financial covenants, including a leverage ratio of total indebtedness to gross asset value not in excess of 55%. The interest rate applied to the outstanding balance of the unsecured credit facility decreases incrementally for every 5% below the maximum leverage ratio. The availability under the revolving credit facility is the lesser of (i) $350 million, (ii) 55% of unencumbered asset pool capitalized value, (iii) the amount resulting in an unencumbered asset pool debt service ratio of 1.75 to 1.00, as defined, or (iv) the amount resulting in an unencumbered asset pool debt yield of 15%, less, in the case of (ii), (iii) and (iv), unsecured debt as defined in the revolving credit facility. The availability of funds under our unsecured credit facility depends on compliance with our covenants. As of June 30, 2013, we had outstanding $469.0 million of indebtedness out of a total of $571.5 million of available capacity under our revolving credit facility.

Richmond Secured Credit Facility. In December 2012, we entered into a $100 million credit facility secured by our Richmond data center. This credit facility had a borrowing capacity of $74 million at June 30, 2013 and includes an accordion feature that allows us to increase the capacity up to $125 million subject to certain conditions set forth in the credit agreement, including the consent of the administrative agent and obtaining necessary commitments. This credit facility has a stated maturity date of December 18, 2015 with our option to extend, subject to satisfaction of certain conditions, for one additional year. This facility carries variable interest at rates ranging from LIBOR plus 4.0% to LIBOR plus 4.5% (for which the rate as of June 30, 2013 was LIBOR plus 4.25%, or 4.44% per annum), based on our overall leverage ratio as defined in the credit facility. This credit facility includes certain financial covenants, including a leverage ratio of total indebtedness to gross asset value not in excess of 55%. The interest rate applied to the outstanding balance of the credit facility decreases incrementally for every 5% below the maximum leverage ratio. As of June 30, 2013, the interest rate for amounts outstanding under the Richmond secured credit facility was 4.44%. This credit facility calculates availability as the lower of (i) 55% of mortgaged property appraised value, (ii) the amount

101

resulting in a borrowing base debt service ratio of 1.3 to 1.0 or (iii) the amount resulting in a borrower’s debt yield of 12%, in each case as defined in the credit facility. The availability of funds under our Richmond credit facility depends on compliance with our covenants. The proceeds from our Richmond credit facility may be used solely to finance the development of the Richmond property into a data center and to repay indebtedness under our unsecured credit facility described above. As of June 30, 2013, we had outstanding $70 million of indebtedness out of a total of $100 million of available capacity under our Richmond credit facility.

Atlanta Metro Equipment Loan. In April 2010, we entered into a $25 million loan to finance equipment related to an expansion project at our Atlanta Metro data center. The loan requires monthly interest and principal payments. The loan bears interest at 6.85% per annum, amortizes over ten years and matures on June 1, 2020.

For additional information relating to our indebtedness, see “Business and Properties—Description of Our Properties—Indebtedness Expected to be Outstanding After the Offering.”

Equity

Following consummation of this offering, we may issue equity securities from time to time, including OP units issued by our operating partnership in connection with acquisitions, as management and our board of directors may determine necessary or appropriate to satisfy our liquidity needs, taking into consideration market conditions, our stock price, the cost and availability of other sources of liquidity and any other relevant factors.

Contingencies

We are subject to various routine legal proceedings and other matters in the ordinary course of business. While resolution of these matters cannot be predicted with certainty, management believes, based upon information currently available, that the final outcome of these proceedings will not have a material adverse effect on our financial condition, liquidity or results of operations.

Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2012, including the future non-cancellable minimum rental payments required under operating leases and the maturities and scheduled principal repayments of indebtedness and other agreements (in thousands):


Obligations	2013		2014		2015		2016		2017		Thereafter		Total
Operating leases	$	4,935	$	4,949	$	4,955	$	5,030	$	5,103	$	71,092	$	96,064
Capital leases		668		715		767		341		—		—		2,491
Future principal payments of indebtedness(1)		81,730		317,722		71,065		897		717		15,660		487,791
Member advances and notes payable(2)		26,958		—		—		—		—		—		26,958

Total(3)	$	114,291	$	323,386	$	76,787	$	6,268	$	5,820	$	86,752	$	613,304

(1)	Does not include letters of credit of $3.5 million outstanding as of December 31, 2012 under our previous secured revolving credit facility, which now are part of our unsecured credit facility.

(2)	Represents the balance outstanding under a loan agreement with Chad L. Williams, our Chairman and Chief Executive Officer, and entities controlled by Mr. Williams. This loan was repaid on June 28, 2013.

102

(3)

Total obligations does not include contractual interest that we are required to pay on our long-term debt obligations. Contractual interest payments on our credit facilities, mortgages, notes payable to related parties, capital leases and other financing arrangements through the scheduled maturity date, assuming no prepayment of debt, are shown below. Interest payments were estimated based on the principal amount of debt outstanding and the applicable interest rate as of December 31, 2012 (in thousands):


2013	2014	2015	2016	2017	Thereafter	Total
$24,050	$16,436	$4,133	$902	$712	$900	$47,133

In May 2013, we entered into a $575 million unsecured credit facility comprised of a $225 million term loan and a $350 million revolving credit facility. We obtained $445 million of proceeds at the closing of this credit facility, a majority of which we used to pay off our previous secured credit facility, a loan secured by our Miami data center, a bridge loan secured by our Santa Clara data center, seller financing obtained to acquire the Lenexa and Dallas facilities, a loan for the purchase of land near the Suwanee facility and a loan from Chad L. Williams and entities controlled by Mr. Williams, $10 million of which previously was cancelled in exchange for the issuance to Mr. Williams of $10 million of OP units, and for redevelopment purposes. As a cumulative result of these actions, approximately $400 million of indebtedness outstanding as of December 31, 2012, which was scheduled to mature in 2013 and 2014, will now mature in 2017 and thereafter. The contractual obligations table below gives effect to the modification of our borrowings in connection with the new unsecured credit facility as of June 30, 2013 (in thousands):


Obligations	2013		2014		2015		2016		2017		Thereafter		Total
Operating Leases	$	2,468	$	4,949	$	4,955	$	5,030	$	5,103	$	71,092	$	93,597
Capital Leases		339		715		767		341		—		—		2,163
Future Principal Payments of Indebtedness(1)		1,064		2,239		72,397		2,567		246,748		233,888		558,903

Total(2)	$	3,871	$	7,903	$	78,119	$	7,938	$	251,851	$	304,980	$	654,662

(1)	Does not include letters of credit of $3.5 million outstanding as of June 30, 2013 under our previous secured revolving credit facility, which now are part of our unsecured credit facility.

(2)


2013	2014	2015	2016	2017	Thereafter	Total
$8,615	$16,939	$16,198	$12,974	$7,843	$2,453	$65,022

Off-Balance Sheet Arrangements

We utilize derivatives to manage our interest rate exposure. Our interest rate swaps are designated as a cash flow hedge of future interest payments. During February 2012, we entered into two interest rate swaps with an aggregate notional amount of $150 million which qualified for hedge accounting treatment. We perform assessments of hedging effectiveness, and any ineffectiveness is recorded in interest expense. There was no ineffectiveness for the period ended June 30, 2013 or 2012, respectively.

103

Cash Flows


	Six Months Ended June 30,						Year Ended December 31,
	2013			2012			2012			2011			2010
	($ in thousands)
Cash Flow Data
Cash flow provided by (used for):
Operating activities	$	19,990		$	20,683		$	35,098		$	24,374		$	13,277
Investing activities		(86,526	)		(66,503	)		(194,927	)		(118,746	)		(56,574	)
Financing activities		63,004			44,139			160,719			94,669			5,610

Six Months Ended June 30, 2013 Compared to Six Months Ended June 30, 2012

Cash flow provided by operating activities was $20.0 million for the six months ended June 30, 2013, compared to $20.7 million for the six months ended June 30, 2012. The decrease in cash flow provided by operating activities of $0.7 million was due to changes in operating assets and liabilities that resulted in a negative cash contribution of $2.1 million for the six months ended June 30, 2013 compared to a positive cash contribution from changes in operating assets and liabilities of $4.2 million for the six months ended June 30, 2012. This decrease was partially offset by an increase in cash operating income of $5.7 million for the six months ended June 30, 2013 compared to cash operating income for the six months ended June 30, 2012.

Cash flow used for investing activities increased by $20.0 million to $86.5 million for the six months ended June 30, 2013, compared to $66.5 million for the six months ended June 30, 2012. The increase was primarily due to higher cash outflow for the acquisition of our Dallas facility of $21.2 million, partially offset by lower cash paid for capital expenditures primarily related to the redevelopment of our Richmond, Atlanta Metro and Suwanee data centers of $1.2 million. These expenditures include capitalized soft costs such as interest, payroll and other internal costs to redevelop properties, which were, in the aggregate, $6.0 million and $4.3 million for the six months ended June 30, 2013 and 2012, respectively.

Cash flow provided by financing activities was $63.0 million for the six months ended June 30, 2013, compared to $44.1 million for the six months ended June 30, 2012. The increase was primarily a function of an increase in borrowings under our former and new credit facilities in order to acquire and redevelop our data centers. In addition, the cash flow provided by financing activities for the six months ended June 30, 2012 was reduced by a payment for the settlement of a swap liability of $4.6 million. As of June 30, 2013, we had $13.0 million in accounts payable related to the payoff of the member advances. This transaction was subsequently paid on July 3, 2013.

Year Ended December 31, 2012 Compared to Year Ended December 31, 2011

Cash flow provided by operating activities was $35.1 million for the year ended December 31, 2012, compared to $24.4 million for the year ended December 31, 2011. The increased cash flow provided by operating activities of $10.7 million was primarily due to an increase in cash operating income of $4.9 million and an increase in cash flow associated with net changes in working capital of $5.9 million.

Cash flow used for investing activities increased by $76.2 million to $194.9 million for the year ended December 31, 2012, compared to $118.7 million for the year ended December 31, 2011. The increase was primarily due to higher cash outflow for the acquisition of our Sacramento facility of $63.3 million and an increase in cash paid for capital expenditures primarily related to redevelopment of our Atlanta Metro and Richmond data centers of $14.5 million. These increases were partially offset

104

by proceeds from the sale of our former Topeka, Kansas facility of $1.5 million. These expenditures include capitalized soft costs such as interest, payroll and other internal costs to redevelop properties, which were, in the aggregate, $8.9 million and $8.7 million for the years ended December 31, 2012 and 2011, respectively.

Cash flow provided by financing activities was $160.7 million for the year ended December 31, 2012, compared to $94.7 million for the year ended December 31, 2011. The increase was primarily a function of $91.9 million of equity financing primarily provided by General Atlantic, $126.0 million of increased proceeds from our previous secured revolving credit facility in 2012 compared to 2011 and $70.0 million of proceeds drawn from a credit facility secured by our Richmond data center, offset by $216.6 million of debt repayments in 2012. The proceeds from these financings, net of debt repayment, were utilized to acquire and redevelop our facilities.

Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

Cash flow provided by operating activities was $24.4 million for the year ended December 31, 2011, compared to $13.3 million for the prior period. The increased cash flow provided by operating activities of $11.1 million was primarily due to an increase in cash operating income of $15.3 million which was partially offset by a $4.2 million lower cash flow contribution from net changes in working capital.

Cash flow used in investing activities increased by $62.2 million to $118.7 million for the year ended December 31, 2011, compared to $56.6 million for the year ended December 31, 2010. The increase was primarily due to a positive cash flow contribution in 2010 from changes in restricted cash of $50.9 million that did not recur in 2011 and an increase in cash paid for capital expenditures primarily related to the redevelopment of data center space of $11.3 million. These expenditures include capitalized soft costs such as interest, payroll and other internal costs to redevelop properties, which were, in the aggregate, $8.7 million and $5.6 million for the years ended December 31, 2011 and 2010, respectively.

Cash flow provided by financing activities was $94.7 million for the year ended December 31, 2011, compared to $5.6 million for the year ended December 31, 2010. The increase was primarily due to debt borrowings, the proceeds from which were utilized to continue to invest in our facilities.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our predecessor’s historical financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results may differ from these estimates. We have provided a summary of our significant accounting policies in Note 2 of our predecessor’s audited financial statements included elsewhere in this prospectus. We describe below accounting policies that require material subjective or complex judgments and that have the most significant impact on our financial condition and results of operations. Our management evaluates these estimates on an ongoing basis, based upon information currently available and on various assumptions management believes are reasonable as of the date of this prospectus.

Real Estate Assets. Real estate assets are reported at cost. All capital improvements for the income-producing properties that extend their useful life are capitalized to individual property improvements and depreciated over their estimated useful lives. Depreciation is generally provided on

105

a straight-line basis over 40 years from the date the property was placed in service. Property improvements are depreciated on a straight-line basis over the life of the respective improvement ranging from 20 to 40 years from the date the components were placed in service. Leasehold improvements are depreciated over the lesser of 20 years or through the end of the respective life of the lease. Repairs and maintenance costs are expensed as incurred.

Capitalization of Costs. We capitalize certain redevelopment costs, including internal costs, incurred in connection with redevelopment. The capitalization of costs during the construction period (including interest and related loan fees, property taxes and other direct and indirect costs) begins when redevelopment efforts commence and ends when the asset is ready for its intended use.

Intangible Assets and Liabilities. Intangible assets and liabilities include acquired above-market leases, below-market leases, in-place leases and customer relationships. Acquired above-market leases are amortized on a straight-line basis as a decrease to rental revenue over the remaining term of the underlying leases. Acquired below-market leases are amortized on a straight-line basis as an increase to rental revenue over the remaining term of the underlying leases, including fixed option renewal periods, if any. Acquired in-place lease costs are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. Should a customer terminate its lease, the unamortized portions of the acquired above-market and below-market leases, acquired in-place lease costs and acquired customer relationships associated with that customer are written off to amortization expense or rental revenue, as indicated above.

Impairment of Long-Lived and Intangible Assets. Whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable, we assess whether there has been impairment in the value of long-lived assets used in operations or in development and intangible assets. Recoverability of assets to be held and used is generally measured by comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset group. If the net carrying value of the asset exceeds the value of the undiscounted cash flows, the fair value of the asset is assessed and may be considered impaired. An impairment loss is recognized based on the excess of the carrying amount of the impaired asset over its fair value.

Deferred Costs. Deferred costs, net on our balance sheet includes both financing costs and leasing costs. Deferred financing costs represent fees and other costs incurred in connection with obtaining debt and are amortized over the term of the loan and are included in interest expense. Deferred leasing costs consist of external fees and internal costs incurred in the successful negotiations of leases and are deferred and amortized over the terms of the related leases on a straight-line basis. If an applicable lease terminates prior to the expiration of its initial term, the carrying amount of the costs are written off to amortization expense.

Deferred Income. Deferred income generally results from non-refundable charges paid by the customer at lease inception to prepare their space for occupancy. We record this initial payment, commonly referred to as set-up fees, as a deferred income liability which amortizes into rental revenue over the term of the related lease on a straight-line basis.

Rental Revenue. We, as a lessor, have retained substantially all the risks and benefits of ownership and account for our leases as operating leases. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases, which commences when control of the space has been provided to the customer. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease, as discussed above.

106

Recoveries from Customers. Certain customer leases contain provisions under which the customers reimburse us for a portion of the property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling-related charges. The reimbursements are included in revenue as recoveries from customers in the statements of operations and comprehensive income in the period in which the applicable expenditures are incurred. Certain customer leases are structured to provide a fixed monthly billing amount that includes an estimate of various operating expenses, with all revenue from such leases included in rental revenue.

Cloud and Managed Services Revenue. We may provide both our Cloud product and access to our Managed Services to our customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided.

Inflation

Substantially all of our long-term leases—leases with a term greater than three years—contain rent increases and reimbursement for certain operating costs. As a result, we believe that we are largely insulated from the effects of inflation over periods greater than three years. Leases with terms of three years or less will be replaced or renegotiated within three years and should adjust to reflect changed conditions, also mitigating the effects of inflation. Moreover, to the extent that there are material increases in utility costs, we generally reserve the right to renegotiate the rate. However, any increases in the costs of redevelopment of our properties will generally result in a higher cost of the property, which will result in increased cash requirements to redevelop our properties and increased depreciation and amortization expense in future periods, and, in some circumstances, we may not be able to directly pass along the increase in these redevelopment costs to our customers in the form of higher rental rates.

Quantitative and Qualitative Disclosures About Market Risk

Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. The primary market risk to which we believe we are exposed is interest rate risk. Many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control, contribute to interest rate risk.

As of June 30, 2013, we had outstanding $539 million of consolidated indebtedness that bore interest at variable rates, of which $150 million was hedged utilizing interest rate swaps that have a fixed LIBOR rate of 0.5825% and expire in September 2014. An interest rate cap of an additional $50 million was put in place as of June 30, 2013 with a capped LIBOR rate of 3% through December 18, 2015.

We monitor our market risk exposures using a sensitivity analysis. Our sensitivity analysis estimates the exposure to market risk sensitive instruments assuming a hypothetical 1% change in year-end interest rates. LIBOR rates are not currently within 1% of our interest rate caps, therefore a 1% increase in interest rates would increase the interest expense on the $389 million of variable indebtedness outstanding as of June 30, 2013 that is not hedged by approximately $3.9 million annually. Conversely, a decrease in the LIBOR rate to 0% would decrease the interest expense on this $389 million of variable indebtedness outstanding by approximately $0.7 million annually based on the one month LIBOR rate of approximately 0.2% as of June 30, 2013.

The above analyses do not consider the effect of any change in overall economic activity that could impact interest rates or expected changes associated with future indebtedness. Further, in the event of a change of that magnitude, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.

107

INDUSTRY OVERVIEW AND MARKET OPPORTUNITY

Data centers are specialized facilities designed to house mission-critical networking and computer equipment, including servers, data storage systems, routers, switches and fiber optic communications equipment. In addition, data centers provide the power, cooling and network connectivity necessary to efficiently operate this IT equipment in a secure, controlled environment. Many data centers are geographically located in places where multiple communications networks intersect and meet. These data centers can also act as interconnection points that allow customers to connect to multiple communication service provider networks and exchange traffic with each other. Data centers generally include raised flooring, which enables efficient, flexible distribution of cooled air and power, redundant power supplies, redundant data communication, environmental controls (e.g., air conditioning and fire suppression) and security systems.

Data center space typically is available in three configurations: cabinets, cages and suites. Cabinets are enclosed private cabinets that provide a relatively small amount of usable space. Cages are private enclosures that are leased on a per square foot basis and can accommodate cabinets and freestanding or non-rack mountable equipment. Suites are private rooms with solid walls that can be configured to the specifications of the customer. Users of data centers include organizations such as financial institutions, healthcare companies, government agencies, communications service providers, software companies, global Internet companies and cloud enterprises, which utilize data centers for a variety of purposes, including core revenue-generating operations, primary corporate computing, data storage and management, business continuity, disaster recovery, web hosting and IT outsourcing.

Industry History and Evolution

While data centers have existed since the early 1960s, the data center industry has evolved considerably in the last decade. In the mid-2000s, most industries started moving their business data, content and applications to Internet-based technologies. Today, almost everything done on the Internet from sending or receiving email, browsing a website, watching a video or uploading or downloading a file starts at, passes through, ends in or is processed on a computer that resides in a data center. Both the continued growth of the Internet, which has forced businesses to provide their online products and services 24 hours a day, 7 days a week, and their increasing dependence on real-time data collection, processing, analysis, storage and distribution have increased the need for reliable, highly redundant data centers that reduce the risk of power, cooling and communication outages. As businesses have become increasingly dependent on technology and the Internet, they require secure space to house computer equipment in an environment that provides access to multiple communication service provider networks and significant power density.

Third-party data centers provide the necessary power densities and act as the hubs to securely and efficiently process, analyze, store and distribute data, content and applications. We believe that the data center industry has reached a tipping point in the last decade whereby the significant security and power density requirements of customers can be more efficiently delivered through purpose-built facilities rather than at a customer’s existing premises, such as office buildings. For example, we believe a modern data center can support approximately 150 watts of capacity for each square foot of customer space, compared to 5 to 10 watts per square foot in a typical office building.

In addition to security and power density, we believe that in recent years the primary focus of customers of third-party data center providers has shifted from improving the ability to respond to adverse or unpredictable conditions such as interruption of power to the facility, or operational resiliency, to operational efficiency. Because of this, third-party data center providers are now focused on delivering data center solutions in the most efficient manner possible, across multiple dimensions: capital, pricing, deployment, operations, maintenance, labor (including adoption of data center

108

infrastructure management solutions), regulatory compliance and sustainability. We believe that the scale of a data center facility plays an important role in achieving efficiency across all of the above dimensions, highlighting the importance of mega data centers, which we define as data centers with a minimum of 150,000 raised floor square feet that offer significant power density . Further, customers also have adopted cloud and managed services to reduce cost, provide flexibility, respond to business requirements quickly and add, reconfigure or remove computing resources as needed, in real-time. As cloud and managed services grow in importance, we believe that third-party data center providers will take on an even greater and more vital role.

The North American data center market traditionally had been confined to a handful of metropolitan areas, such as New York, Silicon Valley, Northern Virginia, Chicago, Dallas and Los Angeles. In recent years, however, as more organizations in other large and smaller population centers have experienced increased IT demands and needs for IT outsourcing, other geographic areas have begun to emerge as new data center markets. For example, the IT needs of South American companies have propelled the data center market in Miami. In addition, Richmond is becoming an alternative to data centers in Northern Virginia in part due to its proximate location to federal government customers. We have also observed larger enterprise data center users increasingly deciding to locate their data centers in diverse locations throughout the country, including smaller metropolitan areas. At the same time, in traditional data center markets, such as Silicon Valley, continued increases in IT demands and outsourcing needs are causing a large number of organizations to compete for a limited supply of data centers. We believe that both the traditional and emerging data center markets are currently underserved and, as a result, present significant opportunities for established data center providers such as ourselves.

Primary Offerings in Today’s Data Centers

The data center industry encompasses a wide range of facility types that correspond to different customer technology, cost, regulatory and industry/business requirements. While the two broad categories of data centers include in-house and third-party providers, both types of facilities feature the same technical infrastructure elements that transform a building into a data center, including primary and backup power sources, advanced cooling and ventilation systems, fire suppression systems, physical and digital security and network connectivity.

In-House Data Centers

Many companies still own and operate their own data centers. These facilities may be as small as single server rooms within a company’s office space or as large as standalone, purpose-built data centers. Companies may choose to operate in-house data centers due to regulatory considerations or because IT infrastructure is perceived to be a core competency and an important element of their business value proposition.

Third-Party Data Center Providers

We believe that an increasing portion of the data center customer market utilizes multi-tenant data centers because of the efficiency of design, including access to power, enhanced security and rich connectivity, the increased flexibility and scalability these data centers offer, and the customers’ desire to focus on their core competencies and free-up balance sheet capacity. There are three key market segments of the multi-tenant data center services industry—wholesale/custom data centers, retail colocation data centers and cloud and managed services providers, as described below:

Wholesale / Custom Data Center . Wholesale providers generally serve large customers who typically rent at least 500 kilowatts, or kW, of power and at least 3,000 square feet of raised floor under long-term leases of five to ten years with little or no managed services. Wholesale

109

infrastructure providers, who generally own the underlying data center facility, are responsible for developing and maintaining the core power and cooling systems necessary to run a customer’s system continuously. However, installing and maintaining the servers and related equipment, including connecting them to a telecommunications network, generally remains the customer’s responsibility.

Wholesale infrastructure providers seek to distinguish themselves by the large amount of power they can provide through a single facility and the long-term cost savings they can offer to customers through economies of scale. The cost of power consumed by customers is passed through to customers, which is known as metered power. This lease structure enables customers to tie costs more closely to actual usage, which can provide significant savings, particularly during a ramp-up phase prior to full utilization of available power. Some wholesale providers also utilize triple-net leases, under which the operating costs, including power, of a property are passed through to the customers. Wholesale customers generally consist of large corporations, government agencies and global Internet businesses. Customers also include cloud and managed services providers who sublease their space to customers.

Retail Colocation . Retail colocation providers typically serve customers that rent smaller amounts of space in the form of cabinets or cages, but often require high network connectivity densities and interconnection services. Some retail colocation providers also provide additional managed services. By combining these services with secure, economically designed space, power and cooling, these retail colocation providers are able to charge more than a wholesale provider, realizing higher revenue per raised square foot than those who do not offer such services. Retail colocation customers typically sign a gross lease of up to three years that includes a specified amount of power usage with separate charges for any power overages. Retail colocation customers include a broad range of organizations, from SMBs to large corporations and government agencies.

Cloud and Managed Services . We believe that cloud computing is the fastest-growing product offered within the data center industry. The U.S. National Institute of Standards and Technology, or NIST, defines cloud computing as a model that provides convenient, on-demand network access to a shared pool of servers that can be configured and rapidly released to users with minimal management effort or coordination with service providers. The three primary segments in the overall cloud provider market include applications (such as Microsoft Office Live, Salesforce.com and Workday), where software and related data are hosted on third party servers and accessed by users via a web browser, platform (such as Microsoft Windows Live, VMware Cloud Foundry and Adobe AIR), which allows customers to develop and deploy software applications on third party servers, and infrastructure (such as Amazon Web Services and Rackspace), which allows customers to store data and run their operating system and application software on virtual servers with flexible capacity. We primarily compete in the infrastructure segment. Although cloud infrastructure providers historically have targeted smaller companies, we believe that cloud products are applicable to any organization (including large corporations, SMBs, and government agencies) that is looking to reduce capital expenditures and outsource IT infrastructure.

Cloud and managed services providers, in addition to providing space, power, connectivity and a secure environment, also can provide a comprehensive outsourced solution that comprises the management (and typically ownership) of the servers, storage and networking infrastructure, as well as the management of operating systems and other infrastructure software. Since a cloud offering provides a comprehensive outsourced solution, average pricing is significantly higher on a per square foot basis than wholesale and retail colocation pricing. Customer contracts for complex, highly customized solutions are typically up to three years and fixed-price, while those for less complex solutions and with limited-to-no customization are typically short-term or no contract with usage based pricing.

110

Managed services are additional support services necessary to operate equipment and associated business applications, and are sold as discrete services. These managed services may include configuration, operation and monitoring of computer equipment and networks, database management and application management and are billed on a per use or monthly basis. Although customers may not need to outsource these services currently, we believe that the provision of managed services will increase as customers’ IT needs become more complex.

Market Opportunity

According to 451 Research, the North American multi-tenant data center market, which includes wholesale and retail colocation offerings, is estimated to grow from $8.2 billion in 2011 to $13.7 billion in 2014, representing a compound annual growth rate of 19%. In addition, according to 451 Research, the market for cloud IaaS is estimated to grow from $1.4 billion in 2011 to $5.2 billion in 2014, representing a compound annual growth rate of 55%. Together, this represents a cumulative compound annual growth rate of over 25% for the multi-tenant data center and cloud IaaS markets from 2011 to 2014.

We believe that the data center industry enjoys strong demand principally driven by the continually increasing need for processing, storage and network interconnection capabilities. Additionally, companies are increasingly outsourcing their data center needs due to the high cost of operating in-house data center facilities, increasing power and cooling requirements for data centers, the operational-intensive nature of a data center and the growing focus on business redundancy and disaster recovery planning. At the same time, we believe that there are a limited number of companies that can adequately service the increasingly complex needs of data center customers.

While not immune to downturns in the economy, we believe that the increasingly mission-critical nature of the data center business and the positive trends driving overall demand make data centers more resilient to a downturn in the broader economy. Organizations are becoming increasingly dependent on technology to power their critical business processes. Customers therefore require that their IT infrastructure runs smoothly and efficiently throughout the various stages of an economic cycle, including periods of economic downturn. As a result, we believe that data center customers are less likely to terminate leases during economic downturns than customers who lease more traditional forms of real estate. In addition, during economic downturns, when businesses have less access to capital to pursue an internal upgrade or development of data center space, outsourcing to third-party data centers may offer a more cost-effective solution. Finally, as was experienced during the recent recession, the volume of data created and transmitted across the Internet, and the corresponding data storage requirements, has continued to expand regardless of macroeconomic conditions.

Industry Demand Drivers

Growing Levels of Internet Traffic. According to IBM, 90% of the data in the world today has been created in the last two years, and every day 2.5 exabytes, or 2.7 trillion megabytes, of data are created. For illustrative purposes, 1 terabyte contains 2,000 hours of CD-quality music, 10 terabytes could store the entire U.S. Library of Congress print collection and there are 1 million terabytes per exabyte. IP traffic is expected to grow 23% annually from 2012 to 2017, according to Cisco’s May 2013 Visual Networking Index Update. Key drivers of Internet traffic growth include the proliferation of Internet-connected devices (particularly smart phones and tablets), the spread of high-speed mobile networks, the growth in consumers’ appetite for online/mobile video

111

streaming and social networking, the expansion of Internet-based business models, increased business use of real-time data access and processing-heavy applications for business analytics and data mining. According to the GSMA Mobile Economy 2013 report, there were almost seven billion mobile connections in 2012, and three billion connections are expected to be added through 2017. GSMA also forecasts that the share of 3G and 4G networks will increase from 26% in 2013 to 53% in 2017, providing an opportunity for continued high growth in mobile data traffic.

Increasing Data and Demand for More Secure Data Storage Capabilities. As the amount of digital information grows, corporations and government agencies are faced with an increasing need to store this information and do so in a secure manner due to heightened regulatory requirements regarding security and data privacy. These regulatory initiatives include, among others, the Health Insurance Portability and Accountability Act, or HIPAA, the Payment Card Industry Data Security Standard, or PCI DSS, the Federal Information Security Management Act, or FISMA, and the Federal Financial Institutions Examining Council, or FFIEC. As a result of these regulatory requirements, archival and storage systems and the media used to retain the records require increasingly secure facilities with reliable, long-term access and rapid retrieval capabilities. We believe the highly secure and redundant nature of third-party data center facilities makes them uniquely suited to address this need.

Increasing Demand to Outsource it Functions. Data centers are outside of the core competency of many companies and have become increasingly more complex and expensive to design, build and operate. We believe that businesses continue to recognize that outsourcing could improve their cost structure, accelerate the deployment process and lower their overall IT risk. Third-party data center providers often offer superior infrastructure, operational expertise 24 hours/day and 7 days/week, redundancy, service level commitments and access to a diversity of major network carriers.

Businesses are increasingly looking to outsource their IT infrastructure requirements to third-party data center operators. In an August 2011 survey of over 200 data center professionals conducted by Data Center Knowledge, 62% of respondents indicated that they currently outsource or plan to outsource parts of their data center infrastructure. According to International Data Corporation’s 2013 Datacenter Census, the percentage of data center square footage that is outsourced globally to service providers (which include hosting, co-location, outsourcing, cloud as well as service providers’ own business service offerings) increased from 8% in 2010 to 10% in 2012, and is expected to further increase by approximately 80%, from 10% in 2012 to 18% in 2017. The trend toward outsourcing is driven by the following primary factors:

Cost Benefits to Customers . In recent years, the specifications required of data center facilities have been elevated by new technological developments, escalating power and cooling demands, expanding regulatory requirements, increasing dependence on technology for critical business functions 24 hours/day and 7 days/week and the growing need for enhanced connectivity options. Building or upgrading a data center to meet these advanced specifications requires a significant investment of both capital and resources, as well as the personnel cost to deploy, operate and maintain the data center, which could prove to be a significant distraction from a company’s core business operations. Third-party operators can provide customers with benefits including lower utility costs, higher power usage effectiveness and high levels of redundancy and resiliency.

Increased Demand for Flexible and Customized Solutions. When evaluating which third-party data center provider to select, energy efficiency, security, high performing technology and location have become standard elements of any data center solution. Many customers have begun to view offerings such as cloud, managed services and customizable data centers as key differentiators in their selection processes, and this trend is expected to continue. Customers’ needs for such services can evolve quickly, which gives third-party providers that offer a full

112

suite of customized solutions with a distinguishing competitive advantage compared to single-product providers and in-house options.

Attractive Supply / Demand Imbalance

Despite a growing supply of third-party data center capacity, we believe that a supply and demand imbalance currently exists in certain markets for secure, high-quality, high-power, fully redundant facilities. According to 451 Research, average utilization in the top ten U.S. data center markets will increase from 83% in 2012 to 91% in 2014, due to demand growth considerably outpacing supply growth in these markets over that period. We believe this imbalance will persist over the next several years, driven by a number of factors in addition to the industry demand drivers described above, including the following:

High Barriers to Entry. Several factors make it difficult for other companies to enter the data center market. First, we believe that land suitable for data center development with access to sufficient power and significant fiber optic networks is limited. Although there may be an abundance of developable land, finding the right combination of location, power and fiber optic networks to meet the demands of sophisticated customers is a significant challenge. Second, once suitable land has been identified, the upfront costs associated with developing modern data center infrastructure are substantial and almost certainly require access to sources of meaningful debt and equity financing. According to 451 Research, the range of per MW cost estimates for traditional data center builds is approximately $5 million to $28 million per MW (with a median of $15 million per MW). In addition, real estate planning, zoning and permission processes and other potential regulatory obstacles to data center development can be substantial. Third, data center development and expansion require significant knowledge of, and expertise in, data center design and development, IT infrastructure installation, IT management and maintenance, technology service and support, sophisticated electrical, power and cooling systems and physical and network security, which traditional commercial real estate companies do not possess and cannot readily access. The key personnel necessary to develop and maintain data centers have highly sought-after training, combining experience in commercial real estate, data center construction and technology, Internet technology and electrical and mechanical engineering.

In addition, we believe that customers seeking data center space focus intently on the data center provider’s experience, as well as the customer’s ability to grow within the provider’s footprint as the customer’s IT needs grow. When a company is outsourcing the housing of its networking and computer equipment, it is outsourcing a mission-critical component of its business. We believe that existing data center providers that have established reputations and track records can attract new customers more readily than potential new entrants. Together, these factors make it more difficult for new participants to enter this market and reinforce the value proposition of established data center providers.

High Customer Retention. We believe highly specialized data center solutions are not easily replicated. Because data centers typically house customers’ critical networking and computer equipment, the cost, downtime and execution risk incurred by a customer in relocating its equipment to another location are substantial. As data center providers deepen their relationships with their customers through cloud and managed services offerings, we believe customers will generally refrain from changing data center facilities unless their needs outgrow the available rentable square footage and/or power and cooling capacity at their existing data center or the service provider underperforms. Due to the mission-critical nature of this equipment, we believe customers generally prefer maintaining long-term relationships with data center operators that have proven to be historically reliable and provide superior customer service. Therefore, we believe that data centers are generally less susceptible to customer relocations and that customer retention in the data center industry is higher than in more traditional forms of real estate, such as office or retail.

113

BUSINESS AND PROPERTIES

Overview

We are a leading owner, developer and operator of state-of-the-art, carrier-neutral, multi-tenant data centers. Our data centers are facilities that house the network and computer equipment of multiple customers and provide access to a range of communications carriers. We have a fully integrated platform through which we own and operate our data centers and provide a broad range of IT infrastructure solutions. We refer to our spectrum of core data center products as our “3Cs”, which consists of Custom Data Center, Colocation and Cloud and Managed Services. According to 451 Research, we are the only national multi-tenant data center provider to offer a full complement of solutions catering to a broad range of customers, which includes wholesale data center, colocation, interconnection and hosting and/or cloud services. We believe that we own and operate one of the largest portfolios of multi-tenant data centers in the United States, as measured by gross square footage, and have the capacity to almost triple our leased raised floor square footage without constructing any new buildings.

We operate a portfolio of 10 data centers across seven states, located in some of the top U.S. data center markets plus other high-growth markets. We own two of the largest multi-tenant data centers in the world, including the fifth largest data center in the world according to a Forbes magazine article published in November 2012. Our data centers are highly specialized, full-service, mission-critical facilities used by our customers to house, power and cool the networking equipment and computer systems that support their most critical business processes. We believe that our data centers are best-in-class and engineered to among the highest specifications commercially available to customers, providing fully redundant, high-density power and cooling sufficient to meet the needs of major national and international companies and organizations. This is in part reflected by our operating track record of “five-nines” (99.999%) reliability and by our diverse customer base of more than 870 customers, including financial institutions, healthcare companies, government agencies, communications service providers, software companies and global Internet companies.

History of Our Company and Our Founder

Chad L. Williams, our Founder, Chairman and Chief Executive Officer, has more than 24 years of experience in the development and management of private companies, including eight years owning and operating data centers, both as our Chief Executive Officer and previously as Chief Executive

114

Officer of the Quality Group of Companies, L.L.C., or QGC. During the past 24 years, Mr. Williams transformed QGC into a multifaceted organization with a national property portfolio centered on the development of special-use, mission-critical facilities.

In 2003, Mr. Williams leveraged his experience developing, owning and managing mission-critical facilities and began acquiring data centers with the strategy of building a national presence to provide this type of facility. Under Mr. Williams’ leadership and through a series of acquisitions, the business grew from operating a single facility to a national and fully integrated data center platform. In 2005, affiliates of QGC acquired an approximately 367,000 gross square foot data center property in Suwanee, Georgia, which we consider one of our flagship properties. After the acquisition of Suwanee, affiliates of QGC acquired an approximately 969,000 gross square foot data center in Atlanta, Georgia in 2006 and an approximately 135,000 gross square foot data center in Santa Clara, California in 2007. After the acquisition of these data centers, affiliates of QGC, and later we, continued to acquire, either through individual property acquisitions or corporate transactions, ownership or operation of additional data centers. Today, under Mr. Williams’ leadership, we operate 10 data center facilities totaling approximately 3.8 million gross square feet. Mr. Williams’ vision of obtaining and revitalizing large, scalable properties in growing data center markets has become the cornerstone of our business strategy. The ownership of mega data centers allows us to provide Custom Data Center, Colocation and Cloud and Managed Services. We believe that our fully integrated platform of 3Cs has been valuable in obtaining new customers in markets across the United States.

In 2009, Mr. Williams partnered with General Atlantic LLC, which provided us with growth equity capital, and our operating partnership was formed. Established in 1980, General Atlantic LLC is a global growth equity firm providing capital and strategic support for growth companies. As of June 30, 2013, General Atlantic LLC managed approximately $17 billion in capital (comprised of both total committed capital and portfolio investments) and has more than 70 investment professionals based in Greenwich, New York, Palo Alto, São Paulo, London, Munich, Hong Kong, Beijing, Singapore and Mumbai.

Our Platform and Product Offerings

Starting in 2005, we recognized that organizations need access to a comprehensive set of IT infrastructure solutions to support both legacy and emerging IT applications. With this in mind, we have built over the last several years a fully integrated platform that offers a unique and comprehensive portfolio of data center products that allows us to meet the IT infrastructure needs of our customers. From the largest custom data center space requirements, to colocation leasing, to cloud and managed services, we strive to meet our customers’ existing needs while providing the products and solutions that enable them to grow within our platform.

115

The diagram below shows what one of our typical data centers looks like:

LOGO

We believe that our fully integrated platform—which combines the ownership and operation of data centers with a broad range of IT infrastructure solutions—sets us apart from our competitors in the data center industry and makes our offerings more attractive to customers. Our spectrum of core data center products, our 3Cs, consists of Custom Data Center, Colocation and Cloud and Managed Services. By offering all of these products, we believe that we capture a larger addressable market and that our platform is particularly attractive to customers who anticipate future growth and/or evolving technology needs, but would like to remain with a single provider.

Custom Data Center (C1) . Our Custom Data Center, or C1, product features large, private spaces with scalable, highly resilient and redundant metered power configurations designed to specific, individual customer requirements. The C1 product is, in effect, a “data center within a data center.” Our customized data center space houses customer-critical IT infrastructure and we believe provides our customers with a cost-effective, efficient and low-risk alternative to building, buying or expanding their own data centers. This product also gives our customers added financial and contractual flexibility for power and space by leveraging the scale, design and flexibility of our data centers. In addition to their customized space, our C1 customers also may elect to use any of our Managed Services to support their infrastructure and IT needs. Customers who lease our Custom Data Center space generally enter long-term leases of five to ten years, occupy at least 3,300 square feet of raised floor (and can occupy tens of thousands of square feet) and generally utilize 500 kW or more of power. Custom Data Center customers typically enter into an agreement that provides for a metered power solution. These customers reimburse us for their actual direct power use plus a power utilization efficiency, or PUE, factor to reimburse the utility costs associated with cooling the data center facility, in addition to reimbursements for other related operating expenses. As of June 30, 2013, our Custom Data Center product represented approximately 38% of our MRR.

Colocation (C2). Our Colocation, or C2, product features data center space in the form of leased cages, cabinets or suites, which typically provide smaller amounts of space than our

116

C1 product, to house customer IT infrastructure. Our Colocation product offers the option of both metered and non-metered power. Our non-metered power Colocation customers generally enter into a gross lease with a fixed monthly payment that includes all utility and other operating costs and a standard term of three years. Similar to our other products and services, our Colocation product is scalable to meet customers’ IT requirements and provides them with a flexible IT solution and ample expansion options in a stable and secure environment. As with our C1 customers, Colocation customers may elect to use our Cloud and Managed Services to support their IT infrastructure needs. We generally realize higher revenues per leased raised floor square foot with C2 customers compared to C1 customers because of higher utilization levels of our Managed Services, retail compared to wholesale pricing given the relative sizes of the leases, reimbursement for power and other operating expenses that is included within rental revenue for non-metered power customers and as compensation for reduced space utilization due to common areas between C2 customers within a given data center room. As of June 30, 2013, our Colocation product represented approximately 51% of our MRR.

Cloud and Managed Services (C3). We offer our Cloud and Managed Services, or C3, products through a portfolio of highly secure, regulatory compliant and scalable IT infrastructure and services to support varied business applications and requirements. As of June 30, 2013, our Cloud and Managed Services products represented approximately 11% of our MRR. Our C3 products include:

•

Cloud . Our Cloud product offers a private cloud solution through QTS Cloud Pods, which are installed in our mega data centers adjacent to the interconnect hubs in each facility. Each pod consists of three racks that occupy 75 square feet of raised floor and draw 18 kW of power, offering 1 Gbps connectivity and 50 TBs of storage. A single Cloud Pod supports over 40 virtual machines, and is designed to serve, on average, 3-4 customers, typically under a three-year lease. We also offer our Cloud customers additional features including specialized storage and security and regulatory compliance capabilities, and we build custom Cloud Pods for customer-specific requirements. Our Cloud growth strategy includes leveraging our infrastructure to increase capacity within each Cloud Pod and enabling rapid expansion through the build-out of additional Cloud Pods.

Cloud customers are typically looking for a minimal amount of data center capacity with the flexibility to increase their capacity based on the rapidly-evolving requirements of their businesses. In our Cloud Pods, customers can run their application software on our highly reliable and flexible systems and hardware, thereby eliminating capital expenses and reducing operational costs associated with owning and operating their own equipment and hardware. We differentiate our Cloud product through our ability to customize our offering to address a broad range of customer requirements, including dedicated infrastructure, security needs and compliance standards, such as HIPAA and PCI DSS. In contrast, other large cloud companies, such as Amazon Web Services, offer off-the-shelf services that are not customized to the specific needs of individual customers and which generally consist of smaller, short-term commitments from the customer. Examples of our Cloud customers and how they use our product include: hosting services for healthcare software-as-a-service companies, e-mail archiving for a federal government agency, disaster recovery for a financial services company and dedicated infrastructure for a healthcare services provider. As of June 30, 2013, the median MRR among our Cloud customers was more than $7,000, or more than $84,000 in annualized rent.

•

Managed Services . Our Managed Services are support services that include the management of networks, security, operating systems and data back-up, as well as applications monitoring and testing. These offerings may be combined with any of our C1, C2 and other C3 products. Many customers who use our products are seeking a highly secure IT infrastructure solution that allows them to efficiently and flexibly add new

117

services as their needs evolve, without having to find new providers or build new in-house infrastructure.

Our 3Cs product offerings also provide robust carrier-neutral connectivity and interconnection in a secure and regulatory compliant environment. We offer our customers hundreds of carrier alternatives in addition to a full range of interconnection and IP bandwidth options. As a result, our customers benefit from our ability to create data center “ecosystems” within individual data centers and interconnections between one or more data centers, thereby enabling their critical data transactions to be fast, reliable and secure. We offer a comprehensive, integrated solution to provide security and safety for our customers’ physical and virtual assets and we strive to be a leader in security and regulatory compliance among data center providers. We have a dedicated compliance team, focused on monitoring, testing, maintaining and expanding the proper systems and procedures necessary to comply with a growing list of mandated regulations, including HIPAA, FISMA, PCI DSS and the Sarbanes-Oxley Act of 2002. Our audit and control teams work with each customer to ensure relevant compliance for business and customers. In addition, we offer a range of compliance-related services to our customers, including physical asset protection, security and surveillance, virtual asset protection, and forensics detection, and offer a sensitive compartmented information facility, or SCIF, for our government customers.

Our Sales Team

We deliver our product offerings primarily through an internal sales and marketing organization comprised of more than 70 people that have in-depth knowledge of our customers’ businesses and IT needs. We believe we differentiate ourselves from several of our competitors, which primarily depend upon data center brokers, by focusing on delivering superior value to our customers. This is accomplished through solutions tailored to meet the specific needs of our customers, and understanding and anticipating our customers’ future IT needs. In the past several years, we have been building and reorganizing our sales, systems engineering and marketing teams, which allows us to deliver a premium customer experience. We believe this premium customer experience should allow us to keep rental churn rate levels low, grow and expand revenue from existing customers and help attract new customers. We also believe that we have sufficient resources available to pursue our business and growth strategies and as we continue to grow our C3 segment, we may look to add additional resources to the Cloud and Managed Services team. Our internal sales organization is structured by product offering (C1, C2 and C3), by specialized industry segment, such as government and healthcare, and with respect to our C2 product, by geographic region. Our internal sales and marketing effort is complemented by a channels and partner team focused on delivering incremental revenue through business partners who refer and resell our products and services. This team leverages business partners to create additional awareness of our 3Cs product offerings and provide greater geographic sales coverage. Our sales team is supported by sophisticated sales management, reporting and incentive systems—all designed to attract new customers and deepen our relationship with current customers. We believe that our overall sales and marketing approach is important to executing our business and growth strategies and provides us with a competitive advantage.

Our Customer Base

We provide data center solutions to a diverse set of customers. Our customer base is comprised of companies of all sizes representing an array of industries, each with unique and varied business models and needs. We serve Fortune 1000 companies as well as SMBs, including financial institutions, healthcare companies, government agencies, communications service providers, software companies and global Internet companies. As of June 30, 2013 and including our booked-not-billed MRR balance as of that date, Fortune 1000 and equivalently-sized private and/or foreign companies accounted for approximately 57% of our MRR balance. Additionally, six of the top ten Fortune 500 telecommunications companies and three of the top fifteen Forbes Global 2000 technology companies are customers of ours.

118

Our C1 customers typically are large enterprises with significant IT expertise and specific IT requirements, including financial institutions, “Big Four” accounting firms and the world’s largest global Internet companies. Our C2 customers consist of a wide range of organizations, including major healthcare, telecommunications and software and web-based companies. Our C3 Cloud customers include both large organizations and SMBs seeking to reduce their capital expenditures and outsource their IT infrastructure on a flexible basis. Examples of current C3 Cloud customers include a global financial processing company, a U.S. government agency and an educational software provider.

As a result of our diverse customer base, customer concentration in our portfolio is limited. As of June 30, 2013, only three of our more than 870 customers individually accounted for more than 3% of our MRR, with no single customer accounting for more than 8% of our MRR. In addition, approximately 38% of our MRR was attributable to customers who use more than one of our 3Cs products.

Our Competitive Strengths

We believe that we are uniquely positioned in the data center industry and distinguish ourselves from other data center providers through the following competitive strengths:

Fully Integrated Platform Offers Scalability and Flexibility to Our Customers and Us. Through our differentiated, fully integrated 3Cs approach, we deliver products and solutions in each key market segment of the data center services industry, setting us apart from our competitors and allowing us to serve a wider variety of customers in a larger addressable market than data center providers who have a narrower product offering. We believe that customers who are looking to outsource their IT solutions usually anticipate future growth and/or evolving technology needs and prefer to remain with a single provider. Through our differentiated fully integrated 3Cs approach, we are able to scale to the level of IT infrastructure outsourcing desired by our customers while providing customized solutions consisting of any combination of our core product offerings. Organizations of all sizes, from small businesses to the largest global Internet companies, are able to grow within our infrastructure.

Our 3Cs product offerings also provide us flexibility to configure our data center space to optimize cash flows. We believe our ability to offer a full spectrum of 3Cs product offerings across a national portfolio enhances our leasing velocity, allows for an individualized pricing mix that delivers value to our customers and optimizes cash flows from our assets. Our 3Cs approach also provides us with more flexibility to configure our data center space and results in more balanced lease terms. Our C1 customers typically require more power and enter into longer leases, while our C2 and C3 customers generally generate higher revenue per leased square foot.

As an example, one of our financial services customers has been able to take advantage of both our national portfolio and our flexible, customized offerings by utilizing multiple 3Cs products and expanding across our national footprint, as presented below.


Recognized MRR By Facility for Financial Services Customer ($ in millions)
	For the Three Months Ended December 31,		For the Year Ending December 31,
Year	2011		2012		2013*
Atlanta Metro	$	0.1	$	1.4	$	1.5
Richmond		—		0.6		1.0

Total	$	0.1	$	2.0		2.5

* Includes future revenues contracted as of June 30, 2013.

119

Platform Anchored by Strategically Located, Owned “Mega” Data Centers. Our larger “mega” data centers, Atlanta Metro, Dallas, Richmond and Suwanee, allow us to deliver our fully integrated platform and 3Cs products by building and leasing space more efficiently than in single-use or smaller data centers. We believe that our data centers are engineered to among the highest specifications commercially available and provide fully redundant, high-density power and cooling sufficient to meet the needs of major national and international companies. Our national portfolio of 10 multi-tenant data centers is strategically located in nine metropolitan areas, including four of the nation’s top multi-tenant data center markets (Atlanta, Dallas, New York/New Jersey and Silicon Valley), as defined by 451 Research, along with three metropolitan areas that we believe represent high-growth data center markets (Miami, Richmond and Sacramento). According to 451 Research, we are the largest multi-tenant data center operator in the Atlanta market by operating square footage. As of June 30, 2013, over 81% of our MRR was derived from our data centers in the top multi-tenant data center markets in the United States.

As an example, one of our Internet customers has taken advantage of the scalability offered by our “mega” data centers by expanding its footprint on numerous occasions since entering our platform in 2011. This customer has contracted to significantly expand its power and space usage at our Atlanta Metro facility, as presented below.


Recognized MRR By Facility for Internet Customer ($ in millions)
	For the Three Months Ended December 31,		For the Year Ending December 31,
Year	2011		2012		2013*		2014*
Atlanta Metro	$	0.3	$	4.2	$	8.7	$	16.0

Includes future revenues contracted as of June 30, 2013.

Each of our properties is located near major fiber optic networks, and all of our mega data centers are located near large sources of power. Access to reliable power supplies allows us to provide the electrical capacity sufficient to meet the needs of our existing customers, while providing significant room for expansion within our current facilities. Particularly in our Richmond and Atlanta markets, we believe customers are drawn to the favorable cost of power compared to other markets that they may also consider. In addition, most of our properties are in close proximity to large population centers, which enhances performance by reducing latency (the time it takes for information originating from our data centers to reach the end user). Our national footprint and coast-to-coast

120

market presence allows us to not only leverage the increased demand for data center space, but also provides interconnectivity among most of our data centers. In addition, we believe that our overall geographic diversification minimizes the risks associated with regional economic downturns or natural disasters in any one market in which we operate.

We own approximately 92% of the gross square footage of our properties. We believe ownership of our data centers provides us with certain significant advantages compared to the leasing of data center facilities. As an owner, we can efficiently utilize our facilities and make necessary adjustments based on customer demand, including expansions without needing to obtain landlord consent. Also as an owner, we can realize returns from investment in our infrastructure without the risk that these improvements will be lost upon a lease termination or expiration. Finally, owning our data centers allows us to enter into customer leases in the most profitable manner, without having to line up the lease term with the term of our underlying facility lease.

Significant Expansion Opportunity Within Existing Data Center Facilities at Lower Costs. We have developed substantial expertise in redeveloping data center facilities through the acquisition and redevelopment of all 10 of our operating facilities, totaling approximately 714,000 NRSF of raised floor as of June 30, 2013. Our data center redevelopment model is primarily focused on redeveloping space within our current facilities, which we believe provides two differentiating elements to our growth strategy. First, we already have significant infrastructure in place, including access to substantial amounts of utility power, which allows us to build additional leasable raised floor at a lower incremental cost compared to ground-up development. As of June 30, 2013, our cost per MW of power in operation was less than $7 million, which compares favorably to the range for traditional data center construction of approximately $5 million to $28 million per MW (with a median of $15 million per MW), as reported by 451 Research. Second, our redevelopment model provides us with the ability to rapidly scale our redevelopment in a modular manner to coincide with customer acquisition and our estimates of optimal product utilization among our C1, C2 and C3 products, rather than requiring large up-front capital commitments. Furthermore, expanding our existing data center facilities subjects us to fewer development risks than those associated with ground-up development, such as the inability to obtain necessary zoning, occupancy, land use and other governmental permits, liabilities for clean-up of undisclosed environmental contamination and unanticipated costs associated with obtaining access to a sufficient amount of power from local utilities.

Our data center portfolio contains approximately 3.8 million gross square feet of space (approximately 92% of which is wholly owned by us) including approximately 1.8 million “basis-of-design” raised floor square feet, which represents the total data center raised floor potential of our existing data center facilities. This represents the estimated amount of space in our existing buildings that can be leased, depending on the configuration that we deploy. As of June 30, 2013, this space included approximately 714,000 raised floor operating NRSF plus approximately 1.1 million square feet of additional raised floor in our development pipeline. We plan to deliver additional raised floor in a modular manner, including approximately 205,000 NRSF by June 30, 2014. Therefore, we have the capability to almost triple our leased raised floor square footage without constructing or acquiring any new buildings. In addition, we expect to complete the redevelopment of approximately 106,600 NRSF (as part of approximately 198,000 operating NRSF, including office and other space and supporting infrastructure) at our Richmond and Atlanta Metro data center facilities between June 30, 2014 and June 30, 2016. Our facilities collectively have access to over 500 MW of gross utility power with 390 MW of available utility power. We believe such access to power gives us a competitive advantage in redeveloping data center space, since access to power is usually the most limiting and expensive component in data center redevelopment. Our redevelopment model is supported by our in-house redevelopment expertise, which includes experience in commercial real estate, technology and data center construction and engineering. We believe that this in-house expertise gives us a significant advantage over many of our competitors in the redevelopment and acquisition of data

121

centers, including the acquisition of those facilities with a fully-staffed operating platform and managed services business, such as our recently-acquired Sacramento data center.

Diversified, High-Quality Customer Base . Our differentiated, fully integrated platform and state-of-the-art data centers, combined with our reputation for service, have allowed us to build a high-quality customer base. Our largest customers are primarily high credit quality, nationally recognized companies and government agencies. Our diverse group of customers engages in a variety of professional, financial, technological, healthcare and other businesses, and ranges from Fortune 1000 companies to SMBs. As of June 30, 2013, Fortune 1000 and equivalently sized private and or foreign companies accounted for approximately 57% of our MRR, including our booked-not-billed MRR balance as of that date. We have significantly grown our customer base from 510 in 2009 to over 870 as of June 30, 2013, with no single customer accounting for more than 8% of our MRR, and only three of our customers individually accounting for more than 3% of our MRR.

Our customers also are distributed across our full spectrum of 3Cs products, with approximately 38% of our MRR as of June 30, 2013 coming from Custom Data Centers, 51% from Colocation and 11% from Cloud and Managed Services. Moreover, 39% of our customers utilize more than one of our C1, C2 or C3 offerings, based on our MRR as of June 30, 2013. We believe our diverse customer base helps to minimize our exposure to economic fluctuations in any one industry, business sector, geographic region or customer type (C1, C2 or C3), or with respect to any particular customer. Our focus on the customers and our ability to scale with their needs allows us to achieve a low rental churn rate. For the six months ended June 30, 2013, we experienced a rental churn rate of 1.5%.

Robust In-House Sales Capabilities . We have an experienced, in-house sales force that focuses on identifying and acquiring new customers as well as renewing our existing customers through direct selling efforts and customer engagement. Our sales force has deep knowledge of our customers’ businesses and IT infrastructure needs and is supported by sophisticated sales management, reporting and incentive systems. Our internal sales organization is structured by product offerings, specialized industry segments and, with respect to our C2 product, by geographical region. Therefore, unlike certain other data center companies, we are less dependent on data center brokers to identify and acquire or renew our customers, which we believe is a key enabler of our 3Cs strategy. During the past three years, approximately 82% of new customers were identified and acquired solely by our in-house sales force. We have invested significant financial resources in the development of a sales force that can deliver a consistent and appealing marketing message to potential customers and increase the lease-up rate of our data centers. In addition to direct sales efforts, our channels and partner team leverages business partners to identify and retain additional customers. We believe these industry relationships provide an ongoing pipeline of attractive leasing opportunities, and that our fully integrated platform and 3Cs product offerings will allow us to capture a significant number of customers identified through these relationships.

Balance Sheet Positioned to Fund Continued Growth. Upon completion of this offering, our pro forma indebtedness outstanding as of June 30, 2013 will be approximately $315 million, with a weighted average interest rate of 3.24% and a weighted average maturity of 4.6 years. Additionally, we expect to have approximately $ million of cash available on our balance sheet and the ability to borrow up to an additional $350 million under our unsecured revolving credit facility. We believe we will be appropriately capitalized with sufficient funds and available borrowing capacity to pursue our anticipated business and growth strategies. We also have no significant debt maturing until December 2016, assuming exercise of our one-year extension option on our credit facility secured by our Richmond data center .

Founder-Led Management Team with Proven Track Record and Strong Alignment with Our Stockholders. Our senior management team has significant experience in the ownership,

122

management and redevelopment of commercial real estate through multiple business cycles. We are led by Chad L. Williams, our Chairman and Chief Executive Officer, who formed our company in 2003. Under Mr. Williams’ leadership, we acquired, redeveloped and leased our entire portfolio. Our Chief Financial Officer, William Schafer, has over 20 years of experience in the REIT industry, including, prior to joining our company, as the Chief Financial Officer of DDR Corp., a publicly traded REIT. During Mr. Schafer’s tenure at DDR Corp. from April 1992 to February 2010, DDR Corp. raised over $9.5 billion in public capital. In 2012, Dan Bennewitz and Jim Reinhart joined us as Chief Operating Officer – Sales & Marketing and Chief Operating Officer – Operations, respectively. Mr. Bennewitz is responsible for our sales and marketing efforts, having formerly worked over 30 years at IBM Corporation. Mr. Reinhart is in charge of our development and operations efforts. He formerly held executive positions at Genworth Financial, Inc., Capital One Financial Corporation and Hewlett-Packard Company. We believe our executive management team’s experience will enable us to capitalize on industry relationships by providing an ongoing pipeline of attractive leasing and redevelopment opportunities.

As of June 30, 2013, our senior management team was complemented by 71 sales and marketing professionals, an operations team of 278 members and a product and real estate development team of 27 members. Our experienced technology professionals are deployed across our portfolio to best configure, customize and redevelop our data center space to meet changing industry standards and to accommodate our customers’ evolving needs with more flexibility, fewer restrictions and greater long-term security than many of our competitors. Upon completion of this offering, our senior management team is expected to own approximately % of our common stock on a fully diluted basis, and therefore their interests will be highly aligned with those of our stockholders.

Commitment to Sustainability. We have a commitment to sustainability that focuses on managing our power and space as effectively and efficiently as possible. We believe that our continued efforts and proven results from sustainably redeveloping properties give us a distinct advantage over our competitors in attracting new customers. Our facility redevelopment strategy incorporates the reuse of often long-dormant, large facilities, recycling of existing materials and revitalizing our buildings and their surrounding area. Our efforts have resulted in achieving LEED Gold certification for portions of two of our facilities (Atlanta Metro-Phase II and Richmond-Data Center 1), and we have developed special patent-pending technologies designed to maximize space and reduce cooling costs. In 2011, we established the QTS Sustainability and Recoveries program. Through this program, our current schedule of energy efficiency initiatives at select locations includes new data center designs, more efficient equipment, containment solutions and improved operating practices.

Business and Growth Strategies

Continued Redevelopment of Our Existing Footprint . We intend to continue to redevelop additional data center space within our existing portfolio. We believe our redevelopment pipeline provides us with a multi-year growth opportunity at very attractive risk adjusted returns, without the need to construct or acquire new buildings. Our redevelopment pipeline utilizes existing infrastructure that has already been built or acquired and allows us to rapidly scale our redevelopment to coincide with optimal product and customer utilization. Our redevelopment pipeline includes build-outs at seven of our existing data centers with a total available square feet for redevelopment of approximately 2.2 million square feet, including approximately 160 MW of incremental power and approximately 1.1 million potential square feet of raised floor

123

space, which would allow us to almost triple our leased raised floor square footage without constructing or acquiring any new buildings. Currently, we have redevelopment projects under construction at seven data centers that, when completed, will add approximately 205,000 additional square feet of raised floor by June 30, 2014, and we expect to complete the redevelopment of approximately 107,000 additional square feet of raised floor between June 30, 2014 and June 30, 2016. We currently target a stabilized return on invested capital of at least 15% on average for our redevelopment projects.

Increase Cash Flow of Our In-Place Data Center Space. We seek to increase cash flow by proactively managing, leasing and optimizing space, rent and occupancy levels across our portfolio. We proactively manage our rent roll and maintain regular communications with our customers to understand their growing and changing IT needs. Over the past few years, we have reclaimed space that we have re-leased at higher rates. For example, we recently renegotiated the lease arrangements of a large customer occupying space at both our Atlanta Metro and Suwanee properties that was underutilizing a portion of its space and power at rental rates significantly below current market rates. As part of the renegotiation, the customer consolidated its data center space into Atlanta Metro and returned approximately 80,000 square feet of raised floor at our Suwanee data center. As of June 30, 2013, we had re-leased approximately 13,500 square feet of this raised floor at a total rent of just under 50% of the rent that the prior customer had been paying for the entire space.

We also have the ability to increase both our revenue and cash flow by leasing additional space and power to new and existing data center customers. As of June 30, 2013, our existing data center facilities had approximately 99,000 square feet of raised floor available for lease. We believe this space, together with available power, provides us an opportunity to generate incremental revenue without extensive capital expenditures. Our fully integrated in-house sales team, as well as our deep industry relationships, provide an ongoing pipeline of attractive leasing opportunities, which we believe provides us with the opportunity to increase the leasing velocity in our properties. For the first six months of 2013, we added 80 new customers to our platform.

Expand Our Cloud and Managed Services Product Offerings . We intend to continue to expand our C3 product offerings and penetration by providing self-service and automation capabilities and targeting both new and existing customers, as our Cloud and Managed Services products can be used as an alternative to, or in conjunction with, our C1 and C2 products. Through our C3 product offerings, we believe that we will be able to capture a larger addressable market, provide more products to our existing customers, increase our ability to retain customers and increase cash flow from our properties.

Increase Our Margins Through Our Operating Leverage. We are in a high-growth stage, as is evidenced by our 31% growth in revenue from 2010 to 2012 (on a pro-forma basis). In order to implement our business and growth strategies, we have already invested a significant amount of resources to build our physical and corporate infrastructure. As a result of this investment and our growth, in 2011 and 2012, 100% of our incremental revenue was reflected in our property-level net operating income. Moreover, we anticipate that our business and growth strategies can be substantially supported by our existing platform, will not require significant incremental general and administrative expenditures and will allow us to continue to benefit from operational leverage and increase operating margins going forward. This operational leverage was demonstrated historically by a 73% growth in Adjusted EBITDA from 2010 to 2012 (on a pro-forma basis).

Selectively Expand Our Fully Integrated Platform to Other Strategic Markets . We will opportunistically pursue attractive opportunities to expand our fully integrated platform to other high-demand markets. As opportunities arise, we intend to selectively acquire data centers in strategic locations where there is an undersupply of data centers. We believe we can utilize our industry relationships and expertise in acquisitions, redevelopment and leasing to identify

124

acquisition opportunities where our fully integrated platform would give us a competitive advantage in the acquisition and leasing of that facility or portfolio of assets. We also believe we can integrate additional data center facilities into our platform without adding significant incremental headcount or general and administrative expenses. Our recent Sacramento acquisition reinforced the benefits that our multi-faceted, national platform provides to our acquisition strategy. Even though we had not previously operated a property in the Sacramento market, we have been able to operate and manage the property without needing to make significant additions to our corporate or regional-level staff because we already had the West Coast presence and corporate staff needed to support this property. We also believe that our multitude of product offerings contributed to our competitive advantage over other potential buyers in pursuing this opportunity and allowed us to acquire the property at an attractive price; many of the customers at the property at the time of our acquisition utilized managed services, thus making us more natural buyers than, and limiting competition from, other operators who did not already have the platform in place to service the needs of the property’s customers.

Our Initial Portfolio

We operate 10 data centers located in seven states, containing an aggregate of approximately 714,000 raised floor operating NRSF with 390 MW of available utility power. Our properties contain approximately 33,000 square feet of office and other space. Our properties also contain approximately 2.2 million square feet that is available for redevelopment, including approximately 1.1 million square feet that is available to be fully redeveloped into raised floor, of which approximately 312,000 NRSF of raised floor is expected to become operational by June 30, 2016.

We own eight of our 10 data centers (representing approximately 92% of our gross square footage as of June 30, 2013), one of which is pursuant to a long-term ground lease, and have entered into operating leases for our other two data centers. At the data centers located on each of our properties, whether owned or leased by us, we provide full-service facilities used by our customers to house, power and cool the networking equipment and computer systems that support many of their most critical business processes, as well as additional services. We believe that our properties are fully suitable and adequate for their current use. Our data center facilities generally contain the following key elements:

fully redundant, high-density power and cooling;

numerous telecommunications networks that provide service to, and interconnect with, the facility;

an HVAC system that provides an optimal environment for technology equipment;

advanced smoke, heat and fire suppression systems;

physical security that includes one or more of the following: digital video surveillance cameras, electronic access cards, biometric retina and fingerprint authentication scanners, around-the-clock security guards and a camera system, allowing various layers of secured access for our customers; and

monitoring by on-site engineers (or engineers available by pager) and critical power systems, temperature and humidity monitored by automated management systems.

125

Operating Properties

The following table presents an overview of the initial portfolio of operating properties that we own or lease, based on information as of June 30, 2013:


					Operating Net Rentable Square Feet (Operating NRSF)(3)											Annualized Rent(8)		Available Utility Power (MW)(9)		Total Available for Redevelopment (NRSF)(10)
Property	Year Acquired(1)		Gross Square Feet(2)		Raised Floor(4)		Office & Other(5)		Supporting Infrastructure(6)		Total		% Leased(7)			Annualized Rent(8)		Available Utility Power (MW)(9)		Total Available for Redevelopment (NRSF)(10)
Richmond, VA		2010		1,318,353		59,930		27,214		91,342		178,486		89.7	%	$	12,319,848		110		1,084,759
Atlanta, GA (Metro)		2006		968,695		358,016		24,851		305,291		688,158		84.9	%		60,572,339		72		237,270
Dallas, TX*		2013		698,000		—		—		—		—		N/A			—		140		698,000
Suwanee, GA		2005		367,322		140,422		4,368		101,191		245,981		67.1	%		36,665,202		36		74,000
Santa Clara, CA**		2007		135,322		55,494		945		45,721		102,160		88.6	%		18,778,846		11		22,000
Jersey City, NJ***		2006		122,448		29,064		14,220		35,387		78,671		88.7	%		8,528,583		7		25,660
Sacramento, CA		2012		92,644		45,595		3,592		27,100		76,287		60.7	%		11,739,426		8		9,423
Overland Park, KS***		2003		32,706		2,493		—		5,338		7,831		78.3	%		604,201		1		—
Miami, FL		2008		30,029		19,887		—		6,592		26,479		51.9	%		3,479,738		4		—
Wichita, KS		2005		14,000		2,612		2,854		8,534		14,000		100.0	%		222,120		1		—

Total/weighted average				3,779,519		713,513		78,044		626,496		1,418,053		81.0	%	$	152,910,303		390		2,151,112

*	This facility was acquired in February 2013 and is under redevelopment.

**	Owned facility subject to long-term ground sublease.

***	Represents facilities that we lease.

(1)	Represents the year a property was acquired or, in the case of a property under lease, the year our initial lease commenced for the property.

(2)

(3)	Represents the total square feet of a building that is currently leased or available for lease plus developed supporting infrastructure, based on engineering drawings and estimates, but does not include space held for redevelopment or space used for our own office space.

(4)	Represents management’s estimate of the portion of operating NRSF of the facility with available power and cooling capacity that is currently leased or readily available to be leased to customers as data center space based on engineering drawings, inclusive of raised floor common areas.

(5)	Represents the operating NRSF of the facility other than data center space (typically office and storage space) that is currently leased or available to be leased.

(6)	Represents required data center support space, including mechanical, telecommunications and utility rooms, as well as building common areas.

(7)

(8)

Annualized rent is presented for leases commenced as of June, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases (which represent customer leases that have been executed but for which lease payments have not commenced) as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(9)	Represents installed power capacity that can be delivered to the facility by the local utility providers. As of June 30, 2013, 117 MW of the total available utility power could be delivered to the data center floor for customer use.

(10)	Reflects space under roof that could be developed into operating NRSF in the future, excluding space currently used by us for our own office space, which could also be repurposed in the future.

Note: The information above excludes our approximately 35,000 gross square foot facility at Lenexa, Kansas, which is not an operating data center.

126

Redevelopment Pipeline

The following table presents an overview of our redevelopment pipeline, based on information as of June 30, 2013. We are in various phases of redevelopment with regards to seven of our existing data center properties: Richmond, Atlanta Metro, Dallas, Suwanee, Santa Clara, Jersey City and Sacramento.


	Redevelopment NRSF
	Under Construction(1)								Near Term(2)						Future Available(3)
Property	Raised Floor		Office & Other		Supporting Infrastructure		Total Under Construction		Raised Floor		Office/Other/ Supporting Infrastructure		Total Near Term		Raised Floor		Office/Other/ Supporting Infrastructure		Total Future Available		Total Available for Redevelopment (NRSF)
Richmond		78,000		5,000		45,320		128,320		44,000		63,300		107,300		373,000		476,139		849,139		1,084,759
Atlanta Metro		35,000		5,270		—		40,270		62,600		27,800		90,400		71,600		35,000		106,600		237,270
Dallas		26,000		22,000		30,600		78,600		—		—		—		236,000		383,400		619,400		698,000
Suwanee		45,000		—		—		45,000		—		—		—		29,000		—		29,000		74,000
Santa Clara		12,000		—		—		12,000		—		—		—		10,000		—		10,000		22,000
Jersey City		—		—		4,419		4,419		—		—		—		21,241		—		21,241		25,660
Sacramento		9,000		—		—		9,000		—		—		—		423		—		423		9,423

Totals		205,000		32,270		80,339		317,609		106,600		91,100		197,700		741,264		894,539		1,635,803		2,151,112

(1)	Reflects NRSF at a facility which we expect will be operational by June 30, 2014.

(2)	Reflects NRSF at a facility which we expect will be operational between June 30, 2014 and June 30, 2016. Redevelopment of certain of this space is at our discretion and will depend on a number of factors, including our estimate of the demand for data center space in the applicable market.

(3)

Reflects NRSF at a facility which we expect to redevelop in the future, but at this time such space is expected to be operational after June 30, 2016. The redevelopment of this space is at our discretion and will depend on a number of factors, including availability of capital and our estimate of the demand for data center space in the applicable market.

The table below sets forth our estimated costs for completion of our seven redevelopment projects currently under construction and expected to be operational by June 30, 2014 (dollars in millions).


	Under Construction Costs
Property	Actual(1)		Estimated Cost to Completion(2)		Total		Expected Completion Date
Richmond	$	53	$	25	$	78		Q2 2014
Atlanta Metro		7		47		54		Q2 2014
Dallas		5		83		88		Q2 2014
Suwanee		11		5		16		Q3 2013
Santa Clara		3		25		27		Q2 2014
Jersey City		0.3		3		4		Q4 2013
Sacramento		3		7		10		Q3 2013

Totals	$	82	$	195	$	277

(1)	Actual costs incurred for NRSF under construction through June 30, 2013 (excluding acquisition costs).

(2)	Represents management’s estimate of the additional costs required to complete the current NRSF under construction. There may be an increase in costs if customers require greater power density.

In addition to the raised floor square feet that is scheduled to be completed by June 30, 2014, as noted above, we expect to complete the redevelopment of approximately 106,600 square feet of additional raised floor (as part of approximately 197,700 operating NRSF, including office and other space and supporting infrastructure) at our Richmond and Atlanta Metro data center facilities between June 30, 2014 and June 30, 2016. These near term redevelopment projects are expected to be delivered in a modular manner, and we currently expect to invest between $110 to $155 million of additional capital to complete these projects.

127

The cost estimates for our redevelopment projects are based on our current budgets (which do not include tenant improvement and leasing commission costs) and are subject to change. Our redevelopment plans for each of these facilities have taken substantial time to design and implement due to many factors, including the overall scale of the projects, the market timing of leasing raised floor to existing and prospective customers and our desire to minimize existing customer disruptions. There can be no assurance that actual costs will not exceed estimates or that the redevelopments will be completed by the estimated dates.

As noted above, our redevelopment plan also allows for an additional approximately 0.7 million square feet of raised floor at seven of our data centers (as part of approximately 1.6 million total operating NRSF, including office and other space and supporting infrastructure). As of June 30, 2013, we had commenced certain pre-development activities with respect to these future redevelopment projects, but the ultimate timing and completion of, and the commitment of capital to, these projects is within our discretion and will depend upon a variety of factors, including the availability of financing and our estimation of the future demand for data center space in each particular market. These future redevelopment projects would not be expected to be completed by June 30, 2016, and there can be no assurance that any of these redevelopments will be completed.

In addition, we also own approximately 136 acres of vacant land adjacent to our Richmond, Atlanta Metro, Dallas and Suwanee data center properties which can support the development of up to an additional approximately 1.6 million square feet of raised floor. We do not have current plans to develop this vacant land.

128

Customer Diversification

Our portfolio is currently leased to more than 870 customers comprised of companies of all sizes representing an array of industries, each with unique and varied business models and needs. The following table sets forth information regarding the 20 largest customers in our portfolio based on annualized rent as of June 30, 2013:


Principal Customer Industry	Number of Locations		Annualized Rent(1)		% of Portfolio Annualized Rent			Weighted Average Remaining Lease Term (Months)(2)
Internet		1	$	11,087,376		7.3	%		56
Internet		1		7,394,180		4.8	%		63
Information Technology		3		5,271,687		3.4	%		16
Financial Services		1		4,323,540		2.8	%		43
Internet		2		3,471,577		2.3	%		4
Financial Services		2		3,224,909		2.1	%		54
Internet		1		2,608,621		1.7	%		71
Financial Services		2		2,489,066		1.6	%		41
Information Technology		1		2,449,929		1.6	%		12
Professional Services		1		2,402,880		1.6	%		23
Application Software		2		2,149,776		1.4	%		4
Information Technology		2		2,142,072		1.4	%		63
Telecommunications		1		2,056,278		1.3	%		34
Professional Services		1		1,924,800		1.3	%		89
Media		1		1,884,280		1.2	%		3
Internet		1		1,883,877		1.2	%		24
Telecommunications		1		1,746,127		1.1	%		25
Government		1		1,680,000		1.1	%		50
Communications Equipment		2		1,504,200		1.0	%		42
Application Software		1		1,469,614		1.0	%		19

Total/Weighted Average			$	63,164,790		41.3	%		41

(1)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(2)	Weighted average based on customer’s percentage of total annualized rent expiring as of June 30, 2013.

129

The following chart shows the breakdown of all our customers by industry based on annualized rent as of June 30, 2013:


Industry		% of Total Annualized Rent as of June 30, 2013
Technology		37%
Finance		15%
Business Services		13%
Telecommunications		12%
Manufacturing		4%
Government		4%
Retail		3%
Healthcare		3%
Other		9%

Total		100%

Lease Distribution by Product Type

The following table sets forth information relating to the distribution of leases at our properties, by type of product offering, as of June 30, 2013:


Product Type (Square Feet)(1)	Total Leased Raised Floor(2)		% of Portfolio Leased Raised Floor			Annualized Rent(3)		% of Portfolio Annualized Rent
Cloud Infrastructure		1,144		0	%	$	13,749,443		9	%
Colocation Cabinets and Cages (up to 3,300)		139,230		33	%		95,021,370		62	%
Custom Data Center (3,300 or greater)		283,233		67	%		44,139,490		29	%

Portfolio Total		423,607		100	%	$	152,910,303		100	%

(1)	Represents all leases in our portfolio for which billing has commenced as of June 30, 2013. Cloud Infrastructure does not include Managed Services for Colocation and Custom Data Center customers.

(2)	Represents the square footage of raised floor at a property under lease as specified in the lease and that has commenced billing as of June 30, 2013.

(3)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

130

Lease Expirations

The following table sets forth a summary schedule of the lease expirations as of June 30, 2013 at the properties in our portfolio. Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and all early termination rights are exercised:


Year of Lease Expiration(1)	Number of Leases Expiring(2)		Total Raised Floor of Expiring Leases		% of Portfolio Leased Raised Floor			Annualized Rent(3)		% of Portfolio Annualized Rent
Month-to-Month(4)		283		5,342		1	%	$	6,855,242		4	%
Remainder of 2013		529		59,813		14	%		24,699,945		16	%
2014		836		47,154		11	%		34,981,794		23	%
2015		554		38,679		9	%		27,947,043		18	%
2016		250		30,770		7	%		15,377,888		10	%
2017		58		52,455		12	%		14,467,446		9	%
2018		27		160,433		38	%		20,922,606		14	%
2019		8		11,505		3	%		2,977,261		2	%
2020		23		13,456		3	%		3,324,214		2	%
2021		—		—		—	%		—		—	%
2022		2		4,000		1	%		1,356,864		1	%
2023		—		—		—	%		—		—	%
After 2023		—		—		—	%		—		—	%

Portfolio Total		2,570		423,607		100	%	$	152,910,303		100	%

(1)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement customers with future commencement dates. In these instances, the data is included in the year in which the future lease expires.

(2)	Represents each lease with a customer signed as of June 30, 2013 for which billing has commenced; a lease agreement could include multiple spaces and/or service orders and a customer could have multiple leases.

(3)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect the accounting associated with any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(4)	Consists of customers whose leases expired prior to June 30, 2013 and have continued on a month-to-month basis. We do not typically enter into month-to-month leases.

Description of Our Properties

Richmond

Our Richmond, Virginia data center is situated on an approximately 220-acre site comprised of three large buildings available for data center redevelopment, each with two floors, and an administrative building that also has space available for data center redevelopment. As of June 30, 2013, the data center had approximately 1.3 million gross square feet with approximately 178,000 total operating NRSF, including approximately 60,000 of raised floor operating NRSF. Dominion Virginia Power supplies 110 MW of utility power to the facility, which is backed up by diesel generators. As of

131

June 30, 2013, one of these primary buildings was actively in operation as a data center and the other two were being redeveloped. We believe that our Richmond facility is situated in an ideal location due to its proximity to Washington, DC, which offers numerous sources of demand for our products including the federal government, and provides geographical diversification from the Northern Virginia data center market. There are three core segments that we believe represent the most significant opportunity for our Richmond data center: entities associated with the federal government, given the highly secured nature of this facility and its proximity to Washington, DC; regulated industries, such as financial institutions, given our investments in security and regulatory compliance; and large enterprise customers, given the large scale of this facility. Our Richmond mega data center can accommodate large and growing C1 customers, while also accommodating C2 and C3 customers, at attractive energy costs.

We acquired our Richmond facility in 2010 through a bankruptcy process. We estimate that the former owner, a semiconductor manufacturer, had invested over $1 billion to develop the facility prior to the bankruptcy. Because the facility operated as a semiconductor fabrication facility prior to our acquisition, it had significant pre-existing infrastructure, including 110 MW of utility power, approximately 25,000 tons of chiller capacity, “Class A” private office space and other related supporting infrastructure. As a result, to date the incremental cost to redevelop the facility into a data center has been lower than the typical cost of ground-up data center development or redevelopment of other types of buildings into data centers.

Since acquiring our Richmond facility, we have invested additional capital to redevelop the facility into an operating data center. As of June 30, 2013, our total investment in Richmond data center was $80.0 million, excluding construction in progress. This amount includes approximately $20 million invested in common infrastructure. The property generated $8.6 million of NOI for the trailing 12 months ended June 30, 2013, already representing a 11% yield on our total investment, even though we just initiated the lease up of our Richmond facility in 2011 and made substantial investments in our common infrastructure, including supplying the facility with power and fiber optic networks, some of which we do not expect will be required for future redevelopment of this facility. For the three months ended June 30, 2013, our Richmond facility recorded revenue of $3.4 million and NOI of $2.4 million, representing a 70% NOI margin. MRR grew from approximately $648,000 as of June 30, 2012 to approximately $1,026,000 as of June 30, 2013. In addition, the total booked-not-billed MRR balance at this facility aggregated approximately $134,000 as of June 30, 2013.

As of June 30, 2013, approximately 90% of the facility’s leasable raised floor was leased to 38 customers across our 3Cs product offerings. We are the fee simple owner of the Richmond facility, and the facility is subject to a $100 million secured credit facility, of which $70 million was outstanding as of June 30, 2013. We intend for this debt to remain outstanding upon completion of this offering.

The Richmond facility is included in our redevelopment pipeline, as we plan to expand the facility in multiple phases. Our current under construction and near term redevelopment plans call for the addition of up to approximately 236,000 total operating NRSF, including approximately 122,000 NRSF of raised floor. We anticipate that this expansion will cost (in addition to costs already incurred as of June 30, 2013) approximately $60 million to $70 million in the aggregate based on current estimates. Longer term, we can further expand the facility by another approximately 849,000 total operating NRSF, of which approximately 373,000 NRSF would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 1.3 million total operating NRSF, including approximately 555,000 NRSF of raised floor.

In addition, we own approximately 100 acres of undeveloped land on the site that we estimate could be developed to provide an additional approximately 1.8 million total operating NRSF, of which approximately 1.1 million NRSF would be raised floor. These 100 acres of undeveloped land are not included in our current development plans.

132

Lease Expirations. The following table sets forth a summary schedule of the lease expirations as of June 30, 2013 at the Richmond facility. Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and all early termination rights.


Year of Lease Expiration(1)	Number of Leases Expiring(2)		Total Raised Floor of Expiring Leases		% of Facility Leased Raised Floor			Annualized Rent(3)		% of Facility Annualized Rent
Month-to-Month(4)		4		16		0	%	$	51,360		0	%
Remainder of 2013		5		136		0	%		114,711		1	%
2014		10		72		0	%		92,410		1	%
2015		44		8,411		18	%		2,636,118		21	%
2016		14		392		1	%		406,904		3	%
2017		16		33,595		74	%		7,249,550		59	%
2018		2		3,000		7	%		397,200		3	%
2019		—		—		0	%		—		0	%
2020		20		—		0	%		1,371,595		11	%
2021		—		—		—	%		—		0	%
2022		—		—		—	%		—		0	%
2023		—		—		—	%		—		0	%
After 2023		—		—		—	%		—		0	%

Total		115		45,622		100	%	$	12,319,848		100	%

(1)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement customers with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(2)	Represents each lease with a customer signed as of June 30, 2013 for which billing has commenced; a lease agreement could include multiple spaces and/or service orders and a customer could have multiple leases.

(3)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(4)	Consists of customers whose leases expired prior to June 30, 2013 and have continued on a month-to-month basis. We do not typically enter into month-to-month leases.

133

Primary Customers. The following table summarizes information regarding primary customers, which are customers occupying 10% or more of the leased raised floor of the Richmond facility, as of June 30, 2013:


Principal Customer Industry	Lease Expiration		Renewal Option	Annualized Rent(1)		% of Facility Annualized Rent
Financial Services		2017	1x5 or 10 years	$	4,323,540		35	%
Government		2017	1x5 years		1,680,000		14	%
Information Technology		2020	month-to-month		1,394,695		11	%
Government		2015	month-to-month		1,392,737		11	%

(1)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

Historical Percentage Leased and Annualized Rental Rates. The following table sets forth the leasable raised floor square footage percentage leased, annualized rent and annualized rent per leased raised square foot for our Richmond facility since acquisition:


Date	Facility Leasable Raised Floor		% Leased(1)			Annualized Rent(2)		Annualized Rent per Leased Square Foot
June 30, 2013		50,865		90	%	$	12,319,848	$	270
December 31, 2012		50,665		83	%		10,358,160		247
December 31, 2011		41,249		22	%		1,731,708		191
December 31, 2010		0		0	%		0		0

(1)	Calculated as data center raised floor that is subject to a signed lease for which billing has commenced as of the applicable date, divided by leasable raised floor based on the then current configuration of the property, expressed as a percentage.

(2)

Annualized rent is presented for leases commenced as of the applicable date. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

134

Depreciation. The following table sets forth for the Richmond facility and each component thereof upon which depreciation is taken the (i) federal tax basis upon completion of this offering, (ii) rate, (iii) method, and (iv) life claimed with respect to the property or component thereof for purposes of depreciation:

Federal Tax Basis

(unaudited in millions)

Rate

Method

Life Claimed

$116.9

2.56%

Straight Line

39 Years

The 2012 tax rate for this property was $0.87 per $100 of assessed value, or $142,556 in property taxes for the 2012 tax year. We anticipate that upon completion of the near term portion of our expansion of this facility, the property taxes for this property would be approximately $0.9 million applying the 2012 rate. In the opinion of our management, after completion of this offering, the Richmond facility will be adequately covered by insurance.

Atlanta Metro

Our Atlanta, Georgia facility, or Atlanta Metro, formerly a distribution center for a major retailer, is situated on a 32-acre site in downtown Atlanta, Georgia, was under redevelopment when we acquired it in October 2006. At the time of our acquisition, the facility had approximately 20,000 total operating NRSF in place, including access to 72 MW of utility power. We completed the initial phase of redevelopment in September 2007, and Atlanta Metro is currently our largest data center based on total operating NRSF. As of June 30, 2013, the property consisted of approximately 969,000 gross square feet with approximately 688,000 total operating NRSF, including approximately 358,000 raised floor operating NRSF. An on-site Georgia Power substation supplies 72 MW of utility power to the facility, which is backed up by diesel generators, and the facility has 120 MW of transformer capacity. The facility also includes a small amount of private “Class A” office space. This facility gives us a competitive position in the Atlanta metropolitan area, which is the largest data center market in the Southeast and a growth market for Fortune 500 companies. Atlanta is also home to one of the busiest airports in the world, which makes it easy to reach for customers inside and outside of the Southeast market. According to 451 Research, the Atlanta data center market is expected to experience cumulative demand growth of 84% from 2010 through 2014 compared to 34% supply growth over the same period.

Since acquiring the Atlanta Metro facility, we have invested capital to bring additional raised square footage online. As of June 30, 2013, our total investment in Atlanta Metro was $283.2 million, excluding construction in progress. The property generated $47.7 million of NOI for the 12 months ended June 30, 2013, representing a 17% yield on our total investment. For the three months ended June 30, 2013, the Metro facility recorded revenue of $18.0 million and NOI of $12.8 million, representing a 71% NOI margin. MRR grew from approximately $4.3 million as of June 30, 2012 to approximately $5.0 million as of June 30, 2013. In addition, the total booked-not-billed MRR balance at this facility aggregated approximately $1.4 million as of June 30, 2013.

As of June 30, 2013, approximately 85% of the facility’s leasable raised floor was leased to 199 customers across our 3Cs product offerings. Certain equipment at this facility is subject to an equipment loan, which had a $19.9 million outstanding balance as of June 30, 2013, as described under the caption “—Indebtedness Expected to be Outstanding After the Offering” below. We intend for this debt to remain outstanding upon completion of this offering.

135

raised floor that it is currently occupying. This customer has extended its lease on the remaining approximately 58,000 square feet of its space for an additional five years at a 72% higher rental rate per square foot. The net impact of reclaiming the portion of this customer’s space in our Atlanta Metro data center and the higher rental rate per square foot on the remaining space will be a reduction of MRR of $0.1 million starting in the fourth quarter of 2013. We have already re-leased approximately 85% of the space we will reclaim in Atlanta Metro to an existing customer that will generate $0.5 million of MRR, a portion of which will commence billing in January 2014.

Portions of the Atlanta Metro facility are included in our redevelopment pipeline, as we plan to expand the facility in multiple phases. Our current under construction and near term redevelopment plans call for the addition of approximately 131,000 total operating NRSF, including approximately 98,000 NRSF of raised floor. We anticipate that this expansion will cost approximately $125 million to $145 million in the aggregate based on current estimates (in addition to costs already incurred as of June 30, 2013). Longer term, we can further expand the facility by another approximately 107,000 total operating NRSF, of which approximately 72,000 NRSF would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 925,000 total operating NRSF, including approximately 527,000 NRSF of raised floor.

In addition, this facility is adjacent to six acres of undeveloped land owned by us that we estimate could be developed to provide an additional approximately 262,000 total operating NRSF, of which approximately 162,000 NRSF would be raised floor. These six acres of undeveloped land are not included in our current development plans.

We are the beneficial owner of our Atlanta facility through a bond-financed sale-leaseback structure. This structure is necessary in the State of Georgia to receive property tax abatement. In 2006, the Development Authority of Fulton County, or DAFC, issued a taxable industrial development revenue bond to us in exchange for legal title to the facility. The acquisition of the bond by us was “cashless” as the bond was issued to us in exchange for title to the facility. DAFC leased the facility back to us under a bond lease at a rent equal to the debt service on the bond. The bond lease is a triple net lease, which is standard in conduit financing transactions of this type. The rent under the bond lease payable by us, as lessee, is assigned by DAFC to us, as the bondholder. Because the rent and debt service amounts are equal and offsetting, no cash changes hands between DAFC and us. DAFC is the owner and lessor of the facility, but its rights to receive all rental payments and a security interest in the facility have been pledged to us, as the bondholder, as security for the bond. Therefore, we have complete control over the facility at all times. We have an option to buy the facility for $10 when the bond has been retired (the bond matures on December 1, 2019). If we wish to obtain title earlier, we can do so by simply surrendering and cancelling the bond and paying the $10 option price.

136

Lease Expirations. The following table sets forth a summary schedule of lease expirations for leases in place as of June 30, at the Atlanta Metro facility. Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and all early termination rights.


Year of Lease Expiration(1)	Number of Leases Expiring(2)		Total Raised Floor of Expiring Leases		% of Facility Leased Raised Floor			Annualized Rent(3)		% of Facility Annualized Rent
Month-to-Month(4)		30		928		0	%	$	623,331		1	%
Remainder of 2013		109		40,076		15	%		7,551,424		12	%
2014		246		13,547		5	%		10,055,920		17	%
2015		171		8,562		3	%		6,985,175		12	%
2016		91		16,129		6	%		6,532,383		11	%
2017		22		11,818		5	%		4,505,160		7	%
2018		16		155,813		59	%		19,979,802		33	%
2019		7		11,505		4	%		2,949,661		5	%
2020		2		—		—	%		32,620		0	%
2021		—		—		—	%		—		0	%
2022		2		4,000		2	%		1,356,864		2	%
2023		—		—		—	%		—		0	%
After 2023		—		—		—	%		—		0	%

Total		696		262,378		100	%	$	60,572,339		100	%

(1)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement customers with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(2)	Represents each lease with a customer signed as of June 30, 2013 for which billing has commenced; a lease agreement could include multiple spaces and/or service orders and a customer could have multiple leases.

(3)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(4)	Consists of customers whose leases expired prior to June 30, 2013 and have continued on a month-to-month basis. We do not typically enter into month-to-month leases.

137

Primary Customers. The following table summarizes information regarding primary customers, which are customers occupying 10% or more of the leased raised floor of the Atlanta Metro facility, as of June 30, 2013:


Principal Customer Industry	Lease Expiration			Renewal Option		Annualized Rent(1)		% of Facility Annualized Rent
Internet		2018	(2)		3x5 years	$	11,087,376		18	%
Internet		2018			1x5 years		7,394,180		12	%

(1)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(2)	Reflects renewed lease for reduced raised floor square footage, which will result in an approximately $1.4 million reduction of annualized rent following initial lease expiration in October 2013. As of June 30, 2013, approximately 84% of this space had already been re-leased at higher rental rates.

Historical Percentage Leased and Annualized Rental Rates. The following table sets forth the leasable raised floor, percentage leased, annualized rent and annualized rent per leased raised square foot for the Atlanta Metro facility:


Date	Facility Leasable Raised Floor		% Leased(1)			Annualized Rent(2)		Annualized Rent per Leased Square Foot
June 30, 2013		309,088		85	%	$	60,572,339	$	231
December 31, 2012		273,482		89	%		54,110,376		222
December 31, 2011		286,344		77	%		43,294,272		196
December 31, 2010		197,290		84	%		35,083,656		211
December 31, 2009		178,173		82	%		32,320,572		220
December 31, 2008		178,173		97	%		29,365,752		169
December 31, 2007		165,000		79	%		20,815,594		159

(1)	Calculated as data center raised floor that is subject to a signed lease for which billing has commenced as of the applicable date, divided by leasable raised floor based on the then current configuration of the property, expressed as a percentage.

(2)

138

Depreciation. The following table sets forth for the Atlanta Metro facility and each component thereof upon which depreciation is taken the (i) federal tax basis upon completion of this offering, (ii) rate, (iii) method, and (iv) life claimed with respect to the property or component thereof for purposes of depreciation:


Federal Tax Basis (unaudited in millions)	Rate	Method	Life Claimed
$260.8	2.56%	Straight Line	39 Years

The 2012 tax rate for this property was $2.68 per $100 of assessed value, or $310,629 in property taxes for the 2012 tax year. We anticipate that upon completion of the near term portion of our expansion of this facility, the property taxes for this property would be approximately $1.7 million applying the 2012 rate. In the opinion of our management, after completion of this offering, the Atlanta Metro facility will be adequately covered by insurance.

Suwanee

Our Suwanee, Georgia facility was originally constructed as a mission critical data center in 2000. We acquired the Suwanee facility in September 2005 in connection with the acquisition of a managed colocation, hosting and data storage operating company. Suwanee is situated on a 19-acre site located in close proximity to I-85, approximately 34 miles northeast of downtown Atlanta, Georgia and 30 miles from our Atlanta Metro facility. The facility consists of approximately 367,000 gross square feet, and as of June 30, 2013 it had approximately 246,000 total operating NRSF, including approximately 140,000 raised floor operating NRSF. Georgia Power supplies 36 MW of utility power to the facility, which is backed up by diesel generators. The facility also contains a small amount of “Class A” private office space and our operating service center, which provides 24x7 support to all of our customers and data centers. According to 451 Research, the Atlanta data center market is expected to experience cumulative demand growth of 84% from 2010 through 2014 compared to 34% supply growth over the same period.

Since acquiring the Suwanee facility, we have invested capital to improve and reconfigure the property. As of June 30, 2013, our total investment in Suwanee was $120.4 million, excluding construction in progress. The property generated $27.1 million of NOI for the 12 months ended June 30, 2013, representing a 23% yield on our total investment. For the three months ended June 30, 2013, the Suwanee facility recorded revenue of $9.5 million and NOI of $6.6 million, representing a 70% NOI margin. MRR declined from approximately $3.6 million as of June 30, 2012 to approximately $3.1 million as of June 30, 2013. The decrease in MRR relates to our reclamation of approximately 80,000 square feet from a C1 customer and the subsequent redevelopment of the space to accommodate both C1 and C2 customers, as discussed below. In addition, the total booked-not-billed MRR at this facility aggregated approximately $517,000 as of June 30, 2013.

As of June 30, 2013, approximately 67% of the facility’s leasable raised floor was leased to 273 customers.

In July 2012, we renegotiated the lease arrangements for a large customer which was occupying space in both our Atlanta Metro and Suwanee data centers and was underutilizing a portion of its space and power. As a result of the new arrangement, the customer consolidated its operations into our Atlanta Metro data center and returned approximately 80,000 square feet of raised floor at our Suwanee data center, which we have temporarily reclassified as square feet under redevelopment. Since reclaiming the space and as of June 30, 2013, we had invested approximately $11 million retrofitting and preparing this space to accommodate both C1 and C2 customers. As of June 30, 2013, we had already re-leased approximately 13,500 square feet of this space at a rental amount of just under 50% of the rent the prior customer had been paying for the entire space. We expect to start billing for this space in July 2013.

139

Portions of the Suwanee facility are included in our redevelopment pipeline. Our current under construction redevelopment plans call for the addition of approximately 45,000 total operating NRSF, all of which will be raised floor. We anticipate that the current reconfigurations and expansions described above will cost an additional $5 million to complete. Longer term, we can further expand the facility by an additional 29,000 NRSF of raised floor. Upon completion of the build-out of the facility, we anticipate that it will contain approximately 320,000 operating NRSF, including approximately 214,000 NRSF of raised floor.

In addition, this facility is adjacent to 15 acres of undeveloped land owned by us that we believe could be developed to provide an additional approximately 262,000 total operating NRSF, of which approximately would be 162,000 NRSF of raised floor. These 15 acres of undeveloped land are not included in our current development plans.

Lease Expirations. The following table sets forth a summary schedule of the lease expirations for leases in place as of June 30, 2013 at the Suwanee facility. Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and all early termination rights.


Year of Lease Expiration(1)	Number of Leases Expiring(2)		Total Raised Floor of Expiring Leases		% of Facility Leased Raised Floor			Annualized Rent(3)		% of Facility Annualized Rent
Month-to-Month(4)		65		1,764		4	%	$	2,870,179		8	%
Remainder of 2013		192		5,480		11	%		8,380,921		23	%
2014		201		3,012		6	%		5,855,398		16	%
2015		185		13,368		28	%		11,423,385		31	%
2016		61		2,788		6	%		3,168,225		9	%
2017		15		6,914		14	%		2,518,890		7	%
2018		7		1,620		3	%		528,204		1	%
2019		0		—		0	%		—		0	%
2020		1		13,456		28	%		1,920,000		5	%
2021		—		—		—	%		—		—	%
2022		—		—		—	%		—		—	%
2023		—		—		—	%		—		—	%
After 2023		—		—		—	%		—		—	%

Total		727		48,402		100	%	$	36,665,202		100	%

(1)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement customers with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(2)	Represents each lease with a customer signed as of June 30, 2013 for which billing has commenced; a lease agreement could include multiple spaces and/or service orders and a customer could have multiple leases.

(3)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(4)	Consists of customers whose leases expired prior to June 30, 2013 and have continued on a month-to-month basis. We do not typically enter into month-to-month leases.

140

Primary Customers. The following table summarizes information regarding primary customers, which are customers occupying 10% or more of the leased raised floor of the Suwanee facility, as of June 30, 2013:


Principal Customer Industry	Lease Expiration		Renewal Option		Annualized Rent(1)		% of Facility Annualized Rent
Professional Services		2020		2x5 years	$	2,402,880		7	%
Financial Services		2017		2x5 years		1,924,800		5	%

(1)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.


Date	Facility Leasable Raised Floor		% Leased(1)			Annualized Rent(2)		Annualized Rent per Leased Square Foot
June 30, 2013		72,089		67	%	$	36,665,202	$	758
December 31, 2012		61,000		80	%		34,566,816		712
December 31, 2011		142,145		89	%		40,975,608		325
December 31, 2010		145,440		85	%		40,838,748		330
December 31, 2009		131,433		83	%		41,862,168		383
December 31, 2008		135,827		80	%		41,705,604		384
December 31, 2007		125,558		87	%		33,483,708		305

(1)	Calculated as data center raised floor that is subject to a signed lease for which billing has commenced as of the applicable date, divided by leasable raised floor based on the then current configuration of the property, expressed as a percentage.

(2)

141

Depreciation. The following table sets forth for the Suwanee facility and each component thereof upon which depreciation is taken the (i) federal tax basis upon completion of this offering, (ii) rate, (iii) method, and (iv) life claimed with respect to the property or component thereof for purposes of depreciation:

Federal Tax Basis

(unaudited in millions)

Rate

Method

Life Claimed

$103.2

2.56%

Straight Line

39 Years

The 2012 tax rate for this property is $3.90 per $100 of assessed value, or $294,324 in property taxes for the 2012 tax year. We anticipate that upon completion of the near term portion of our expansion of this facility, the property taxes for this property would be approximately $0.4 million applying the 2012 rate. In the opinion of our management, after completion of this offering, the Suwanee facility will be adequately covered by insurance.

Santa Clara

Our Santa Clara, California facility was acquired in November 2007. The facility, which is owned subject to a long-term ground sublease as described below, consists of two buildings containing approximately 135,000 gross square feet with approximately 102,000 total operating NRSF, including approximately 55,000 raised floor operating NRSF. The facility is situated on a 6.5-acre site in Silicon Valley. Several Silicon Valley Power substations supply 11 MW of utility power to the facility, which is backed up by diesel generators. We believe that Silicon Valley is an ideal data center location due to the large concentration of technology companies and the high local demand for data centers and cloud and managed services. According to 451 Research, the Silicon Valley data center market is expected to experience cumulative demand growth of 60% from 2010 through 2014 compared to 48% supply growth over the same period.

Since acquiring the Santa Clara facility, we have invested capital to build out additional raised floor square footage. As of June 30, 2013, our total investment in our Santa Clara facility was $85.6 million, excluding construction in progress. The property generated $11.1 million of NOI, net of ground lease expenses, for the 12 months ended June 30, 2013, representing a 13% yield on our total investment. For the three months ended June 30, 2012, the Santa Clara facility recorded revenue of $5.2 million and NOI of $2.8 million, representing a 53% NOI margin. MRR grew from approximately $1.3 million as of June 30, 2012 to approximately $1.6 million as of June 30, 2013. In addition, the total booked-not-billed MRR balance at this facility aggregated approximately $57,200 as of June 30, 2013.

As of June 30, 2013, approximately 89% of the facility’s leasable raised floor was leased to 106 customers.

We are currently redeveloping approximately 12,000 NRSF of raised floor at our Santa Clara facility. We anticipate that completing this expansion will cost an additional approximately $25 million based on current estimates. Longer term, we can further expand the facility by another approximately 10,000 NRSF of raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 124,000 total operating NRSF, including approximately 77,000 NRSF of raised floor.

The Santa Clara facility is subject to a ground lease. We acquired a ground sublease interest in the land on which the Santa Clara facility is located in November 2007. The ground sublease expires in 2052, subject to two 10-year extension options. The current annual rent payable under the ground sublease is approximately $1.1 million, which increases annually by the lesser of 6% and the increase in the Consumer Price Index for the San Francisco Bay area. In addition, in 2018 and 2038, the

142

monthly rent will be adjusted to equal one-twelfth of an amount equal to 8.5% of the product of (i) the then fair market value of the demised premises (without taking into account the value of the improvements existing on the land) calculated on a per square foot basis, and (ii) the net square footage of the demised premises. During the term of the ground lease, we have certain obligations to facilitate the provision of job training, seminars and research opportunities for students of a community college that is adjacent to the property. We are the indirect holder of this ground sublease.

Lease Expirations. The following table sets forth a summary schedule of the lease expirations for leases in place as of June 30, 2013 at the Santa Clara facility. Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and all early termination rights.


Year of Lease Expiration(1)	Number of Leases Expiring(2)		Total Raised Floor of Expiring Leases		% of Facility Leased Raised Floor			Annualized Rent(3)		% of Facility Annualized Rent
Month-to-Month(4)		11		480		1	%	$	381,208		2	%
Remainder of 2013		65		10,371		32	%		4,791,175		26	%
2014		122		10,714		33	%		8,182,286		44	%
2015		33		1,314		4	%		1,858,459		10	%
2016		34		9,823		30	%		3,565,718		19	%
2017		—		—		—	%		—		0	%
2018		—		—		—	%		—		0	%
2019		—		—		—	%		—		0	%
2020		—		—		—	%		—		0	%
2021		—		—		—	%		—		0	%
2022		—		—		—	%		—		0	%
2023		—		—		—	%		—		0	%
After 2023		—		—		—	%		—		0	%

Total		265		32,702		100	%	$	18,778,846		100	%

(1)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement customers with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(2)	Represents each lease with a customer signed as of June 30, 2013 for which billing has commenced; a lease agreement could include multiple spaces and/or service orders and a customer could have multiple leases.

(3)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.

(4)	Consists of customers whose leases expired prior to June 30, 2013 and have continued on a month-to-month basis. We do not typically enter into month-to-month leases.

143


Principal Customer Industry	Lease Expiration		Renewal Option	Annualized Rent(1)		% of Facility Annualized Rent
Information Technology		2014	month-to-month	$	2,449,929		13	%
Telecommunications		2016	1x5 years		2,056,278		11	%
Application Software		2013	month-to-month		1,901,808		10	%

(1)

Annualized rent is presented for leases commenced as of June 30, 2013. We define annualized rent as MRR multiplied by 12. We calculate MRR as monthly contractual revenue under signed leases as of a particular date, which includes revenue from our C1, C2 and C3 rental and cloud and managed services activities, but excludes customer recoveries, deferred set-up fees, variable related revenues, non-cash revenues and other one-time revenues. MRR does not include the impact from booked-not-billed leases as of a particular date, unless otherwise specifically noted. This amount reflects the annualized cash rental payments. It does not reflect any free rent, rent abatements or future scheduled rent increases and also excludes operating expense and power reimbursements.


Date	Facility Leasable Raised Floor		% Leased(1)			Annualized Rent(2)		Annualized Rent per Leased Square Foot
June 30, 2013		36,906		89	%	$	18,778,846	$	574
December 31, 2012		36,106		99	%		18,880,308		527
December 31, 2011		37,057		71	%		18,408,108		702
December 31, 2010		23,515		94	%		17,164,968		778
December 31, 2009		24,957		34	%		11,872,068		1,392
December 31, 2008		24,957		33	%		13,024,800		1,570
December 31, 2007		10,199		89	%		13,252,944		1,464

(1)	Calculated as data center raised floor that is subject to a signed lease for which billing has commenced as of the applicable date, divided by leasable raised floor based on the then current configuration of the property, expressed as a percentage.

(2)

144

Depreciation. The following table sets forth for the Santa Clara facility and each component thereof upon which depreciation is taken the (i) federal tax basis upon completion of this offering, (ii) rate, (iii) method, and (iv) life claimed with respect to the property or component thereof for purposes of depreciation:

Federal Tax Basis
(unaudited in millions)

Rate

Method

Life Claimed

$92.7

2.56

Straight Line

39 Years

The 2012 tax rate for this property was $1.15 per $100 of assessed value, or $769,229 in property taxes for the 2012 tax year. We anticipate that upon completion of the near term portion of our expansion of this facility, the property taxes for this property would be approximately $1.1 million applying the 2012 rate. In the opinion of our management, after completion of this offering, the Santa Clara facility will be adequately covered by insurance.

Sacramento

Our Sacramento, California facility, which we acquired in December 2012, is located 120 miles from our Santa Clara facility on a 6.8-acre site. The facility currently consists of approximately 93,000 gross square feet with approximately 76,000 total operating NRSF, including approximately 46,000 raised floor operating NRSF. The Sacramento Municipal Utility District supplies 8 MW of utility power to the facility, which is backed up by diesel generators. The facility is an institutional grade data center with a classic “N+1” design that provides a single extra uninterruptible power supply module for use in the event of a system failure. This facility will provide our regional customer base with business continuity services along with Cloud and Managed Services. We believe the property’s location will be a valuable complement to our Santa Clara facility for our customers, as it will allow them to diversify their footprint in the California market with a single provider. We intend to leverage our existing West Coast regional team and our Cloud and Managed Services sales and support staff to cater to customers in this property, many of which already used managed services when we acquired the property.

Portions of this facility are included in our development pipeline as we plan to expand the facility in two phases. We are currently redeveloping approximately 9,000 square feet of raised floor in the facility. We anticipate that completing this expansion will cost an additional approximately $7 million based on current estimates. Longer term, we can further expand the facility by another approximately 400 NRSF of raised floor. Upon completion of the build-out of the facility, we anticipate that it will contain approximately 86,000 total operating NRSF including approximately 55,000 NRSF of raised floor.

As of June 30, 2013, approximately 61% of the facility’s leasable raised floor was leased to 188 customers. The majority of the customers at this facility are C2 or C3 customers which lease small amounts of space. We are the fee simple owner of the Sacramento facility.

Dallas

We purchased our Dallas, Texas facility in February 2013. Prior to our purchase, the facility was operated as a semiconductor fabrication facility. Similar to our Richmond facility, the Dallas facility has significant pre-existing infrastructure. Specifically, the Dallas facility has diverse feeds of 140 MW of utility power and approximately 698,000 gross square feet on 39 acres. We are the fee simple owner of the Dallas facility.

We acquired our Dallas facility because we believe that we will be able to execute a redevelopment strategy similar to our Richmond facility. Given the infrastructure that is already in place

145

due to its former use as a semiconductor fabrication facility, we believe that the incremental costs to redevelop data center raised floor space in this facility will be lower compared to typical costs for ground-up development or redevelopments of other building types. In addition, the access to a significant amount of utility power provides the necessary power capacity to support our growth strategy for our Dallas data center. Furthermore, we believe that the Dallas market is an important data center market primarily due to its strong business environment and relatively affordable power costs. These characteristics help make Dallas one of the top 10 multi-tenant data center markets in North America, according to 451 Research, which expects the Dallas data center market to experience cumulative demand growth of 63% from 2010 through 2014 compared to 44% supply growth over the same period.

The Dallas facility is included in our redevelopment pipeline, as we plan to convert the facility into an operating data center in multiple phases. Our current redevelopment plans call for the redevelopment of up to approximately 79,000 total operating NRSF, including approximately 26,000 NRSF of raised floor. We anticipate that this redevelopment will cost approximately $80 million to $90 million in the aggregate based on current estimates, and we expect to begin lease-up of the facility in the first half of 2014. Longer term, we can further expand the facility by another approximately 619,000 total NRSF, of which approximately 236,000 NRSF would be raised floor. Upon completion of the build-out of the facility, we anticipate that the facility would contain approximately 698,000 total operating NRSF, including approximately 262,000 NRSF of raised floor.

We own sufficient undeveloped land on the site, approximately 15 acres, that we believe could also be developed to provide an additional 262,000 total operating NRSF, of which approximately 162,000 NRSF would be raised floor. These 15 acres of undeveloped land are not included in our current development plans.

Miami

Our Miami, Florida facility currently consists of approximately 30,000 gross square feet with approximately 26,000 total operating NRSF, including 20,000 raised floor operating NRSF. The property sits on a 1.6-acre site located at Dolphin Center with 4 MW of utility power supplied by Florida Power & Light and backed up by diesel generators. With a wind rating of 185 miles-per-hour, the facility is built to withstand a Category 5 hurricane. Miami is a strategic location for us because it is a gateway to the South American financial markets and a transcontinental Internet hub. The Miami facility was under development when we acquired it in April 2008, and we completed the build-out in August 2008. Other than normally recurring capital expenditures, we have no current plans to further build-out or expand the Miami facility.

As of June 30, 2013, approximately 52% of the facility’s leasable raised floor was leased to 66 customers. The current customers of the facility include only C2 customers which lease small amounts of space, and we intend to continue to lease-up this property, including space recently vacated by a C1 customer. We are the fee simple owner of the Miami facility.

Jersey City

Our Jersey City, New Jersey facility is a leased facility that consists of approximately 122,000 gross square feet with approximately 79,000 total operating NRSF, including approximately 29,000 raised floor operating NRSF. The Jersey City facility was originally leased by another party in March 2004 and we acquired the lease in October 2006 when we acquired the lessee. The lease expires in September 2026 and is subject to one five-year extension option. The facility was redeveloped in November 2006, and we subsequently leased it to service customers in New Jersey and New York. The facility is comprised of four floors of a 19 story building located on one city block in the

146

metropolitan New York City area, six miles from Manhattan. PSE&G supplies 7 MW of utility power to the facility, which is backed up by diesel generators. The facility also contains a small amount of “Class A” office space. We believe that the location in Jersey City provides us with a crucial presence in the tri-state area, where space is highly coveted given the strong demand from financial services firms. According to 451 Research, the New York/New Jersey data center market is expected to experience cumulative demand growth of 72% from 2010 through 2014 compared to 37% supply growth over the same period.

As of June 30, 2013, approximately 89% of the facility’s leasable raised floor was leased to 74 customers.

Wichita

Our Wichita, Kansas facility consists of approximately 14,000 gross square feet with approximately 14,000 total operating NRSF, including approximately 2,600 raised floor operating NRSF. Western Energy supplies 1 MW of utility power to the facility, which is backed up by a diesel generator. We believe that this data center and our Overland Park data center complement our portfolio by providing regional coverage in the Midwest. We acquired the facility in 2005, and it was redeveloped in 2008. Other than normally recurring capital expenditures, we have no current plans to further build-out or expand the Wichita facility.

As of June 30, 2013, 100% of the facility’s leasable raised floor was leased.

Overland Park

The Overland Park, Kansas facility, known as the J. Williams Technology Center, is a leased facility consisting of approximately 33,000 gross square feet, with approximately 8,000 total operating NRSF, including approximately 2,500 raised floor operating NRSF. The property is located in the Kansas City, Missouri metropolitan area. Kansas City Power & Light supplies approximately 1 MW of utility power, which is backed up by a diesel generator. The J. Williams Technology Center has housed the corporate headquarters of QGC since September 2003. We lease the facility under a lease with an entity controlled by our Chairman and Chief Executive Officer, which was entered into in January 2009 and expires in December 2018 with one remaining five-year renewal term. See “Certain Relationships and Related Party Transactions—Office and Data Center Lease.” Other than normally recurring capital expenditures and expansion of our own office space at our headquarters, we have no current plans to further build-out or expand the raised floor at our Overland Park data center.

As of June 30, 2013, approximately 78% of the facility’s leasable raised floor was leased to 19 customers.

Lenexa

Our Lenexa, Kansas property is an approximately 35,000 gross square foot facility located in the Kansas City, Missouri metropolitan area. The property was acquired in 2004. The Lenexa property does not currently operate as a data center, nor do we intend to operate it as a data center. We use this property primarily as a warehouse. Other than normally recurring capital expenditures, we have no current plans to further build-out or expand the Lenexa property.

Indebtedness Expected to be Outstanding After the Offering

As of June 30, 2013, we had outstanding approximately $315 million of indebtedness on a pro forma basis. The weighted average interest rate on our pro forma indebtedness, taking into account

147

the impact of hedging arrangements, is expected to be 3.24% per annum. Upon completion of this offering, we expect to have outstanding approximately $145 million of our pro forma indebtedness that will bear interest at a variable rate, including the impact of hedging arrangements.

The following table sets forth the total pro forma indebtedness as of June 30, 2013 that we expect will be outstanding upon completion of this offering:


Debt	Interest Rate(1)			Principal Amount Outstanding (in thousands)			Annual Debt Service (in thousands)		Maturity Date(2)			Balance at Maturity(3) (in thousands)
Credit Facility
Unsecured Revolving Credit Facility		LIBOR + 2.35	%	$	0	(4)	$	0		5/1/17	(5)	$	0
Term Loan		LIBOR + 2.35	%		225,000			5,738		5/1/18			225,000
Richmond Secured Credit Facility		LIBOR + 4.25	%		70,000	(6)		3,115		12/18/15	(5)		70,000
Atlanta Metro—Equipment Loan		6.85%			19,903			3,460		6/1/20			0

Total				$	314,903		$	12,313				$	295,000

(1)	Reflects interest rate in effect as of June 30, 2013.

(2)	The maturity date represents the date on which the principal amount is due and payable.

(3)	Assumes no early repayment of principal.

(4)	The Company may borrow up to $350 million under the unsecured revolving credit facility, subject to compliance with all covenants and other conditions.

(5)	The maturity date can be extended up to one year if certain conditions are satisfied.

(6)	The Company may borrow up to $100 million under the Richmond secured credit facility, subject to compliance with all covenants and other conditions.

Set forth below is a summary of the principal terms of our expected existing material indebtedness as of the closing of this offering.

Credit Facility

On May 1, 2013, our operating partnership entered into a $575 million credit facility with KeyBank National Association, and other financial institutions party thereto, as the lenders, KeyBank National Association, as the agent, KeyBanc Capital Markets, as the sole lead arranger and sole book manager, and Regions Bank, as the syndication agent.

The credit facility is comprised of a $225 million term loan maturing May 1, 2018 and an unsecured revolving credit facility of $350 million maturing May 1, 2017, with the option to extend until May 1, 2018 subject to satisfaction of certain conditions. The credit facility may be increased to $675 million subject to certain conditions set forth in the credit agreement (including consent of the administrative agent and obtaining necessary commitments), either through an increase to the term loan or the unsecured revolving credit facility, or a combination of both. The unsecured revolving credit facility also includes up to $30 million in letters of credit and $30 million in swing loans. The availability under the unsecured revolving credit facility is the lesser of (i) $350 million, (ii) 55% of unencumbered asset pool capitalized value, (iii) the amount resulting in an unencumbered asset pool debt service ratio of 1.75 to 1.00 or (iv) the amount resulting in an unencumbered asset pool debt yield of 15%, less, in the case of (ii), (iii) and (iv), unsecured debt and as defined in the unsecured revolving credit facility.

Amounts outstanding under the credit facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will range, depending upon our leverage ratio, from 2.10% to 2.85% for LIBOR rate loans or 1.10% to 1.85% for base rate loans. As of June 30, 2013, the interest rate for amounts outstanding under our credit facility was 2.55%. We are also required to pay a commitment fee to the lenders assessed on the unused portion of the unsecured revolving credit facility. At our election, we can prepay amounts outstanding under the credit facility, in whole or in part, without penalty or premium.

148

The credit facility has customary representations and warranties, and our ability to borrow under the facility is subject to ongoing compliance with a number of customary affirmative and negative covenants, including limitations on liens, mergers, consolidations, investments, distributions, asset sales and affiliate transactions, as well as financial covenants, including the following:

the outstanding principal balance of the loans and letter of credit liabilities cannot exceed the unencumbered asset pool availability;

a minimum fixed charge coverage ratio (defined as the ratio of consolidated EBITDA, subject to certain adjustments, to consolidated fixed charges) for the prior two most recently-ended calendar quarters of 1.75 to 1.00;

a maximum debt to asset ratio of 55%;

the tangible net worth cannot be less than the sum of $408 million plus 85% of the sum of (i) net equity offering proceeds and (ii) the value of interests in the operating partnership issued upon the contribution of assets to the operating partnership or its subsidiaries;

the unhedged variable rate debt of the operating partnership, and following this offering, us, cannot exceed 30% of gross asset value; and

a maximum distribution payout ratio of the greater of (i) 95% of our Funds from Operations (as defined in the agreement) and (ii) the amount required for us to qualify as a REIT.

The credit facility includes customary events of default, and the occurrence of an event of default will permit the lenders to terminate commitments to lend under the facility and accelerate payment of all amounts outstanding thereunder. If a default occurs and is continuing, we will be precluded from making distributions on our common stock (other than those required to allow us to qualify and maintain our status as a REIT, so long as such default does not arise from a payment default or event of insolvency) and lenders under the facility and, potentially, other indebtedness could accelerate the maturity of the related indebtedness.

The borrowings under the credit facility are guaranteed by certain of the operating partnership’s subsidiaries, and following this offering, by us.

Richmond Secured Credit Facility

On December 21, 2012, a subsidiary of our operating partnership entered into an $80 million secured credit facility with Regions Bank, and other lenders thereto, secured by our Richmond property. On January 18, 2013, our subsidiary increased the size of the facility to $100 million, of which $70 million was outstanding as of June 30, 2013. This facility matures on December 18, 2015 with an option to extend the maturity date up to one year, subject to satisfaction of certain conditions. The facility may be increased to $125 million subject to certain conditions set forth in the credit agreement (including approval of the administrative agent and obtaining necessary commitments). On May 1, 2013, we entered into an amendment to this agreement, to amend, among other things, certain of the financial covenants. The facility allows prepayment of amounts outstanding, in whole, but not in part, without penalty or premium, but once repaid, the amounts cannot be reborrowed. The proceeds from this facility may be used solely to finance the development of the Richmond property into a data center and to repay indebtedness under the credit facility described above.

Amounts outstanding under the Richmond facility will bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will range, depending upon our leverage ratio, from 4.00% to 4.50% for LIBOR rate loans or 3.00% to 3.50% for base rate loans. As of June 30, 2013, the interest rate for amounts outstanding under the Richmond secured credit facility was 4.44%. We are also required to pay a commitment fee to the lenders assessed on the unused portion of the facility.

149

Our ability to borrow under the Richmond facility is subject to ongoing compliance with a number of customary affirmative and negative covenants, including limitations on indebtedness, liens, investments, distributions, asset sales and affiliate transactions, as well as financial covenants, including the following:

the outstanding principal balance of the loans not exceeding the borrowing base;

a minimum borrower’s debt yield of 12% to 18%, depending on the relevant time period;

a minimum borrowing base debt service coverage ratio (the ratio of adjusted net operating income from the mortgaged properties divided by the implied debt service) ranging from 1.3:1 to 2:1, depending on the relevant time period;

a maximum debt to asset ratio of the operating partnership, and following this offering, of us, of 55%;

a minimum fixed charge coverage ratio of the operating partnership, and following this offering, of us, (defined as the ratio of consolidated EBITDA, subject to certain adjustments, to consolidated fixed charges) for the prior two most recently ended calendar quarters of 1.75 to 1.00;

the tangible net worth of the operating partnership, and following this offering, of us, not less than the sum of $408 million plus 85% of the sum of (i) net equity offering proceeds and (ii) the value of interests in the operating partnership issued upon the contribution of assets to the operating partnership or its subsidiaries;

the unhedged variable rate debt of the operating partnership, and following this offering, of us, cannot exceed 30% of gross asset value; and

a maximum distribution payout ratio of the greater of (i) 95% of our Funds from Operations (as defined in the agreement) and (ii) the amount required for us to qualify as a REIT.

The Richmond facility includes customary events of default, and the occurrence of an event of default will permit the lenders to terminate commitments to lend under the facility and accelerate payment of all amounts outstanding thereunder. If a default occurs and is continuing, we will be precluded from making distributions on our common stock (other than those required to allow us to qualify and maintain our status as a REIT, so long as such default does not arise from a payment default or event of insolvency) and lenders under the facility and, potentially, other indebtedness could accelerate the maturity of the related indebtedness.

The borrowings under the Richmond facility are guaranteed by our operating partnership, certain of the operating partnership’s subsidiaries, and following this offering, us.

Other Indebtedness

On April 9, 2009, a subsidiary of our operating partnership entered into a $25 million loan agreement with Caterpillar Financial Services Corporation secured by certain equipment at our Atlanta Metro facility. This loan bears interest at 6.85% per annum and has a maturity date of June 1, 2020. Monthly installments on the loan are of principal and interest and the loan has a 10-year amortization schedule.

In addition, in connection with obtaining bond financing for the development of the Atlanta Metro facility, we transferred the title to our Atlanta Metro facility to the DFAC and entered into a sale-lease back transaction for the facility. DFAC issued a bond to us to finance its acquisition of the property in the amount of $300 million, which bond matures on December 1, 2019 and bears interest at a rate of 8% per annum. In order to secure the bond, DFAC pledged its interest in the project, including its rights

150

to receive all rental payments thereunder. Our rental payments under the lease fund debt service payments under the bond, plus the expenses and advances of the issuer of the bond in connection with the development project. At our direction, the bond is redeemable at our option, which, if exercised, will cause the title to our Atlanta Metro facility to be returned to us.

Competition

We compete with developers, owners and operators of data centers and with IT infrastructure companies in the market for data center customers, properties for acquisition and the services of key third-party providers. Although, according to 451 Research, we are the only national multi-tenant data center provider to offer a full complement of solutions, which include wholesale data center, colocation, interconnection and hosting and/or cloud services, we continue to compete with owners and operators of data centers and providers of cloud and managed services that follow other business models and may offer one or more of these services. We believe, however, that our 3Cs product offerings set us apart from our competitors in the data center industry and makes us more attractive to customers, both large and small. In addition, we believe other providers are seeking ways to enter or strengthen their positions in the data center market.

We compete for customers based on factors, including location, critical load, NRSF, flexibility and expertise in the design and operation of data centers, as well as our cloud product and the breadth of managed services that we provide. New customers who consider leasing space at our properties and using our products and existing customers evaluating whether to renew or extend a lease may also consider our competitors, including wholesale infrastructure providers and colocation and managed services providers. In addition, our customers may choose to own and operate their own data centers rather than lease from us.

As an owner, developer and operator of data centers and provider of Cloud and Managed Services, we depend on certain third-party service providers, including engineers and contractors with expertise in the development of data centers and the provision of managed services. The level of competition for the services of specialized contractors and other third-party providers increases the cost of engaging such providers and the risk of delays in operating our data centers and completing our development and redevelopment projects.

In addition, we face competition for the acquisition of additional properties suitable for the development of data centers from real estate developers in our and in other industries and from customers who develop their own data center facilities. Such competition may have the effect of reducing the number of available properties for acquisition, increasing the price of any acquisition and reducing the demand for data center space in the markets we seek to serve.

Regulation

General

Data centers in our markets are subject to various laws, ordinances and regulations, including regulations relating to common areas. We believe that each of our properties has the necessary permits and approvals to operate its business.

Americans With Disabilities Act

Our properties must comply with Title III of the ADA to the extent that such properties are “public accommodations” as defined by the ADA. The ADA may require removal of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. We believe that the initial properties are in substantial compliance with the ADA and

151

that we will not be required to make substantial capital expenditures to address the requirements of the ADA. However, noncompliance with the ADA could result in imposition of fines or an award of damages to private litigants. The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate in this respect.

Environmental Matters

Under various federal, state and local laws, including regulations, ordinances and case law, a current or former owner or operator of real property may be liable for the cost to remove or remediate contamination resulting from the presence or discharge of hazardous or toxic substances, wastes or petroleum products on, under, from or in such property. These costs could be substantial, liability under these laws may attach without regard to whether the owner or operator knew of, or was responsible for, the presence of the contaminants, and the liability may be joint and several. Most of our properties presently contain large underground or aboveground fuel storage tanks for emergency power, which is critical to our operations. If any of our tanks has a release of fuel to the environment, we would likely have to pay to clean up the contamination. In addition, prior owners and operators used some of our current properties for industrial and retail purposes, which could have resulted in environmental contamination. Moreover, the presence of contamination or the failure to remediate contamination at our properties may (1) expose us to third-party liability, (2) subject our properties to liens in favor of the government for damages and costs the government incurs in connection with the contamination, (3) impose restrictions on the manner in which a property may be used or businesses may be operated, or (4) materially adversely affect our ability to sell, lease or develop the real estate or to borrow using the real estate as collateral. We also may be liable for the costs of remediating contamination at off-site disposal or treatment facilities when we arrange for disposal or treatment of hazardous substances at such facilities, without regard to whether we comply with environmental laws in doing so. Finally, there may be material environmental liabilities at our properties of which we are not aware. Any of these matters could have a material adverse effect on us.

Our properties are subject to federal, state, and local environmental, health, and safety laws and regulations and zoning requirements, including those regarding the handling of regulated substances and wastes, emissions to the environment, and fire codes. For instance, our properties are subject to regulations regarding the storage of petroleum for auxiliary or emergency power and air emissions arising from the use of power generators. In particular, our properties in California are subject to strict emissions limitations for its generators, which could be exceeded if we need to use these generators to supply critical backup power in a manner that results in emissions in excess of California limits. In addition, we lease some of our properties to our customers who are also subject to such environmental, health and safety laws and zoning requirements. If we, or our customers, fail to comply with these various requirements, we might incur costs and liabilities, including governmental fines and penalties. Moreover, we do not know whether existing requirements will change or whether future requirements will require us to make significant unanticipated expenditures that will materially and adversely affect us. Environmental noncompliance liability also could affect a customer’s ability to make rental payments to us. We require our customers to comply with these environmental and health and safety laws and regulations and to indemnify us for any related liabilities.

Some of our properties may contain, or may have contained, asbestos-containing building materials. Environmental laws require that owners or operators of or employers in buildings with asbestos-containing materials, or ACM properly manage and maintain these materials, adequately inform or train those who may come into contact with ACM and undertake special precautions, including removal or other abatement, in the event that ACM is disturbed during building maintenance, renovation or demolition. These laws may impose fines and penalties on building owners or operators for failure to comply with these requirements. In addition, third parties may seek recovery from

152

employers, owners or operators for personal injury associated with exposure to asbestos. If we become subject to any of these penalties or recoveries as a result of ACM at one or more properties, we could be materially and adversely impacted.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Indoor air quality issues also can stem from inadequate ventilation, chemical contamination from indoor or outdoor sources and other biological contaminants such as pollen, viruses and bacteria. Indoor exposure to airborne toxins or irritants above certain levels can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property or increase indoor ventilation. In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our customers, employees of our customers and others if property damage or personal injury occurs. Thus, conditions related to mold or other airborne contaminants could results in material liabilities, which could have a material adverse effect on us.

If we, or other companies with which we do business, particularly utilities that provide our facilities with electricity, become subject to laws or regulations related to climate change, we could be materially and adversely impacted. Congress is currently considering new laws relating to climate change, including potential cap-and-trade systems, carbon taxes and other requirements relating to reduction of carbon footprints and/or greenhouse gas emissions. Other countries have enacted climate change laws and regulations and the United States has been involved in discussions regarding international climate change treaties. The U.S. government and some of the states and localities in which we operate have enacted certain climate change laws and regulations and/or have begun regulating carbon footprints and greenhouse gas emissions. Although these laws and regulations have not had any known material adverse effect on us to date, they could limit our ability to develop new facilities or result in substantial compliance costs, retrofit costs and construction costs, including monitoring and reporting costs and capital expenditures for environmental control facilities and other new equipment. Furthermore, our reputation could be negatively affected if we violate climate change laws or regulations. We cannot predict how future laws and, regulations, or future interpretations of current laws and regulations, related to climate change will affect our business, results of operations, liquidity and financial condition. Lastly, the potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts could have a material adverse effect on us.

Independent environmental consultants have conducted Phase I or similar environmental site assessments on all of operating properties in our initial portfolio that we own. Each of the site assessments has been either completed or updated since 2010, except with respect to our Wichita property, which was completed in 2004. Site assessments are intended to discover and evaluate information regarding the environmental condition of the surveyed property, including information obtained through a site visit, interviews, database searches, and records reviews. These assessments do not generally include soil samplings, subsurface investigations, an asbestos survey, or a review of compliance with environmental, health, and safety laws. None of the site assessments have revealed any recognized environmental conditions (i.e., the presence or likely presence of contaminants) that we believe would have a material adverse effect on us. However, the site assessments may have failed to reveal all existing environmental conditions, liabilities or compliance concerns and material environmental conditions, liabilities or compliance concerns may have arisen after the site assessments were completed or may arise in the future.

153

Privacy and Security

We may be directly and/or contractually subject to laws, regulations and policies for protecting sensitive data, consumer privacy and vital national interests. For example, the US government has promulgated regulations and standards subject to authority provided through the enactment of a number of laws, such as HIPAA, the Health Information Technology for Economic and Clinical Health Act, or HITECH Act, the Gramm-Leach-Bliley Act, or GLBA, and the Federal Information Security Management Act of 2002, or FISMA, which require many corporations and federal, state and local governmental entities to control the security of, access to and configuration of their IT systems. A number of states have also enacted laws and regulations that require covered entities, such as data center operators, to implement and maintain security measures to protect certain types of information, such as Social Security numbers, payment card information, and other types of data, from unauthorized use and disclosure. In addition, industry organizations have adopted and implemented various security and compliance policies. For example, the Payment Card Industry Security Standards Council has issued its mandatory Payment Card Industry Data Security Standard, or PCI DSS, which is applicable to all organizations processing payment card transactions.

In connection with certain of these laws, we are subject to audits and assessments, and we may be required to obtain certain certifications. Audit failure or findings of non-compliance can lead to significant fines or decertification from engaging in certain activities. For example, violations of HIPAA/HITECH Act regulations can lead to fines of up to $1.5 million for all violations of a particular provision in a calendar year and our failure to demonstrate compliance in an annual PCI DSS audit may result in fines and exclusion from payment card networks. Additionally, violations of privacy or security laws, regulations or standards increasingly lead to class-action litigation, which can result in substantial monetary judgments or settlements. We cannot assure you that future laws, regulations and standards, or future interpretations of current laws, regulations and standards, related to privacy and security will not have a material adverse effect on us.

Insurance

We carry comprehensive liability, fire, extended coverage, earthquake, business interruption and rental loss insurance covering all of the properties in our portfolio under a blanket policy. We have selected policy specifications and insured limits that we believe to be appropriate given the relative risk of loss, the cost of the coverage and industry practice and, in the opinion of our management, the properties in our portfolio are currently, and upon completion of this offering will be, adequately insured. We will not carry insurance for generally uninsured losses such as loss from riots, war, terrorism, acts of God, wet or dry rot, vermin and, in some cases, flooding, because such coverage is not available or is not available at commercially reasonable rates. In addition, although we carry earthquake insurance on our properties in an amount and with deductibles that we believe are commercially reasonable, such policies are subject to limitations in certain seismically active zones. Certain of the properties in our portfolio will be located in areas known to be seismically active. See “Risk Factors—Risks Related to the Real Estate Industry—Uninsured and underinsured losses could have a material adverse effect on us.”

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the JOBS Act, and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation

154

and stockholder approval of any golden parachute payments not previously approved. We have not yet made a decision as to whether we will take advantage of any or all of these exemptions. If we do take advantage of any of these exemptions, we do not know if some investors will find our common stock less attractive as a result. The result may be a less active trading market for our common stock and our stock price may be more volatile.

Employees

As of June 30, 2013, we employed approximately 415 persons, none of which were represented by a labor union. We believe our relations with our employees are good.

Offices

Our executive headquarters is located at 12851 Foster Street, Overland Park, Kansas 66213, where our telephone number is (913) 814-9988. We believe that our current offices are adequate for our present operations; however, based on the anticipated growth of our company, we may add regional offices depending upon our future operational needs.

Legal Proceedings

In the ordinary course of our business, we are subject to claims for negligence and other claims and administrative proceedings, none of which we believe are material or would be expected to have, individually or in the aggregate, a material adverse effect on us.

155

MANAGEMENT

Directors, Executive Officers and Significant Employees

Our board of directors will consist of eight members, a majority of which are independent within the meaning of the corporate governance listing standards of the NYSE. Pursuant to our organizational documents, each of our directors is elected by our stockholders to serve until the next annual meeting of our stockholders and until his or her successor is duly elected and qualified. Our charter and bylaws provide that the number of directors of our company may be established by our board of directors and may not be fewer than the minimum number required under Maryland law nor more than 15 directors. See “Material Provisions of Maryland Law and of Our Charter and Bylaws—Our Board of Directors.” The first annual meeting of our stockholders after this offering will be held in 2014. Subject to rights pursuant to any employment agreements, officers serve at the discretion of our board of directors.

The following table sets forth certain information concerning the individuals who will be our executive officers and directors upon completion of this offering:

Executive Officers and Directors


Name	Age		Position
Chad L. Williams		42	Chairman and Chief Executive Officer
William H. Schafer		55	Chief Financial Officer
James H. Reinhart		48	Chief Operating Officer—Operations
Daniel T. Bennewitz		54	Chief Operating Officer—Sales & Marketing
Jeffrey H. Berson		44	Chief Investment Officer
Shirley E. Goza		56	General Counsel
John W. Barter		66	Director(1)
William O. Grabe		75	Director(1)
Catherine R. Kinney		61	Director(1)
Peter A. Marino		71	Director(1)
Scott D. Miller		51	Director(1)
Philip P. Trahanas		42	Director(1)
Stephen E. Westhead		49	Director

(1)	Independent within the meaning of the NYSE listing standards.

Biographical Summaries of Executive Officers

Chad L. Williams is our Chairman and Chief Executive Officer and has served as Chairman and Chief Executive Officer of our predecessor since 2003. Mr. Williams has more than 24 years of experience in the management and development of various private companies and more than 14 years of experience in the ownership, management and development of commercial real estate, the last eight of which have been focused on data center properties. In his role as Chief Executive Officer, Mr. Williams has been directly involved in every aspect of our business, from strategic acquisition and financing, to site selection, design, development and construction and customer management.

156

Williams currently serves on the board of directors for the U.S. Dream Academy, an organization that focuses on intervening in the lives of children of incarcerated parents. Its mission is to empower these at-risk children to maximize their potential by providing them with academic, social and values-enrichment through supportive mentoring and the use of technology.

Our board of directors determined that Mr. Williams should serve on our board of directors based on his experience as a successful business leader and entrepreneur and his experience in real estate and with our company.

William H. Schafer is our Chief Financial Officer and has served as the Chief Financial Officer of our predecessor since 2010. Mr. Schafer has more than 20 years of experience in the REIT industry and 33 years of experience in financial operations, accounting systems and financing activities. Prior to joining our predecessor, Mr. Schafer was the chief financial officer of DDR Corp. (NYSE: DDR) from 1992 to 2010, a public REIT and an owner and developer of retail properties. Prior to joining DDR Corp., Mr. Schafer was a senior manager of PricewaterhouseCoopers LLP. Mr. Schafer earned a Bachelor of Arts degree in business administration from the University of Michigan.

James H. Reinhart is our Chief Operating Officer—Operations and has served as the Chief Operating Officer—Operations of our predecessor since 2012. Mr. Reinhart has more than 25 years of experience in operations, technology, marketing and strategy. Prior to joining our predecessor, Mr. Reinhart held various positions at Genworth Financial, Inc. (NYSE: GNW), a financial services company, from 2005 to 2012. In his last position at Genworth Financial, Inc., Mr. Reinhart was the chief strategy and marketing officer of the U.S. Insurance & Wealth Management division. Prior to that, Mr. Reinhart held various positions at Capital One Financial Corporation (NYSE: COF), a financial services company, from 1999 to 2005, the last of which was vice president responsible for call center outsourcing, and various positions at the Hewlett-Packard Company (NYSE: HPQ), a technology products and software company, from 1993 to 1999. Mr. Reinhart earned a Master of Business Administration from the Harvard Graduate School of Business Administration, a Master of Science degree in electrical engineering from the University of Maryland and a Bachelor of Science degree in electrical engineering from the United States Naval Academy.

Daniel T. Bennewitz is our Chief Operating Officer—Sales & Marketing and has served as the Chief Operating Officer—Sales & Marketing of our predecessor since 2012. Mr. Bennewitz has more than 30 years of experience in sales, marketing, operations and global leadership positions. Prior to joining our predecessor, Mr. Bennewitz worked at IBM Corporation (NYSE: IBM), an information technology and products company, from 1980 to 2012. Mr. Bennewitz’s responsibilities included product, industry and global leadership positions across the company, and his last position was vice president of IBM’s sales model, a position in which he was responsible for leading IBM’s go-to-market model and sales force transformation. Mr. Bennewitz earned an A.B. degree in economics from Princeton University.

Jeffrey H. Berson is our Chief Investment Officer and has served as the Chief Investment Officer of our predecessor since August 2013. Mr. Berson has more than 20 years of experience in investment banking covering data center companies and the technology and telecommunications sectors. Prior to joining our predecessor, Mr. Berson was a Managing Director at UBS AG, an international investment bank, from 2011 to 2013, a Managing Director at Oppenheimer and Co. Inc., an international investment bank, from 2009 to 2011, and a Managing Director at Barclays Capital, an international investment bank, from 2007 to 2009. Prior to 2007, Mr. Berson spent over 10 years at Canadian Imperial Bank of Commerce in the Investment Banking Department. Mr. Berson earned a Bachelor of Arts degree from the University of Pennsylvania, a Bachelor of Science degree from the Wharton School of the University of Pennsylvania and a Master of Business Administration from the University of Chicago.

157

Shirley E. Goza is our General Counsel and has served as the General Counsel of our predecessor since 2006. Ms. Goza has more than 30 years of experience as a practicing attorney and law professor. Prior to joining our predecessor, Ms. Goza co-owned and operated Focus Trial and Settlement Solutions, a company that facilitated mock trials for trial attorneys, and served as managing partner from 2004 to 2006. Ms. Goza previously was a partner with the law firm Shook, Hardy & Bacon from 2000 to 2004 and was Of Counsel at Spencer Fane Britt & Browne LLP from 1982 to 1990. Ms. Goza taught on the faculty at the University of Missouri, Kansas City, School of Law from 1990 through 1997 and was a visiting faculty member at the University of Kansas in 1996. Ms. Goza earned a Juris Doctorate from the University of Kansas and a Bachelor of Arts degree in English and psychology from Pittsburg State University.

Biographical Summaries of Significant Employees

Brian E. Johnston is our Chief Technology Officer and has served as the Chief Technology Officer of our predecessor since 2011. Mr. Johnston has more than 17 years of engineering experience for technology companies focusing on information technology and data center solutions. Prior to his role as Chief Technology Officer, Mr. Johnston served as our predecessor’s Chief Operations Officer from 2006. Before joining our predecessor, Mr. Johnston was Vice President of Operations at First National Technology Solutions, a data center services company, from 2001 to 2006, and president of Capaciteam, a capacity and mathematical modeling service provider, from 1999 to 2001. From 1990 to 1995, Mr. Johnston served in the U.S. Marine Corps and the U.S. Marine Corps Reserves. Mr. Johnston earned a Bachelor of Science degree in management information systems from Bellevue University.

Mark D . Waddington is our Chief Business Officer and has served as the Chief Business Officer of our predecessor since 2011. Mr. Waddington has over 25 years of leadership experience building and managing technology operations. Mr. Waddington served as the president of our predecessor from 2005 to 2011. Prior to this, Mr. Waddington served as president of First National Technology Solutions, a data center services company and subsidiary of First National of Nebraska, from 2001 to 2005. Mr. Waddington also served as vice president of First National Bank of Omaha, a subsidiary of First National of Nebraska, from 1988 to 2005. Prior to joining First National Bank of Omaha, Mr. Waddington was a system engineer at Electronic Data Systems, a technology company, from 1986 to 1988. Mr. Waddington earned a Bachelor of Arts degree in business from Wayne State College in 1986.

Biographical Summaries of Directors

John W. Barter has been our director since August 2013 and has been a director of our predecessor since 2010. Mr. Barter will serve as the chair of our audit committee Mr. Barter has more than 25 years of experience in financial management, mergers and acquisitions, executive management and planning and analysis. Mr. Barter was the chief financial officer of Kestral Solutions, Inc., a technology company, from 2000 to 2001. Prior to this, Mr. Barter held various positions with AlliedSignal, Inc., now called Honeywell International, Inc. (NYSE: HON), a technology company, for most of the time between 1973 to 1997, and was an executive vice president and president of AlliedSignal Automotive from 1994 to 1997 and chief financial officer from 1988 to 1994. He currently serves on the boards of directors of Dice Holdings, Inc. (NYSE: DHX) and Genpact Ltd. (NYSE: G), and previously served on the boards of directors of Lenovo Group, Ltd. (HKG: 992) from 2005 until 2010 and SRA International from 2003 until 2011. Mr. Barter earned a Bachelor of Science degree in physics from Spring Hill College and a Master of Business Administration in finance from Tulane University.

Our board of directors determined that Mr. Barter should serve on our board of directors based on his financial management experience.

158

William O. Grabe has been our director since August 2013 and has been a director of our predecessor since 2009. Mr. Grabe will serve as the chair of our compensation committee. Mr. Grabe has over 40 years of experience in investment management and corporate operations. Mr. Grabe is an advisory director of General Atlantic LLC, a global investment firm, and was a managing director at General Atlantic LLC from 1992 to 2010. Prior to joining General Atlantic LLC, Mr. Grabe held executive positions in sales, marketing and operations at IBM Corporation and was the general manager for the Marketing and Services Group from 1988 to 1992. Mr. Grabe currently serves on the boards of directors of Lenovo Group, Ltd., Compuware Corporation (NASDAQ: CPWR) and Gartner, Inc. (NYSE: IT). He previously served on the board of directors of iGATE Computer Systems Limited (f/k/a Patni Computer Systems Limited, NYSE: PTI) from 2002 to 2011 and the board of directors of several other public and private global technology companies during his tenure at General Atlantic LLC. Mr. Grabe earned a Master of Business Administration from the UCLA Graduate School of Business and a Bachelor of Science degree in engineering from New York University.

Our board of directors determined that Mr. Grabe should serve on our board of directors based on his experience as a director of other public companies in the technology sector and his investment management experience.

Catherine R. Kinney has been our director since August 2013 and has been a director of our predecessor since May 2013. Ms. Kinney will serve as the chair of our nominating and corporate governance committee. Ms. Kinney has 35 years of experience in securities regulation and management. Based in Paris, France, from 2007 to 2009, Ms. Kinney served as the group executive vice president and head of global listing, marketing and branding at NYSE Euronext (NYSE: NYX), a company that operates multiple securities exchanges. From 1974 to 2008, Ms. Kinney held various positions with the New York Stock Exchange, Inc., a U.S.-based securities exchange and predecessor of the NYSE Euronext, and was its president and co-chief operating officer from 2002 to 2008. Ms. Kinney currently serves on the boards of directors of MetLife, Inc. (NYSE: MET), NetSuite, Inc. (NYSE: N) and MSCI Inc. (NYSE: MSCI). Ms. Kinney earned a Bachelor of Arts degree from Iona College and completed the Advanced Management Program at Harvard Business School. Ms. Kinney has also received honorary degrees from Georgetown University, Fordham University and Rosemont College.

Our board of directors determined that Ms. Kinney should serve on our board of directors based on her extensive leadership, management and corporate governance experience and experience as a director of other public companies.

Peter A. Marino has been our director since August 2013 and has been a director of our predecessor since 2012. Mr. Marino has over 25 years of executive experience. Mr. Marino has been a private consultant for government and industry on defense and intelligence issues since 1999. He also serves as special advisor to General Atlantic LLC. From 1996 to 1999, Mr. Marino was the president and chief executive officer of Firearms Training Systems, Inc., a provider of software and hardware simulation training systems for military, law enforcement and security forces. From 1991 to 1996, Mr. Marino served as senior vice president of E-Systems Corporation, a computing and software company which was acquired by Raytheon (NYSE: RTN) in 1995. Mr. Marino previously served as president and chief operating officer of Fairchild Industries, an aerospace and defense company, from 1988 to 1990 and was president and chief operating officer of Lockheed Electronics Company, Inc., a defense electronics company, from 1986 to 1988. From 1970 to 1986, he served in numerous capacities at the Central Intelligence Agency, including director of technical service and deputy director for the Office of Research and Development. He is also a Senior Executive Fellow at Harvard University. Mr. Marino previously served as a director of Argon St., Inc., a former public company, from 2004 to 2010. Mr. Marino earned a Master of Science in acoustics (engineering physics) from The Pennsylvania State University and a Bachelor of Science degree in physics from Rollins College.

159

Our board of directors determined that Mr. Marino should serve on our board of directors based on his experience as a successful business leader and entrepreneur, as well as his technology experience.

Scott D. Miller has been our director since August 2013 and a has been a director of our predecessor since May 2013. Mr. Miller has over 30 years of executive experience. Mr. Miller is the chief executive officer of SSA & Company, a management consulting firm focusing on process improvement, the chief executive officer of G100, a membership organization providing a forum for current, future and recent chief executive officers of leading public and private companies and private equity firms, and the managing general partner of MSP, LLC, a private real estate development and investment company. He also serves as special advisor to General Atlantic LLC. Prior to joining SSA & Company in March 2004, Mr. Miller served as non-executive vice chairman of Hyatt Hotels and Resorts Corporation (NYSE: H), a global hospitality company, from 2003 to 2004, the president from 1999 to 2003 and executive vice president from 1997 to 1999. Mr. Miller was also the president and chief executive officer of United Infrastructure Company, a public infrastructure development company from 1993 to 1997. From 1981 to 1993, he was a founding partner of The John Buck Company, a real estate brokerage, management and development company. Mr. Miller currently serves on the board of directors of Affinion Group, Inc. and previously served as director of AXA Equitable Life Insurance Company from 2002 to 2012, Orbitz Worldwide, Inc. (NYSE: OWW) from 2003 to 2004, and NAVTEQ Corporation from 2004 to 2008. Mr. Miller earned a Master of Business Administration from the University of Chicago and a Bachelor of Arts degree in human biology from Stanford University.

Our board of directors determined that Mr. Miller should serve on our board of directors based on his leadership and management experience as a principal executive officer of diverse organizations and experience as a director of other public companies.

Philip P. Trahanas has been our director since August 2013 and has been a director of our predecessor since 2009. Mr. Trahanas has over 17 years of experience in financial advisory, investing and investment management, as well as over 10 years of experience serving on private and public company boards. Mr. Trahanas is a Managing Director of General Atlantic LLC, a global investment firm, which he joined in 2000. From 1996 to 2000, Mr. Trahanas worked at Morgan Stanley (NYSE: MS), a global financial services firm, where he was a member of the high technology corporate finance team, was a merger and acquisition specialist and was a member of the investment banking division’s operating management team. Prior to joining Morgan Stanley, Mr. Trahanas was an electrical engineer at General Electric (NYSE: GE), a diversified technology, media and financial services company, where he specialized in communications equipment and semiconductor design. Mr. Trahanas earned a Bachelor of Engineering degree in electrical engineering from The Cooper Union for the Advancement of Science and Art, a Master of Business Administration from the University of Pennsylvania Wharton School and a Master of Science degree in engineering from the University of Pennsylvania Moore School of Engineering.

Our board of directors determined that Mr. Trahanas should serve on our board of directors based on his extensive operating, investment banking and private equity experience.

Stephen E. Westhead has been our director since August 2013 and has been a director of our predecessor since May 2013. Mr. Westhead has over 25 years of experience in management. Since 2007, Mr. Westhead has been the chief executive officer and lead investor of US Trailer, a semi-trailer leasing company, and has served as the chief marketing officer of Satori Group, Inc., an IT company, since January 2013. From 1987 to 2008, Mr. Westhead served as senior vice president of commercial lines underwriting for Philadelphia Insurance Companies, an insurance company. Mr. Westhead earned a Bachelor of Science degree in business administration from Cabrini College.

Our board of directors determined that Mr. Westhead should serve on our board of directors based on his executive management experience.

160

Promoters

Chad L. Williams is considered our promoter under the federal securities laws. As discussed above, he will serve as our Chairman and Chief Executive Officer. His designation as promoter under the federal securities laws indicates that he took the initiative in founding and organizing our business. We also refer to Mr. Williams as our “founder” elsewhere in this prospectus.

Corporate Governance Profile

We have structured our corporate governance in a manner that we believe closely aligns our interests with those of our stockholders. Notable features of our corporate governance structure include the following:

our board of directors is not staggered, with each of our directors subject to re-election annually;

of the eight persons who will serve on our board of directors, seven, or 88% of our directors, are expected to be determined by us to be independent for purposes of the NYSE’s corporate governance listing standards and Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act;

we anticipate that at least one of our directors will qualify as an “audit committee financial expert” as defined by the SEC;

we have opted out of the Maryland business combination and control share acquisition statutes; and

we do not have a stockholder rights plan.

Our directors will stay informed about our business by attending meetings of our board of directors and its committees and through supplemental reports and communications. Our independent directors will meet regularly in executive sessions without the presence of our corporate officers or non-independent directors.

Role of Our Board in Risk Oversight

One of the key functions of our board of directors will be informed oversight of our risk management process. Our board of directors will administer this oversight function directly, with support from its three standing committees, our audit committee, our compensation committee and our nominating and corporate governance committee, each of which will address risks specific to their respective areas of oversight. For example, our audit committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. Our audit committee also will monitor compliance with legal and regulatory requirements and oversee the performance of our internal audit function. Our compensation committee will assess and monitor whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. Our nominating and corporate governance committee will monitor the effectiveness of our corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct.

Our board of directors and its standing committees also will hear reports from the members of management responsible for the matters considered in order to enable our board of directors and each committee to understand and discuss risk identification and risk management.

161

Board Committees

Upon the completion of this offering, our board of directors will establish three standing committees consisting solely of independent directors, the principal functions of which are briefly described below. Our board of directors may from time to time establish other committees to facilitate the governance of our company.

Audit Committee

Our audit committee will consist of Mr. Barter, Mr. Marino and Mr. Miller, and Mr. Barter will serve as its chairperson. We expect that the chairperson of our audit committee will qualify as an “audit committee financial expert” as that term is defined by the applicable SEC regulations and NYSE corporate governance listing standards. We expect that our board of directors will determine that each of the audit committee members is “financially literate” as that term is defined by the NYSE corporate governance listing standards. Prior to the completion of this offering, we expect to adopt an audit committee charter, which will detail the principal functions of the audit committee, including overseeing:

review of all related party transactions in accordance with our related party transactions policy;

our accounting and financial reporting processes;

the integrity and audits of our consolidated financial statements and financial reporting process;

our systems of disclosure controls and procedures and internal control over financial reporting;

our compliance with financial, legal and regulatory requirements;

the evaluation of the qualifications, independence and performance of our independent registered public accounting firm;

the performance of our internal audit function; and

our overall risk profile.

Our audit committee will also be responsible for engaging an independent registered public accounting firm, reviewing with the independent registered public accounting firm the plans and results of the audit engagement, approving professional services provided by the independent registered public accounting firm, including all audit and non-audit services, reviewing the independence of the independent registered public accounting firm, considering the range of audit and non-audit fees and reviewing the adequacy of our internal accounting controls. Our audit committee will also approve the audit committee report required by SEC regulations to be included in our annual proxy statement.

Compensation Committee

Our compensation committee will consist of Mr. Grabe, Ms. Kinney and Mr. Trahanas, and Mr. Grabe will serve as its chairperson. Prior to the completion of this offering, we will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:

reviewing and approving on an annual basis the corporate goals and objectives relevant to our chief executive officer’s compensation, evaluating our chief executive officer’s performance in light of such goals and objectives and determining and approving the remuneration of our chief executive officer based on such evaluation;

reviewing and approving the compensation of our other executive officers;

reviewing our executive compensation policies and plans;

implementing and administering our incentive and equity-based compensation plans;

162

determining the number of shares underlying, and the terms of, share option and restricted share awards to be granted to our directors, executive officers and other employees pursuant to these plans;

assisting management in complying with our proxy statement and annual report disclosure requirements;

producing a report on executive compensation to be included in our annual proxy statement; and

reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee will consist of Ms. Kinney, Mr. Miller and Mr. Marino, and Ms. Kinney will serve as its chairperson. Prior to the completion of this offering, we will adopt a nominating and corporate governance committee charter, which will detail the principal functions of the nominating and corporate governance committee, including:

identifying, recruiting and recommending to the full board of directors qualified candidates for election as directors and recommending a slate of nominees for election as directors at each annual meeting of stockholders;

developing and recommending to the board of directors corporate governance guidelines, including the committee’s selection criteria for director nominees, and implementing and monitoring such guidelines;

reviewing and making recommendations on matters involving the general operation of the board of directors, including board size and composition, and committee composition and structure;

recommending to the board of directors nominees for each committee of the board of directors;

annually facilitating the assessment of the board of directors’ performance as a whole and of the individual directors, as required by applicable law, regulations and the NYSE corporate governance listing standards; and

overseeing the board of directors’ evaluation of management.

Code of Business Conduct and Ethics

Our board of directors will establish a code of business conduct and ethics that applies to our officers, directors and employees. Among other matters, our code of business conduct and ethics will be designed to deter wrongdoing and to promote:

honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications;

compliance with applicable governmental laws, rules and regulations;

prompt internal reporting of violations of the code to appropriate persons identified in the code; and

accountability for adherence to the code.

Only our audit committee will be able to approve any waiver of the code of business conduct and ethics for our executive officers or directors, and any such waiver shall be promptly disclosed as required by law or NYSE regulations.

163

Executive Compensation

Compensation Discussion and Analysis

We believe that the primary goal of executive compensation is to align the interests of our executive officers with those of our stockholders in a way that allows us to attract and retain the best executive talent. Our board of directors has not yet formed our compensation committee. Accordingly, we have not adopted compensation policies with respect to, among other things, setting base salaries, awarding bonuses or making future grants of equity awards to our executive officers. We anticipate that the compensation committee, once formed, will design a compensation program that rewards, among other things, favorable stockholder returns, share appreciation, our company’s competitive position within its segment of the real estate industry, the successful completion of planned facility expansions described in this prospectus and each executive officer’s long-term career contributions to our company. In addition, our compensation committee may determine to make awards to new executive officers in order to attract talented professionals to serve us. We expect that compensation incentives designed to further these goals will take the form of annual cash compensation and equity awards and long-term cash and equity incentives measured by performance targets to be established by our compensation committee. We will pay base salaries and annual bonuses and expect to make equity grants under our equity incentive plan to our executive officers, effective upon completion of this offering. These awards under our equity incentive plan will be granted to recognize such individuals’ efforts on our behalf in connection with this offering and to provide a retention element to their compensation.

Our “named executive officers” during 2013 are expected to be: Chad L. Williams, our Chairman and Chief Executive Officer, William H. Schafer, our Chief Financial Officer, James H. Reinhart, our Chief Operating Officer—Operations, Daniel T. Bennewitz, our Chief Operating Officer—Sales & Marketing, and Jeffrey H. Berson, our Chief Investment Officer.

Executive Officer Compensation

The following is a summary of the elements of and amounts expected to be paid under our compensation plans for fiscal year 2013. Because we were only recently formed, meaningful individual compensation information is not available for prior periods. Excluding our predecessor, no compensation will be paid by us in 2013 to our executive officers until the completion of this offering.

The anticipated annualized 2013 compensation for each of our executive officers listed in the table below was determined based on a review of publicly-disclosed compensation packages of executives of other public real estate companies and negotiations with the executive officers. We did not retain a compensation consultant . Our executive officers either are currently or, prior to completion of this offering, will become parties to employment agreements with our predecessor, which will continue for their respective terms or until such time as the compensation committee determines in its discretion that revisions to such employment agreements are advisable and we and the executive officer agree to the proposed revisions. We expect that the employment agreements to be entered into prior to completion of this offering will provide compensation to the executive at substantially the same level currently provided to that executive.

Annual Base Salary. Base salary will be designed to compensate our executive officers at a fixed level of compensation that serves as a retention tool throughout the executive’s career. In determining base salaries, we expect that our compensation committee will consider each executive’s role and responsibility, unique skills, future potential with our company, salary levels for similar positions in our target market and internal pay equity.

Annual Cash Bonus. Annual cash bonuses will be designed to incentivize our executive officers at a variable level of compensation based on the performance of both our company and such

164

individual. In connection with our annual cash bonus decisions, we expect that our compensation committee will determine annual performance criteria that are flexible and that change with the needs of our business. Our annual cash bonuses will be designed to reward the achievement of specific, pre-established financial and operational objectives.

Equity Awards. We will provide equity awards pursuant to our equity incentive plan. Equity awards will be designed to focus our executive officers on and reward them for achieving our long-term goals and enhancing stockholder value. In determining equity awards, we anticipate that our compensation committee will take into account our company’s overall financial performance. The awards expected to be made under our equity incentive plan upon consummation of this offering will be granted to recognize such individuals’ efforts on our behalf in connection with this offering and to provide a retention element to their compensation.

Retirement Savings Opportunities. All eligible employees will be able to participate in a 401(k) Retirement Savings Plan, or 401(k) plan. We intend to provide this plan to help our employees save some amount of their cash compensation for retirement in a tax efficient manner. Under the 401(k) plan, employees will be eligible to defer a portion of their salary, and we, at our discretion, may make a matching contribution and/or a profit sharing contribution. We do not intend to provide an option for our employees to invest in our shares through the 401(k) plan.

Health and Welfare Benefits. We intend to provide a competitive benefits package to all full-time employees which is expected to include health and welfare benefits, such as medical, dental, disability insurance and life insurance benefits. The plans under which these benefits will be offered are not expected to discriminate in scope, terms or operation in favor of executive officers and will be available to all full-time employees.

Summary Compensation Table

The following table sets forth on an annualized basis for 2013 the annual base salary and other compensation expected to be payable to each of our executive officers as of the completion of this offering. Our predecessor has entered into, or prior to consummation of this offering will enter into, employment-related arrangements with these executive officers. See “—Employment Agreements.”


Name	Year		Salary ($)(1)		Bonus ($)(2)			Stock Awards ($)(3)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	All Other Compensation ($)	Total ($)
Chad L. Williams		2013	$	550,000		(2	)	$	$	$	$	$
William H. Schafer		2013	$	350,000		(2	)	$	$	$	$	$
James H. Reinhart		2013	$	350,000		(2	)	$	$	$	$	$
Daniel T. Bennewitz		2013	$	350,000		(2	)	$	$	$	$	$
Jeffrey H. Berson		2013	$	325,000		(2	)	$	$	$	$	$

(1)	Salary is presented on an annualized basis.

(2)	Bonuses for 2013 will be awarded by our compensation committee after the end of this fiscal year based on a combination of individual and corporate performance.

(3)	Reflects the annualized value of restricted stock awards to be granted under our equity incentive plan concurrently with the completion of this offering. These awards will vest ratably over years.

2013 Equity Incentive Plan

Prior to the completion of this offering, our board of directors will adopt, and our stockholders will approve, our 2013 Equity Incentive Plan, or equity incentive plan, for the purpose of attracting and retaining non-employee directors, executive officers and other key employees and service providers, including officers and employees of our affiliates, and to stimulate their efforts toward our continued success, long-term growth and profitability. The equity incentive plan provides for the grant of options

165

to purchase shares of common stock, share awards (including restricted shares and share units), stock appreciation rights, performance shares, performance units and other equity-based awards, including LTIP units. We have reserved a total of shares of common stock for issuance pursuant to our equity incentive plan (which number includes the restricted shares to be issued under our equity incentive plan in connection with this offering and options to acquire shares of Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) to be issued under our equity incentive plan to former holders of Class O LTIP units), subject to certain adjustments set forth in the plan. Each long-term incentive unit issued under the equity incentive plan will count as one share of common stock for purposes of calculating the limit on shares of common stock that may be issued under the plan. This following is a summary of material provisions of the equity incentive plan.

Section 162(m) of the Code. Section 162(m) of the Code limits publicly held companies to an annual deduction for federal income tax purposes of $1,000,000 for compensation paid to each of their chief executive officer and their three highest compensated executive officers (other than the chief executive officer or the chief financial officer) determined at the end of each year, referred to as covered employees. However, performance-based compensation and compensation meeting applicable transition rule requirements are excluded from this limitation. The equity incentive plan is designed to permit the compensation committee to grant awards that qualify as performance-based for purposes of satisfying the conditions of Section 162(m) once the transitional rule requirements are no longer applicable, but it is not required under the equity incentive plan that awards qualify for this exception. Substantially all of the services rendered by our executive officers were performed on behalf of our operating partnership. The IRS has issued a series of private letter rulings indicating that officers of a REIT that serves as its general partner are not subject to limitation under Section 162(m) to the extent such compensation is attributable to services rendered to the operating partnership. Although we have not obtained a ruling on this issue, we believe the position taken in the rulings would apply to our operating partnership as well once the Section 162(m) transitional rule requirements are no longer applicable.

Administration of the Equity Incentive Plan. The equity incentive plan will be administered by our compensation committee, and the compensation committee will determine all terms of awards under the equity incentive plan. Our compensation committee will also determine who will receive awards under the equity incentive plan, the type of award and its terms and conditions and the number of shares of common stock subject to the award, if the award is equity-based. The compensation committee will also interpret the provisions of the equity incentive plan. During any period of time in which we do not have a compensation committee, the equity incentive plan will be administered by our board of directors or another committee appointed by the board of directors. References below to the compensation committee include a reference to the board of directors or another committee appointed by the board of directors for those periods in which the board of directors or such other committee appointed by the board of directors is acting.

Eligibility. All of our employees and the employees of our subsidiaries and affiliates, including our operating partnership, will be eligible to receive awards under the equity incentive plan. In addition, our non-employee directors and consultants and advisors who perform services for us and our subsidiaries and affiliates may receive awards under our equity incentive plan, other than incentive stock options. The equity incentive plan provides that no participant in the plan will be permitted to acquire, or will have any right to acquire, shares of common stock thereunder if such acquisition would be prohibited by the stock ownership limits contained in our charter or would impair our status as a REIT. Each member of our compensation committee that administers the equity incentive plan will be both a “non-employee director” within the meaning of Rule 16b-3 of the Securities Exchange Act, as amended, and an “outside director” within the meaning of Section 162(m) of the Code.

Share Authorization. A total of shares of common stock may be issued under the equity incentive plan. In connection with share splits, dividends, recapitalizations and certain other

166

events, our board will make proportionate adjustments that it deems appropriate in the aggregate number of shares of common stock that may be issued under the equity incentive plan and the terms of outstanding awards. If any options or share appreciation rights terminate, expire or are canceled, forfeited, exchanged or surrendered without having been exercised or paid or if any share awards, performance shares, performance units or other equity-based awards are forfeited or expire or otherwise terminate without the delivery of any shares of common stock or are settled in cash, the shares of common stock subject to such awards will again be available for purposes of the equity incentive plan.

The maximum number of shares of common stock subject to options or share appreciation rights that may be issued under our equity incentive plan to any person is shares in any single calendar year (or in the year that the person is first employed). The maximum number of shares that may be issued under the equity incentive plan to any person other than pursuant to an option or share appreciation right is shares in any single calendar year (or in the year that the person is first employed). The maximum amount that may be earned as an annual incentive award or other cash award in any calendar year by any one person is (or in the year that the person is first employed) and the maximum amount that may be earned as a performance award or other cash award in respect of a performance period of longer than one year by any one person is (or for a performance period beginning with or immediately after the year that the person is first employed).

No awards under the 2013 equity incentive plan were outstanding prior to completion of this offering. The initial awards described above will become effective upon completion of this offering.

Options. Our equity incentive plan authorizes our compensation committee to grant incentive stock options (under Section 421 of the Code) and options that do not qualify as incentive stock options. The exercise price of each option will be determined by the compensation committee, provided that the price cannot be less than 100% of the fair market value of the shares of common stock on the date on which the option is granted. If we were to grant incentive stock options to any 10% stockholder, the exercise price may not be less than 110% of the fair market value of our shares of common stock on the date of grant.

The term of an option may not exceed ten years from the date of grant. The compensation committee determines at what time or times each option may be exercised and the period of time, if any, after death, disability or other termination of employment during which options may be exercised. Options may be made exercisable in installments. The exercisability of options may be accelerated by the compensation committee. The exercise price of an option may not be amended or modified after the grant of the option, except in connection with certain corporate events, and an option may not be surrendered in consideration of or exchanged for a grant of a new option having an exercise price below that of the option which was surrendered or exchanged without stockholder approval.

The exercise price for any option or the purchase price for restricted shares will be generally payable (i) in cash, (ii) to the extent the award agreement provides, by the surrender of shares of common stock (or attestation of ownership of shares of common stock) with an aggregate fair market value on the date on which the option is exercised of the exercise price, or (iii) to the extent the award agreement provides, by payment through a broker in accordance with procedures established by the Federal Reserve Board.

Share Awards. The equity incentive plan also provides for the grant of share awards. A share award is an award of shares of common stock that may be subject to restrictions on transferability and other restrictions as our compensation committee determines in its sole discretion on the date of grant.

The restrictions, if any, may lapse over a specified period of time or through the satisfaction of

167

conditions, in installments or otherwise, as our compensation committee may determine. A participant who receives a share award will have all of the rights of a stockholder as to those shares, including, without limitation, the right to vote and the right to receive dividends or distributions on the shares, except that the board of directors may require any dividends to be reinvested in shares or may require cash dividends to be paid upon vesting of the underlying shares. During the period, if any, when share awards are non-transferable or forfeitable, a participant will be prohibited from selling, transferring, pledging, exchanging, hypothecating or otherwise disposing of his or her award shares. Our company will retain custody of the certificates and a participant must deliver a stock power to our company for each share award.

Share Appreciation Rights. Our equity incentive plan authorizes our compensation committee to grant share appreciation rights that provide the recipient with the right to receive, upon exercise of the share appreciation right, cash, shares of common stock or a combination of the two. The amount that the recipient will receive upon exercise of the share appreciation right generally will equal the excess of the fair market value of our common stock on the date of exercise over the shares’ fair market value on the date of grant. Share appreciation rights will become exercisable in accordance with terms determined by our compensation committee. Share appreciation rights may be granted in tandem with an option grant or independently from an option grant. The term of a share appreciation right may not exceed ten years from the date of grant.

Performance Units. Our equity incentive plan also authorizes our compensation committee to grant performance units. Performance units represent the participant’s right to receive a compensation amount, based on the value of the shares of common stock, if performance goals established by the compensation committee are met. Our compensation committee will determine the applicable performance period, the performance goals and such other conditions that apply to the performance unit. Performance goals may relate to our financial performance, the participant’s performance or such other criteria determined by the compensation committee. If the performance goals are met, performance units will be paid in cash, shares of common stock or a combination thereof.

Bonuses. Cash performance bonuses payable under the equity incentive plan may be based on the attainment of performance goals that are established by the compensation committee and relate to one or more performance criteria described in the plan. Cash performance bonuses granted under the equity incentive plan will be based upon objectively determinable bonus formulas established in accordance with the plan.

Dividend Equivalents. Our compensation committee may grant dividend equivalents in connection with the grant of any equity-based award. Dividend equivalents may be paid currently or accrued as contingent cash obligations and may be payable in cash, shares of common stock or a combination of the two. Our compensation committee will determine the terms of any dividend equivalents. No dividend equivalent rights may be granted in tandem with an option or stock appreciation right.

Other Equity-Based Awards. Our compensation committee may grant other types of share-based awards under the equity incentive plan, including LTIP units. Other equity-based awards are payable in cash, shares of common stock or other equity, including LTIP units, or a combination thereof, and may be restricted or unrestricted, as determined by our compensation committee. The terms and conditions that apply to other equity-based awards will be determined by the compensation committee.

LTIP units are a special class of limited partnership units in our operating partnership that are structured to qualify as “profits interests” for tax purposes, with the result that at issuance they have no capital account in the operating partnership. Any LTIP units issued by our operating partnership may be subjected to vesting requirements as determined by the compensation committee of our board of directors.

168

Our operating partnership currently has authorized and outstanding two classes of LTIP units—Class RS LTIP units and Class O LTIP units. Following completion of this offering, all outstanding Class O LTIP units will be converted into OP units in accordance with their terms. See “Structure and Formation of our Company.”

Vested Class RS LTIP units receive the same quarterly per unit profit distributions as the other outstanding OP units in our operating partnership. Unvested Class RS LTIP units do not receive distributions until they become vested, at which time they are entitled to distributions plus catch-up distributions for the period during which such units were not vested. Initially, each Class RS LTIP unit will have a capital account of zero, and, therefore, the holder of the Class RS LTIP unit would receive nothing if our operating partnership were liquidated immediately after the Class RS LTIP unit is awarded. However, the partnership agreement requires that “book gain” or economic appreciation in our assets realized by our operating partnership, whether as a result of an actual asset sale or upon the revaluation of our assets, as permitted by applicable Treasury Regulations, be allocated first to the Class RS LTIP units until the capital account per Class RS LTIP unit is equal to the capital account per OP unit. The applicable Treasury Regulations and our amended partnership agreement provide that assets of our operating partnership may be revalued upon specified events, including upon additional capital contributions by us or other partners of our operating partnership, upon a distribution by our operating partnership to a partner in redemption of partnership interests, upon the liquidation of the operating partnership or upon a later issuance of additional LTIP units. Each Class RS LTIP unit is convertible by our operating partnership or by the holder into OP units at any time, and upon equalization of the capital account of a Class RS LTIP unit with the per unit capital account of the OP units (and full vesting of the Class RS LTIP unit, if such unit is subject to vesting), the Class RS LTIP unit will be convertible into one OP unit, subject to certain exceptions and adjustments. There is a risk that a Class RS LTIP unit will never become convertible into one OP unit because of insufficient gain realization to equalize capital accounts, and, therefore, the value that a holder will realize for a given number of vested Class RS LTIP units may be less than the value of an equal number of shares of our common stock.

Class O LTIP units do not participate in quarterly per unit profit distributions. Initially, each Class O LTIP unit will have a capital account of zero and, therefore, the holder of the Class O LTIP unit would receive nothing if our operating partnership were liquidated immediately after the Class O LTIP unit is awarded. However, the partnership agreement requires that “book gain” or economic appreciation in our assets realized by our operating partnership, whether as a result of an actual asset sale or upon the revaluation of our assets, as permitted by applicable Treasury Regulations, be allocated to the Class O LTIP units (after allocations to the Class RS LTIP units and together with the OP units) until the capital account per Class O LTIP unit is equal to the excess of the capital account per OP unit over the amount of such capital account on the date of issuance of the Class O LTIP unit. Each Class O LTIP unit is convertible by our operating partnership or by the holder into OP units at any time, and upon such equalization of the capital account of a Class O LTIP unit (and full vesting of the Class O LTIP unit, if such unit is subject to vesting and being converted by holder), the Class O LTIP unit will be convertible into a number of OP units equal to (i) the Class O LTIP unit’s capital account divided by (ii) the capital account balance of an OP unit (i.e., in a manner similar to a typical stock appreciation right), subject to certain exceptions and adjustments. There is a risk that a Class O LTIP unit will never become convertible into such amount of OP units because of insufficient gain realization to equalize capital accounts, and, therefore, the value that a holder will realize for a given number of vested Class O LTIP units may be less than the value of an equal number of shares of our common stock.

See “Description of the Partnership Agreement of QualityTech, LP” for a further description of the rights of limited partners in our operating partnership.

Recoupment . Award agreements for awards granted pursuant to our equity incentive plan may be subject to mandatory repayment by the recipient to us of any gain realized by the recipient to the

169

extent the recipient is in violation of or in conflict with certain agreements with us (including but not limited to an employment or non-competition agreement) or upon termination for “cause” as defined in our equity incentive plan, applicable award agreement, or any other agreement between us and the grantee. Reimbursement or forfeiture also applies if we are required to prepare an accounting restatement due to our material noncompliance, as a result of misconduct, with any financial reporting requirement under the securities laws or if an award was earned or vested based on achievement of pre-established performance goals that are later determined, as a result of the accounting restatement, not to have been achieved. Awards are also subject to mandatory repayment to the extent the grantee is or becomes subject to any clawback or recoupment right we may have.

Change in Control. If we experience a change in control in which outstanding options, share appreciation rights, share awards, performance shares, performance units or other equity-based awards will not be assumed or continued by the surviving entity: (i) all restricted shares will vest, and all share units will vest and the underlying shares will be delivered immediately before the change in control, and (ii) at the board of directors’ discretion either all options and share appreciation rights will become exercisable 15 days before the change in control and terminate upon the consummation of the change in control, or all options, share appreciation rights, restricted shares and share units will be cashed out before the change in control. In the case of performance shares and performance units, if more than half of the performance period has lapsed, the performance shares will be converted into restricted shares based on actual performance to date. If less than half of the performance period has lapsed, or if actual performance is not determinable, the performance shares will be converted into restricted shares assuming target performance has been achieved.

In summary, a change in control under the equity incentive plan occurs if:

a person, entity or affiliated group (with certain exceptions) acquires, in a transaction or series of transactions, more than 50% of the total combined voting power of our outstanding securities;

we experience a reorganization, merger, consolidation or sale or other disposition of all or substantially all of our assets, unless (i) the holders of our voting shares immediately prior to the merger have at least 50% of the combined voting power of the securities in the surviving entity or its parent in substantially the same proportions as before the transaction, (ii) no person owns 35% or more of the shares of the surviving entity unless such ownership existed before the transaction, and (iii) at least a majority of the members of the board of the surviving entity were members of our incumbent board when the transaction was approved;

we are liquidated or dissolved; or

individuals who, when the plan is adopted, constitute our board of directors cease for any reason to constitute a majority of our board of directors, treating any individual whose election or nomination was approved by a majority of the incumbent directors as an incumbent director for this purpose.

Amendment; Termination. Our board of directors may amend or terminate the equity incentive plan at any time; provided that no amendment may adversely impair the benefits of participants with outstanding awards. Our stockholders must approve any amendment if such approval is required under applicable law or stock exchange requirements. Our stockholders also must approve any amendment that changes the no-repricing provisions of the plan. Unless terminated sooner by our board of directors or extended with stockholder approval, the equity incentive plan will terminate on the tenth anniversary of the adoption of the plan.

170

2010 Equity Incentive Plan

On May 26, 2010, the board of directors of our operating partnership’s then-general partner approved the QualityTech, LP 2010 Equity Incentive Plan, or the 2010 Plan, for the purpose of granting awards of unit options, restricted units and profits interests in the operating partnership to employees, directors and other service providers of the operating partnership. We will make no further awards under the 2010 Plan. Upon the completion of this offering, the only awards that will remain outstanding under the 2010 Plan are expected to be 176,250 Class RS LTIP units.

Upon completion of this offering, the 2010 Plan will be administered by our board of directors, and the board will interpret the provisions of the 2010 Plan. Our board of directors may amend or terminate the 2010 Plan at any time; provided that no amendment may adversely impair the benefits of participants with outstanding awards. Our stockholders must approve any amendment if such approval is required under applicable law or stock exchange requirements. Unless terminated sooner by our board of directors or extended with stockholder approval, the equity incentive plan will terminate on the tenth anniversary of the adoption of the plan.

The outstanding Class RS LTIP units, which were first granted in 2010, are subject to four-year time and performance vesting, provided that the performance vested units will automatically vest in full on March 1, 2016 if not previously vested. In the event of a change of control (as defined in the 2010 Plan) of the operating partnership, any unvested Class RS LTIP units will become immediately vested.

A “change in control” under the 2010 Plan occurs if:

A person, entity or affiliated group (with certain exceptions) acquires beneficial ownership, directly or indirectly, of 50% or more of the voting power of QualityTech’s outstanding voting securities;

During any period of twelve months, individuals who at the beginning of the period constitute the board of directors of the operating partnership’s then-general partner and any new director whose election was approved by vote of at least a majority of the directors then in office, cease to constitute at least a majority of the board of directors of operating partnership’s then-general partner;

The partners of the operating partnership approve a merger with any other entity other than a merger which results in voting securities of the operating partnership outstanding immediately before the merger continuing to represent at least 50.1% of the voting power of the operating partnership or the entity surviving the merger; or

There is a sale or disposition by the operating partnership of all or substantially all of its assets.

Employment Agreements

We have entered into employment agreements with each of Messrs. Williams, Schafer, Reinhart, Bennewitz and Berson and Ms. Goza.

Williams Employment Agreement

Mr. Williams’ employment agreement will provide for a three-year term with automatic renewal terms of one year, unless either party gives a non-renewal notice within a specified time frame. Mr. Williams will be obligated to devote substantially all of his business time and effort to performance

171

of his duties to us, provided that he will be permitted to engage in other specified activities, including engaging in civic, charitable and religious activities and management of personal investments and affairs, including active involvement in real estate or other investments not involving data centers in any material respect, in each case so long as such activities do not materially and adversely interfere with Mr. Williams’ discharge of his duties and obligations to us.

Mr. Williams’ employment will provide for a base salary of $550,000, a bonus opportunity targeted at 100% of base salary for targeted performance, with additional amounts being paid for exceptional performance as determined by the Compensation Committee, and paid vacation of 25 days or the number of days granted to any other executive, whichever is greater. In addition, upon termination of Mr. Williams’ employment agreement, other than as a result of a termination for “cause” or a resignation without “good reason,” as those terms are defined in the employment agreement, Mr. Williams will, upon execution of a release acceptable to us, be eligible to receive the following benefits in addition to his then-accrued compensation (as defined below):

a lump sum cash payment equal to the sum of (A) two times his then current base salary and (B) two times his annual bonus for the year of termination, calculated assuming achievement of all performance goals necessary to achieve the maximum bonus level;

full vesting of his equity awards; and

the right to continued participation by Mr. Williams and his family members, for a period of 24 months, in our group health plans (or, if the same is not permitted by law or the terms of the plan, reimbursement of the cost of equivalent coverage), subject to reimbursement by Mr. Williams of the cost of such participation by his extended family members.

In the event Mr. Williams is terminated other than as a result of a termination for cause or a resignation without good reason within two years following a “change in control,” Mr. Williams will be eligible to receive the severance compensation set forth above, provided that (1) the payment set forth in the first bullet point set forth above will be calculated with a three times multiple, and (2) Mr. Williams also will be entitled to one year of outplacement services and support. In the event Mr. Williams is terminated as a result of death or disability, he will be eligible to receive the severance compensation set forth above, provided that the payment set forth in the first bullet point set forth above will be calculated with a one times multiple.

Pursuant to Mr. Williams’ employment agreement, we will provide standard company health insurance to cover Mr. Williams and members of his immediate family (and, if coverage of his immediate family is not permitted by law or the terms of the plan, he will be reimbursed for the cost of equivalent coverage). We also will provide standard company health insurance to cover specified members of Mr. Williams’ extended family, provided that Mr. Williams will reimburse us for the cost of such coverage. In addition, Mr. Williams may from time to time seek assistance from two of our employees for personal accounting and financial matters. To the extent that Mr. Williams utilizes other employees for matters unrelated to our business, such arrangements will be in accordance with established procedures, including reimbursement of the reasonable value associated with any material use.

Mr. Williams’ employment agreement generally will define “change in control” as (i) the acquisition by a person, entity or affiliated group, in a transaction or series of transactions, of at least 30% of the total combined voting power of our outstanding securities, (ii) individuals who, at the beginning of any 12 month period, constitute our board of directors cease for any reason to constitute a majority of our board of directors at the end of such 12 month period, treating any individual whose election or nomination was approved by a majority of the incumbent directors as an incumbent director for this

172

purpose, (iii) a merger, consolidation or recapitalization following which voting securities prior to the transaction continue to represent more than 70% of our voting securities after the transaction, or (iv) a sale of all or substantially all of our assets.

Mr. Williams’ employment agreement will provide that, during the term and for a period of one year following his termination, Mr. Williams will not (a) directly or indirectly, engage in any business involving the development, construction, acquisition, ownership or operation of data center properties, colocation facilities and/or the provision of managed services in the United States, whether such business is conducted by the executive individually or as a principal, partner, member, stockholder, joint venturer, director, trustee, officer, employee, consultant, advisor or independent contractor of any person or (b) own any interests in any data center facilities, colocation facilities or managed service providers in the United States, other than up to five percent of the outstanding shares of any public company. Moreover, Mr. Williams’ employment agreement also will provide that, during the term and for a one-year period following his termination, he will not solicit any of our customers for data center space within the United States, encourage any of our customers to reduce their patronage of us, solicit or hire any of our current employees or independent contractors, or encourage any of our employees or independent contractors to terminate their employment with, or cease rendering services to, us. In addition, Mr. Williams’ employment agreement will provide for a confidentiality covenant on the part of Mr. Williams and a covenant that both we and Mr. Williams agree not to talk about or otherwise communicate to any third parties in a malicious, disparaging or defamatory manner regarding the other.

Schafer Amended and Restated Employment Agreement

Mr. Schafer’s amended and restated employment agreement will provide for an initial term expiring March 31, 2016 with automatic renewal terms of one year, unless either party gives a non-renewal notice within a specified time frame. Mr. Schafer will be obligated to devote substantially all of his business time and effort to performance of his duties to us, provided that he will be permitted to engage in other specified activities, including civic, charitable and religious activities and management of personal investments and affairs, so long as such activities do not materially and adversely interfere with Mr. Schafer’s discharge of his duties and obligations to us.

Our employment agreement with Mr. Schafer will provide for a base salary of $350,000, a bonus opportunity targeted at 100% of base salary for threshold performance, with additional amounts being paid for exceptional performance as determined by the Compensation Committee, and four weeks’ paid vacation. In addition, upon termination of Mr. Schafer’s employment agreement, other than as a result of a termination for “cause,” a resignation without “good reason” or a termination following death or disability, as each of those terms are defined in the employment agreement, Mr. Schafer will, upon execution of a release acceptable to us, be eligible to receive the following benefits in addition to his then-accrued compensation (as defined below):

a lump sum cash payment equal to the sum of (A) one times his then current base salary, (B) his prorated bonus for the year of termination, and (C) one times his annual bonus for the year of termination, calculated assuming achievement of all performance goals necessary to achieve the maximum bonus level;

solely in the case of termination without cause or with good reason, vesting of any equity awards that otherwise would have vested during the term in which the termination occurred;

solely in the case of death or disability, full vesting of equity awards; and

continued coverage under our health insurance plans for one year following termination (provided that if such continuation is not possible, we will reimburse an amount equal to the

173

cost of health insurance coverage for Mr. Schafer and his family for one year following his termination that is substantially similar to the coverage provided to Mr. Schafer under our health insurance plans prior to his termination) and reimbursement of premiums for any subsequent COBRA continuation coverage.

In the event Mr. Schafer’s employment is terminated because we elect not to renew his employment agreement, then Mr. Schafer will be deemed to have been terminated without cause and eligible to receive the severance payments set forth above. In addition, in the event Mr. Schafer is terminated other than as a result of a termination for cause or a resignation without good reason within two years following a “change in control,” he will be eligible to receive the following benefits in addition to his then-accrued compensation (as defined below):

reimbursement of the cost of health, disability and accidental death, and dismemberment insurance in an amount not less than that provided at the time of Mr. Schafer’s termination or, if greater, on the date on which the change in control occurred, until the earlier of (x) the date on which Mr. Schafer becomes eligible to receive substantially the same or greater benefits from another employer or (y) the second anniversary of the date of his termination; and

one year of outplacement services and support.

Mr. Schafer’s employment agreement generally defines “change in control” as (i) the acquisition by a person, entity or affiliated group, in a transaction or series of transactions, of at least 30% of the total combined voting power of our outstanding securities, (ii) individuals who, at the beginning of any 12 month period, constitute our board of directors cease for any reason to constitute a majority of our board of directors at the end of such 12 month period, treating any individual whose election or nomination was approved by a majority of the incumbent directors as an incumbent director for this purpose, (iii) a merger, consolidation or recapitalization following which voting securities prior to the transaction continue to represent more than 70% of our voting securities after the transaction, or (iv) a sale of all or substantially all of our assets.

Mr. Schafer’s employment agreement will provide that, during the term and for a period of one year following his termination, he may not, directly or indirectly, own, manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other company, corporation, partnership, proprietorship, firm, association or other business entity engaged in the business of, or otherwise engage in the business of, acquiring, owning, developing or managing data centers, other than the ownership of up to five percent of the outstanding shares of any public company. Moreover, Mr. Schafer’s employment agreement will provide that, during the term and for a one-year period following his termination, he will not solicit any of our customers for data center space within the United States, encourage any of our customers to reduce their patronage of us, solicit or hire any of our current employees or independent contractors or former employees or independent contractors who left employment within the prior year, or encourage any of our employees or independent contractors to terminate their employment with, or cease rendering services to, us. In addition, Mr. Schafer’s employment agreement will provide for a confidentiality covenant on the part of Mr. Schafer and a covenant that both we and Mr. Schafer agree not to talk about or otherwise communicate to any third parties in a malicious, disparaging or defamatory manner regarding the other.

174

Reinhart, Bennewitz, Berson and Goza Employment Agreements

The employment agreements of Messrs’ Reinhart, Bennewitz and Berson and Ms. Goza provide or will provide for a two-year term with automatic renewal terms of one year, unless either party gives a non-renewal notice within a specified time frame. The executive is or will be obligated to devote substantially all of his or her business time and effort to performance of his duties to us, provided that he or she is or will be permitted to engage in other specified activities, including civic, charitable and religious activities and management of personal investments and affairs, so long as such activities do not materially and adversely interfere with his or her discharge of his duties and obligations to us.

Our employment agreements with each of Messrs’ Reinhart, Bennewitz and Berson and Ms. Goza provide or will provide for base salaries of $350,000, $350,000, $325,000 and $250,000, respectively, a bonus opportunity equal to 50% of base salary and four weeks’ paid vacation. In addition, upon termination of these employment agreements, other than as a result of a termination for “cause” or a resignation without “good reason,” as those terms are defined in each employment agreement, the executive will, upon execution of a release acceptable to us, be eligible to receive the following benefits in addition to his or her then-accrued compensation (as defined below):

a lump sum cash payment equal to the sum of (A) one times his or her then current base salary, (B) one times his or her target bonus for the year of termination, and (C) solely in the case of Mr. Berson, if his initial equity award has not been made, a sum of $650,000;

a lump sum cash payment equal to all bonus amounts earned but not yet paid for the year prior to the year of termination;

vesting of any equity awards that otherwise would have vested during the term in which the termination occurred;

solely in the case of Mr. Berson, full vesting of his initial equity awards;

reimbursement of premiums for COBRA continuation coverage; and

one year of outplacement services and support.

In the event of termination for death or disability, executive will receive full vesting of his or her equity awards.

In the event we elect not to renew the initial term of Mr. Reinhart’s or Mr. Bennewitz’s employment agreement, he will be deemed to have been terminated without cause and eligible to receive the severance payments set forth above. Similarly, in the event we elect not to renew the initial term or the next renewal term of Mr. Berson’s employment agreement, he will be deemed to have been terminated without cause and eligible to receive the severance payments set forth above.

The employment agreements of Messrs. Reinhart, Bennewitz and Berson and Ms. Goza provide or will provide that, during the term and for a period of one year following the executive’s termination, the executive will not (a) directly or indirectly, engage in any business involving the development, construction, acquisition, ownership or operation of data center properties, colocation facilities and/or the provision of managed services, whether such business is conducted by the executive individually or as a principal, partner, member, stockholder, joint venturer, director, trustee, officer, employee, consultant, advisor or independent contractor of any person or (b) own any interests in any data center facilities, colocation facilities or managed service providers, in each case in the United States, other than up to five percent of the outstanding shares of any public company. Moreover, each of these employment agreements provides or will provide that, during the term and for a one-year period following the executive’s termination, the executive will not solicit any of our customers for data center space within the United States, encourage any of our customers to reduce their patronage of us, solicit or hire any of our

175

current employees or independent contractors or former employees or independent contractors who left employment within the prior year, or encourage any of our employees or independent contractors to terminate their employment with, or cease rendering services to, us. In addition, each of these employment agreements provides or will provide for a confidentiality covenant on the part of the executive and a covenant that both we and the executive agree not to talk about or otherwise communicate to any third parties in a malicious, disparaging or defamatory manner regarding the other.

Regardless of the reason for any termination of employment, each of our executive officers who is a party to an employment agreement, including Mr. Williams and Mr. Schafer, will be entitled to receive the following upon termination, which is referred to above as “accrued compensation”: (a) the executive’s salary hereunder through the termination date to the extent not theretofore paid; (b) the amount of any accrued but unused vacation pay; (c) any business expense reimbursements incurred by the executive as of the termination date and duly submitted for reimbursement; and (d) any performance bonus or discretionary bonus that has been earned or declared for a bonus period ending before the termination date but not paid before the termination date.

401(k) Plan

Upon completion of this offering, we intend to continue an existing tax qualified retirement plan, or 401(k) Plan, that provides employees with an opportunity to save for retirement on a tax advantaged basis. Employees will be able to participate in the 401(k) Plan after 60 days of employment and are able to defer compensation up to the limits established by the Internal Revenue Service. We currently match 25% of the employees’ contributions up to a maximum match contribution of 4% of the employee’s salary. Our contributions vest over time. The employee contributions and our match will be invested in selected investment alternatives according to the employees’ directions. The 401(k) Plan and its trust are intended to qualify under Sections 401(a) and 501(a) of the Code as a tax qualified retirement plan. Contributions to the 401(k) Plan and earnings on those contributions are not taxable to the employee until distributed from the 401(k) Plan and matching contributions are deductible by us when made subject to applicable Code limits.

Potential Payments Upon Termination or Change-in-Control

The amount of compensation payable to our named executive officers upon voluntary termination by the executive for good reason (including following changes of control), termination by us without good reason (including following changes of control), and termination in the event of permanent disability or death of the executive is set forth below in the section of this prospectus entitled “Executive Compensation—Employment Agreements.” The compensation payable to our named executive officers upon such terminations will be paid in a single lump sum. The other benefits will be conditioned upon the executive’s continued compliance with the non-competition, non-solicitation, confidentiality and other covenants contained in the employment agreement. All of the foregoing benefits are conditioned upon the executive’s execution of a general release of claims.

176

The following table summarizes the potential cash payments and estimated equivalent cash value of benefits that will be generally owed to our named executive officers under the terms of their employment agreements described above upon termination of those agreements under various scenarios as of December 31, 2013:

Name

Without Cause/
For Good
Reason(1)(2)

Without Cause/
For Good Reason upon
a Change in Control(1)(2)

Death/
Disability

Chad L. Williams

William H. Schafer

James H. Reinhart

Daniel T. Bennewitz

Jeffrey H. Berson

(1)	Includes annualized 2013 salary. Reflects the potential bonus under the employment agreement for each executive.

(2)	Excludes the value of (i) health benefit continuation for months and (ii) unvested restricted shares of common stock grants that would vest upon each termination.

Director Compensation

Excluding our predecessor, we have not paid any cash compensation or granted any equity-based awards to any of the members of our board of directors. Upon completion of this offering, each of our non-employee directors, other than Mr. Miller, Mr. Westhead and Ms. Kinney, will receive an initial grant of shares of common stock (based on the mid-point of the price range on the front cover of this prospectus), which are expected to vest one year after the date of grant. Mr. Miller, Mr. Westhead and Ms. Kinney previously received grants of Class O LTIP units in connection with joining the board of our predecessor’s general partner. Thereafter, each of our non-employee directors will receive an additional grant of shares of common stock in the amount of $100,000 for each year of service, which are expected to vest ratably over years, and an annual cash retainer of $50,000 for services as a director. Our lead independent director will receive an annual cash retainer of $ . Each committee member will receive an additional $5,000 cash retainer; provided that the chairs of the audit, compensation and nominating and corporate governance committees will receive an additional annual cash retainer of $15,000. Each non-employee director will be entitled to elect to receive their annual retainers in cash or shares of common stock. Directors who are employees of our company or our subsidiaries, or are otherwise not considered to be independent under the applicable rules of the NYSE, will not receive compensation for their services as directors. All of our directors will be reimbursed for their out-of-pocket expenses incurred in connection with the performance of board duties.

Outside Business Interests

Mr. Williams and his affiliates will continue to own various interests in certain real estate assets, none of which (other than the Overland Park data center, which we currently lease) contain any data centers or competes with our data center properties. Mr. Williams’ and his affiliates’ interests including the following:

the office building located in Overland Park, Kansas at which we currently lease the Overland Park data center and office space for our corporate headquarters; for a description of this lease, see “Certain Relationships and Related Party Transactions—Office and Data Center Lease”;

two office buildings located in Tucson, Arizona that are leased to the National Park Service and the Federal Bureau of Investigations;

an office building located in Independence, Missouri that is leased to the U.S. General Services Administration for the National Parks Service; and

a building in Roseville, California that is leased to one tenant and two adjoining vacant lots.

177

In addition, Mr. Williams and his affiliates will continue to own various interests in and operate certain non-real estate businesses, including:

Quality Office Interiors, Inc., or Quality Office, which is an office equipment sales company;

Quality Auto Group, Inc., or Quality Auto, which is an auto sales and brokerage company;

Quality Lease & Finance, L.L.C., or Quality Lease & Finance, which is an equipment leasing company; and

Quality Auto Brokers, Inc., or Quality Auto Brokers, which is an auto sales and brokerage company.

Mr. Williams will agree in his employment agreement to dedicate substantially all of his time to our company. See “Management—Employment Agreements.”

Limitation of Liability and Indemnification Agreements

We intend to enter into indemnification agreements with each of our executive officers and directors that will obligate us to indemnify them to the maximum extent permitted by Maryland law. The form of indemnification agreement will provide that:

if a director or executive officer is a party or is threatened to be made a party to any proceeding by reason of such director’s or executive officer’s status as a director, officer or employee of our company, we must indemnify such director or executive officer for all reasonable expenses and liabilities actually incurred by him or her, or on his or her behalf, unless it has been established that:

the act or omission of the director or executive officer was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty;

the director or executive officer actually received an improper personal benefit in money, property or services; or

with respect to any criminal action or proceeding, the director or executive officer had reasonable cause to believe that his or her conduct was unlawful;

provided, however, that we will (i) have no obligation to indemnify such director or executive officer for a proceeding by or in the right of our company, for reasonable expenses and liabilities actually incurred by him or her, or on his or her behalf, if it has been adjudged that such director or executive officer is liable to us with respect to such proceeding and (ii) have no obligation to indemnify or advance expenses of such director or executive officer for a proceeding brought by such director or executive officer against the company, except for a proceeding brought to enforce indemnification under Section 2-418 of the MGCL or as otherwise provided by our bylaws, our charter, a resolution of the board of directors or an agreement approved by the board of directors. Under the MGCL, a Maryland corporation may not indemnify a director or officer in a suit by or in the right of the corporation in which the director or officer was adjudged liable on the basis that a personal benefit was improperly received.

Upon application of a director or executive officer of our company to a court of appropriate jurisdiction, the court may order indemnification of such director or executive officer if:

the court determines that such director or executive officer is entitled to indemnification under Section 2-418(d)(1) of the MGCL, in which case the director or executive officer shall be entitled to recover from us the expenses of securing such indemnification; or

the court determines that such director or executive officer is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director or

178

executive officer has met the standards of conduct set forth in Section 2-418(b) of the MGCL or has been adjudged liable for receipt of an “improper personal benefit” under Section 2-418(c) of the MGCL; provided, however, that our indemnification obligations to such director or executive officer will be limited to the expenses actually and reasonably incurred by him or her, or on his or her behalf, in connection with any proceeding by or in the right of our company or in which the officer or director shall have been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL.

Notwithstanding, and without limiting any other provisions of the indemnification agreements, if a director or executive officer is a party or is threatened to be made a party to any proceeding by reason of such director’s or executive officer’s status as our director, officer or employee, and such director or executive officer is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such proceeding, we must indemnify such director or executive officer for all expenses actually and reasonably incurred by him or her, or on his or her behalf, in connection with each successfully resolved claim, issue or matter, including any claim, issue or matter in such a proceeding that is terminated by dismissal, with or without prejudice.

We must pay all indemnifiable expenses in advance of the final disposition of any proceeding if the director or executive officer furnishes us with a written affirmation of the director’s or executive officer’s good faith belief that the standard of conduct necessary for indemnification by us has been met and a written undertaking to reimburse us if a court of competent jurisdiction determines that the director or executive officer is not entitled to indemnification. In addition, with respect to any director, we will be the indemnitor of first resort to the extent that such director simultaneously is entitled to indemnification from General Atlantic with respect to any of the same matters for which we are obligated to provide indemnification pursuant to the applicable indemnification agreement.

In addition to the indemnification agreements, our charter and bylaws obligate us, to the maximum extent permitted by Maryland law, to indemnify and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (1) any of our present or former directors or officers who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (2) any individual who, while serving as our director or officer and at our request, serves or has served another corporation, REIT, partnership, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner or trustee of such corporation, REIT, partnership, joint venture, trust, employee benefit plan or other enterprise, and who is made or threatened to be made a party to the proceeding by reason of his service in that capacity.

Rule 10b5-1 Sales Plans

Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. The director or executive officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information subject to compliance with the terms of our insider trading policy. Prior to the -day anniversary of the date of this prospectus (subject to potential extension or early termination), the sale of any shares under such plan would be subject to the lock-up agreement that the director or executive officer has entered into with the underwriters.

Compensation Committee Interlocks and Insider Participation

Upon completion of this offering and our formation transactions, we do not anticipate that any of our executive officers will serve as a member of a board of directors or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our board of directors or compensation committee.

179

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Formation Transactions

Prior to or concurrently with the completion of this offering, we will consummate a series of transactions pursuant to which we will become the sole general partner and majority owner of QualityTech, LP, our predecessor, which then will become our operating partnership. As part of these transactions, General Atlantic REIT, Inc., or GA REIT, the current holder of a majority of the limited partnership interests in our operating partnership, will merge with and into us and we will succeed to GA REIT’s majority limited partnership interest in our operating partnership. GA REIT owns no assets other than its interest in our operating partnership. Pursuant to this merger, we will issue shares of our Class A common stock to General Atlantic, which is the sole common shareholder of GA REIT, and $105,000 in cash (plus accumulated dividends, if any) will be paid to the preferred shareholders of GA REIT, in each case as consideration for their shares of GA REIT. In addition, Mr. Williams will contribute to our operating partnership all of his ownership interests in QualityTech GP, LLC, our predecessor’s general partner, in exchange for 1,000 OP units. Following this contribution, we will be the general partner of our operating partnership and will dissolve QualityTech GP, LLC. Finally, we will issue an aggregate of shares of our Class B common stock to Mr. Williams in exchange for an equivalent number of OP units held by him.

We did not obtain any independent third-party appraisals of the properties or other assets currently owned by our operating partnership. Therefore, the actual value of the shares of Class A common stock and Class B common stock and OP units to be issued by us and our operating partnership in our formation transactions ultimately will be determined at pricing based on the initial public offering price of our Class A common stock. For information regarding the determination of the initial public offering price of our Class A common stock, see “Structure and Formation of Our Company—Determination of Offering Price.”

Merger Agreement

We will acquire a majority of the outstanding limited partnership interests in our operating partnership pursuant to a merger agreement between us and GA REIT. GA REIT is an existing partner in our operating partnership, and its sole asset is its interests in our predecessor. The sole common stockholder of GA REIT is General Atlantic. Pursuant to the merger agreement, GA REIT will merge with and into us and we will remain as the surviving entity in a transaction intended to be tax-free for General Atlantic and us. We will succeed to all of GA REIT’s limited partnership interests in our operating partnership. As a result of this merger agreement, General Atlantic will receive shares of our Class A common stock, and the preferred shareholders of GA REIT will receive cash. The merger is subject to all of the terms and conditions of the applicable merger agreement, including the completion of this offering.

Contribution Agreement

Our operating partnership will acquire all of the membership interests in QualityTech GP, LLC, or the Predecessor GP, the current general partner of our operating partnership, pursuant to a contribution agreement with Chad L. Williams, our Chairman and Chief Executive Officer, the sole member of the Predecessor GP. Pursuant to this contribution agreement, Mr. Williams will contribute all of the outstanding membership interests in the Predecessor GP to our operating partnership in exchange for 1,000 OP units. The sole asset of the Predecessor GP is 1,000 limited partnership units in our operating partnership, and after consummation of the formation transactions, we will dissolve the Predecessor GP. Immediately prior to this contribution, we will be admitted as the general partner of our operating partnership. This contribution is subject to all of the terms and conditions of the contribution agreement, including the completion of this offering.

180

Williams Exchange

Mr. Williams has elected to exchange (in a taxable transaction) one OP unit out of every 50 OP units owned by him, his family members or entities owned by or for the benefit of them immediately prior to the commencement of this offering for shares of our Class B common stock on a one-for-one basis. The OP units exchanged will represent 2% of Mr. Williams’ outstanding OP units. Each outstanding share of Class B common stock entitles its holder to 50 votes on all matters on which Class A common stockholders are entitled to vote, including the election of directors, and holders of shares of Class A common stock and Class B common stock will vote together as a single class and receive the same dividends per share. The Class B common stock automatically converts into Class A common stock in certain circumstances and is convertible at any time into Class A common stock at the option of the holder. Our Class B common stock is designed to give Mr. Williams the right to vote that is proportional his economic interest in our company on a fully diluted basis.

Incentive Awards

In connection with our formation transactions, we expect to adopt a cash and equity-based incentive award plan for our directors, officers, employees and consultants. We expect that an aggregate of shares of our Class A common stock and OP units will be available for issuance under awards granted pursuant to our equity incentive plan. Upon completion of this offering, we intend to grant an aggregate of restricted shares of our common stock (based on the mid-point of the price range set forth on the cover of this prospectus), subject to certain vesting requirements, to our directors and executive officers. See “Management—Executive Compensation—2013 Equity Incentive Plan.” In addition, in order to preserve the economic position of the holders of our Class O LTIP units and provide additional incentives, we will convert our outstanding Class O LTIP units into OP units equal in value to the “in the money” portion of such Class O LTIP units, and we will grant to each former holder of Class O LTIP units options to purchase a number of shares of our Class A common stock equal to the number of such holder’s converted Class O LTIP units, which will result in an aggregate grant of options to acquire shares of Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) upon the closing of this offering with an exercise price equal to the public offering price of our Class A common stock in this offering. See “Structure and Formation of Our Company—Formation Transactions.”

Tax Protection Agreement

We will enter into a tax protection agreement with Chad L. Williams, our Chairman and Chief Executive Officer, and his affiliates and family members who own OP units pursuant to which we will agree to indemnify them against certain tax liabilities resulting from: (1) the sale, exchange, transfer, conveyance or other disposition of our Atlanta Metro, Suwanee or Santa Clara data centers in a taxable transaction prior to January 1, 2026, referred to as the protected period; (2) causing or permitting any transaction that results in the disposition by Mr. Williams or his affiliates and family members who own OP units of all or any portion of their interests in the operating partnership in a taxable transaction during the protected period; or (3) our failure prior to the expiration of the protected period to maintain approximately $150 million of indebtedness that would be allocable to Mr. Williams and his affiliates for tax purposes or, alternatively, failing to offer Mr. Williams and his affiliates and family members who own OP units the opportunity to guarantee specific types of the operating partnership’s indebtedness in order to enable them to continue to defer certain tax liabilities. The aggregate built-in gain on the subject properties upon completion of this offering that would be allocable to Mr. Williams and his affiliates is estimated to be approximately $ 205 million.

181

Partnership Agreement

Concurrently with the completion of this offering, we will enter into an amended and restated operating partnership agreement with the continuing investors that own limited partnership units in our operating partnership. See “Description of the Partnership Agreement of QualityTech, LP.” Upon completion of this offering, limited partners in our operating partnership (other than us) will own approximately % of our operating partnership. Pursuant to the operating partnership agreement, holders of OP units will have the right beginning on the date that is the later of (1) 12 months from the beginning of the first full calendar month following the completion of this offering and (2) the date of issuance of the OP units to require our operating partnership to redeem all or part of their OP units for cash equal to the then-current market value of an equal number of shares of our Class A common stock (determined in accordance with and subject to adjustment under the partnership agreement), or, at our election, to exchange their OP units for shares of our Class A common stock on a one-for-one basis subject to certain adjustments and the restrictions on ownership and transfer of our stock set forth in our charter and described under the section entitled “Description of Securities—Restrictions on Ownership and Transfer.” Additionally, pursuant to the operating partnership agreement, holders of vested Class O LTIP units and vested Class RS LTIP units may convert their units into a certain number of OP units in accordance with their terms. See “Description of the Partnership Agreement of QualityTech, LP.” Our continuing investors who hold OP units will receive registration rights with respect to the shares of our Class A common stock that may be issued to them upon the exchange of their OP units. See “Registration Rights” below and “Shares Eligible for Future Sale—Registration Rights.”

Registration Rights

New Registration Rights Agreement

Upon completion of this offering, we will enter into a registration rights agreement with our continuing investors, including certain of our directors and executive officers. Under the registration rights agreement, subject to certain limitations, during the period beginning 15 days prior to the date those individuals are first permitted to redeem their OP units pursuant to the amended partnership agreement and ending 15 days thereafter, we will file one or more registration statements covering the issuance to them of shares of our Class A common upon redemption of their OP units (collectively, the “registrable shares”). We have agreed to use our reasonable best efforts to cause each shelf registration statement to be declared effective as soon as practicable after it is filed.

We have also agreed to indemnify the persons receiving rights against specified liabilities, including certain potential liabilities arising under the Securities Act or the Exchange Act, or to contribute to the expenses incurred or the payments such persons may be required to make in respect thereof. We have agreed to pay all of the expenses relating to the registration and any underwritten offerings of such securities, including, without limitation, all registration, listing, filing and stock exchange or FINRA fees, all fees and expenses of complying with securities or “blue sky” laws, all printing expenses, all fees of counsel and independent public accountants retained by us and the cost of any liability insurance or other premiums for insurance obtained in connection with any shelf registration statement pursuant to the registration rights agreement. The holder will be responsible for underwriting discounts and commissions, any out-of-pocket expenses (including disbursements of such holder’s counsel, accountants and other advisors) and any transfer taxes related to the sale or disposition of the shares.

Existing Registration Rights Agreements.

General Atlantic and Chad L. Williams, our Chairman and Chief Executive Officer, each is a party to a separate registration rights agreement. Under those registration rights agreements, beginning 180 days after the completion of an IPO, General Atlantic and Mr. Williams have demand rights to require us to file a new registration statement and prospectus providing for the sale by such holders of some or

182

all of their shares, provided that (i) unless the holder is registering all of its shares, the shares to be registered in any registration must have an aggregate offering price of at least $5 million, (ii) the holders may make only four such demands, and (iii) we are not required to affect more than two such demands in any 12 month period. The holders may require us to use our reasonable best efforts to cause any such demand registration to be in the form of an underwritten offering. We may satisfy this obligation by causing the requested shares to be included as part of an existing shelf registration statement that we then have on file with (and that has been declared effective by) the SEC.

In addition to the foregoing, if we file a registration statement with respect to an offering for our own account or on behalf of a holder of our common stock, each of General Atlantic and Mr. Williams will have the right, subject to certain limitations, to register such number of registrable shares held by it or him as each such holder requests. With respect to underwritten offerings, we will not be required to include any shares of a holder in the offering unless the holder accepts the terms of the offering as agreed between us and the underwriter, and then only in such amount as the underwriter believes will not jeopardize the success of the offering.

The existing registration rights agreement with Mr. Williams also provides that, subject to certain limitations, we will use commercially reasonable efforts to file, during the period beginning 15 days prior to the date Mr. Williams is first permitted to redeem his OP units pursuant to the operating partnership’s partnership agreement and ending 15 days thereafter, a registration statement registering the issuance to Mr. Williams of the Class A common stock issued to Mr. Williams upon redemption of his OP units. We have agreed to use commercially reasonable efforts to keep the registration statement continuously effective until Mr. Williams no longer owns any OP units.

Upon completion of this offering, we will enter into amended and restated registration rights agreements with each of General Atlantic and Mr. Williams that amend and restate the existing registration rights agreements to correctly reflect our structure following the formation transactions.

Office and Data Center Lease

Our operating partnership leases approximately 30,000 square feet of office space and common area to house our corporate headquarters and approximately 2,500 square feet of raised floor operating NRSF data center space at the J. Williams Technology Center, which is a 38,000 square foot Class A office and technology building located at 12851 Foster Street in Overland Park, Kansas. The J. Williams Technology Centre is owned by an entity controlled by Chad L. Williams, our Chairman and Chief Executive Officer. The lease was entered into in January 2009, expires in January 2019 and has one five-year automatic renewal term. We pay monthly rent of approximately $86,000 under the lease, plus our pro rata share of certain repair and maintenance expenses relating to the leased premises. We believe that the terms of this lease are fair and reasonable and reflect the terms we could expect to obtain in an arm’s length transaction for comparable space elsewhere in Overland Park, Kansas.

Business with Williams Family Companies

Mr. Williams and his affiliates will continue to own various interests in and operate certain non-real estate businesses, including Quality Office, an office equipment sales company, Quality Auto, an auto sales and brokerage company, Quality Lease & Finance, an equipment leasing company, and Quality Auto Brokers, an auto sales and brokerage company.

From time to time, we have made purchases of office equipment from Quality Office through individual purchase orders in the ordinary course of business. For each such order, we paid a design fee to Quality Office equal to 15% of the cost of such order, and paid the cost of such order directly to

183

the vendor (although until August 2012 our predecessor paid the entire purchase price to Quality Office and Quality Office paid the vendor). We believe that these purchase terms are fair and reasonable and reflect the terms we could expect to obtain in an arm’s length transaction with another vendor. In 2012, the total amount paid by our predecessor to Quality Office was $843,000. In August 2013, we entered into an agreement with Quality Office pursuant to which we will continue to pay a 15% design fee and directly pay the costs of each order to the vendor. Quality Office is 100% owned by Mr. Williams.

We also may, from time to time, make purchases from or enter into leasing contracts with Quality Lease & Finance. In addition, our predecessor has purchased vehicles from Quality Auto and Quality Auto Brokers in the past; however, we do not expect to make any future purchases from these companies. In 2012, the total amounts paid to these companies in the aggregate was less than $120,000. Quality Lease and Finance and Quality Auto are 100% owned by Mr. Williams, and Quality Auto Brokers is 100% owned by James L. Williams, the father of Mr. Williams.

Because we are not a party to any on-going contracts with these companies, and because we may enter into any of these transactions from time to time, the amount and terms of any future transactions between these companies and us are not currently determinable. Any such future transactions would require the approval of our disinterested directors.

Employment Agreements

We have entered into employment agreements with each of Messrs. Williams, Schafer, Reinhart, Bennewitz and Berson and Ms. Goza. For a description of the terms of these employment agreements, see “Management—Employment Agreements.”

Charter Aircraft Flex Arrangements

Quality Development Services, LLC, which is 100% owned by Mr. Williams, is a party to a Walk Away Lease Agreement with Bombardier Aerospace Corporation for a private aircraft service. From time to time, certain of our officers, directors and designated employees use the aircraft provided through this lease for business purposes. We reimburse Quality Development Services, LLC for its costs for the time the aircraft is used by our officers, directors and designated employees. In 2012, this amount totaled approximately $159,000. In August 2013, we entered into an agreement with Quality Development Services, LLC pursuant to which we will continue to reimburse Quality Development Services, LLC for the use of the aircraft by our officers, directors and designated employees.

Intellectual Property

We will enter into a license agreement with QGC, which is owned by Chad L. Williams, pursuant to which QGC will grant us a license to use the trademarked stylized “Q” used in QGC’s logo at no cost. The license agreement will terminate when Mr. Williams ceases to act as our Chief Executive Officer.

Indemnification Agreements

Effective upon completion of this offering, our charter and bylaws will provide for certain indemnification rights for our directors and officers, and we will enter into an indemnification agreement

184

with each of our executive officers and directors providing for procedures for indemnification and advancements by us of certain expenses and costs relating to claims, suits or proceedings arising from his or her service to us or, at our request, service to other entities, as officers or directors to the maximum extent permitted by Maryland law. See “Management—Indemnification Agreements.”

Review, Approval or Ratification of Transactions with Related Persons

Upon completion of this offering, we will adopt a code of business conduct and ethics that will prohibit directors and executive officers from engaging in transactions that may result in a conflict of interest with us. The code of business conduct and ethics will include a policy requiring that our board of directors review any transaction a director or executive officer proposes to have with us that could give rise to a conflict of interest or the appearance of a conflict of interest, including any transaction that would require disclosure under Item 404(a) of Regulation S-K. In conducting this review, the board of directors will be obligated to ensure that all such transactions are approved by a majority of the board of directors (including a majority of independent directors) not otherwise interested in the transaction and are fair and reasonable to us and on terms not less favorable to us than those available from unaffiliated third parties.

185

INVESTMENT POLICIES AND POLICIES WITH RESPECT TO CERTAIN ACTIVITIES

The following is a discussion of certain of our investment, financing and other policies. These policies have been determined by our board of directors and, in general, may be amended or revised from time to time by our board of directors without a vote of our stockholders. However, any change to any of these policies would be made by our board of directors only after a review and analysis of that change, in light of then-existing business and other circumstances, and then only if our directors believe, in the exercise of their business judgment, that it is advisable to do so and in our and our stockholders’ best interests. We intend to disclose any changes in these policies in periodic reports that we file or furnish under the Exchange Act.

Investment Policies

Investments in Real Estate or Interests in Real Estate

We will conduct all of our investment activities through our operating partnership and its subsidiaries. Our policy is to acquire assets primarily for current income generation. Our investment objectives are to maximize the cash flow of our properties, acquire properties with cash flow growth potential, provide quarterly cash distributions and achieve long-term capital appreciation for our stockholders through increases in the value of our company. We have not established a specific policy regarding the relative priority of these investment objectives. For a discussion of our properties and our acquisition and other strategic objectives, see “Business and Properties.”

We expect to pursue our investment objectives primarily through the ownership by our operating partnership of our existing properties and other acquired properties and assets. We currently intend to invest primarily in technology-related real estate. We currently intend to focus on data center properties in those areas in which we operate and to strategically select new markets when opportunities are available that meet our investment criteria or areas that have development potential. However, future investment or development activities will not be limited to any geographic area, property type or to a specified percentage of our assets. While we may diversify in terms of property locations, size and market, we do not have any limit on the amount or percentage of our assets that may be invested in any one property or any one geographic area. We intend to engage in such future investment activities in a manner that is consistent with our qualification as a REIT for federal income tax purposes. In addition, we may purchase or lease income-producing technology-related and other types of properties for long-term investment, expand and improve the properties we presently own or other acquired properties, or sell such properties, in whole or in part, when circumstances warrant.

We may also participate with third parties in property ownership, through joint ventures or other types of co-ownership. These types of investments may permit us to own interests in larger assets without unduly restricting our diversification and, therefore, provide us with flexibility in structuring our portfolio. We will not, however, enter into a joint venture or other partnership arrangement to make an investment that would not otherwise meet our investment policies.

We do not have a specific policy to acquire assets primarily for capital gain or primarily for income. From time to time, we may make investments in pursuit of our business and growth strategies that do not provide current cash flow. We believe investments that do not generate current cash flow may be, in certain instances, consistent with enhancing stockholder value over time.

Equity investments in acquired properties may be subject to existing mortgage financing and other indebtedness or to new indebtedness, which may be incurred in connection with acquiring or refinancing these properties. Debt service on such financing or indebtedness will have a priority over any dividends with respect to our common stock. Investments are also subject to our policy not to be treated as an “investment company” under the Investment Company Act of 1940, as amended, or the 1940 Act.

186

Investments in Real Estate Mortgages

We have not, prior to this offering, engaged in any investments in mortgage loans and do not presently intend to invest in mortgage loans. However, we may do so at the discretion of our board of directors, without a vote of our stockholders, subject to the investment restrictions applicable to REITs. The mortgage loans in which we may invest may be secured by either first mortgages or junior mortgages, and may or may not be insured by a governmental agency. If we choose to invest in mortgages, we would expect to invest in mortgages secured by data center facilities. However, there is no restriction on the proportion of our assets which may be invested in a type of mortgage or any single mortgage or type of mortgage loan. Investments in real estate mortgages run the risk that one or more borrowers may default under certain mortgages and that the collateral therefore may not be sufficient to enable us to recoup our full investment.

Securities of or Interests in Persons Primarily Engaged in Real Estate Activities and Other Issuers

Subject to the percentage of ownership limitations and gross income tests necessary for REIT qualification, although we have not done so in the past, we may in the future invest in securities of other REITs, other entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over such entities. We do not intend that our investments in securities will require us to register as an investment company under the 1940 Act, and we would intend to divest such securities before any such registration would be required.

Investment in Other Securities

Other than as described above, we do not intend to invest in any additional securities such as bonds, preferred stocks or common stock.

Dispositions

We do not currently intend to dispose of any of our properties, although we reserve the right to do so if, based upon management’s periodic review of our portfolio, our board of directors determines that such action would be in the best interest of our stockholders. Certain directors and executive officers who hold OP units may have their decision as to the desirability of a proposed disposition influenced by the tax consequences to them resulting from the disposition of a certain property. See “Risk Factors—Risks Related to Our Organization and Structure—Each of our properties is subject to real and personal property taxes, which could significantly increase our property taxes as a result of tax rate changes and reassessments and have a material adverse effect on us.”

Financing Policies

We expect to employ leverage in our capital structure in amounts determined from time to time by our board of directors. Our charter and bylaws do not limit the amount or percentage of indebtedness that we may incur. Although our board of directors has not adopted a policy which limits the total amount of indebtedness that we may incur, it will consider a number of factors in evaluating our level of indebtedness from time to time, such as our debt to total market capitalization ratio, as well as the amount of such indebtedness that will either be fixed or variable rate. Our total market capitalization is defined as the sum of the market value of our outstanding common stock (which may decrease, thereby increasing our debt to total capitalization ratio), including restricted shares that we may issue to certain of our directors and executive officers, plus the aggregate value of OP units not owned by us, plus the book value of our total consolidated indebtedness. Since this ratio is based, in part, upon market values of equity, it will fluctuate with changes in the price of our common stock. However, we

187

believe that this ratio provides an appropriate indication of leverage for a company whose assets are primarily real estate. We expect that our ratio of debt-to-total market capitalization upon completion of this offering will be approximately % (approximately % if the underwriters’ option to purchase additional shares is exercised in full). Our board of directors may from time to time modify our debt policy in light of then-current economic conditions, relative costs of debt and equity capital, market values of our properties, general conditions in the market for debt and equity securities, fluctuations in the market price of our common stock, growth and acquisition opportunities and other factors. Accordingly, we may increase or decrease our ratio of debt-to-total market capitalization beyond the limits described above. If these policies were changed, we could become more highly leveraged, resulting in an increased risk of default on our obligations and a related increase in debt service requirements that could adversely affect our financial condition and results of operations and our ability to make distributions to our stockholders. We intend to adopt a policy relating to the use of derivative financial instruments to hedge interest rate risks related to our borrowings. This policy will govern our use of derivatives to manage the interest rates on our variable rate borrowings. We expect our policy to state that we will not use derivatives for speculative or trading purposes and will only enter into contracts with major financial institutions based on their credit rating and other factors. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Lending Policies

We do not have a policy limiting our ability to make loans to other persons. We may consider offering purchase money financing in connection with the sale of properties where the provision of that financing will increase the value to be received by us for the property sold. We also may make loans to, or guarantee debt of, joint ventures in which we participate. Consideration for those guarantees may include, but is not limited to, fees, options to acquire additional ownership interests and promoted equity positions. However, we do not intend to engage in significant lending activities. Any loan we make will be consistent with maintaining our status as a REIT.

Equity Capital Policies

To the extent that our board of directors determines to obtain additional capital, we may issue debt or equity securities, including additional OP units and senior securities, retain earnings (subject to provisions in the Code requiring distributions of income to maintain REIT qualification) or pursue a combination of these methods. As long as our operating partnership is in existence, the proceeds of all equity capital raised by us will be contributed to our operating partnership in exchange for additional interests in our operating partnership, which will dilute the ownership interests of the limited partners in our operating partnership.

Existing stockholders will have no preemptive right to shares of common stock or preferred stock or OP units issued in any securities offering by us, and any such offering might cause a dilution of a stockholder’s investment in us. Although we have no current plans to do so, we may in the future issue common stock or OP units in connection with acquisitions of property.

We may, under certain circumstances, purchase our common stock or other securities in the open market or in private transactions with our stockholders, provided that those purchases are approved by our board of directors. Our board of directors has no present intention of causing us to repurchase any common stock or other securities, and any such action would only be taken in conformity with applicable federal and state laws and the applicable requirements for qualification as a REIT.

188

Conflict of Interest Policies

Overview. Conflicts of interest could arise in the future as a result of the relationships between us and our affiliates, on the one hand, and our operating partnership or any partner thereof, on the other. Our directors and officers have duties to our company and our stockholders under applicable Maryland law in connection with their management of our company. At the same time, we have fiduciary duties, as a general partner, to our operating partnership and to the limited partners under Delaware law in connection with the management of our operating partnership. Our duties, as a general partner to our operating partnership and its partners, may come into conflict with the duties of our directors and officers to our company and our stockholders.

Unless otherwise provided for in the relevant partnership agreement, Delaware law generally requires a general partner of a Delaware limited partnership to adhere to fiduciary duty standards under which it owes its limited partners the highest duties of good faith, fairness and loyalty and which generally prohibit such general partner from taking any action or engaging in any transaction as to which it has a conflict of interest.

Additionally, the partnership agreement expressly limits our liability by providing that neither we, as the general partner of the operating partnership, nor any of our directors or officers, will be liable or accountable in damages to our operating partnership, the limited partners or assignees for errors in judgment, mistakes of fact or law or for any act or omission if we, or such director or officer, acted in good faith. In addition, our operating partnership is required to indemnify us, our affiliates and each of our respective directors, officers, employees and agents to the fullest extent permitted by applicable law against any and all losses, claims, damages, liabilities (whether joint or several), expenses (including, without limitation, attorneys’ fees and other legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the operating partnership, provided that our operating partnership will not indemnify for (1) an act or omission that was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty, (2) any transaction for which such person received an improper personal benefit in money, property or services, or (3) in the case of a criminal proceeding, the person had reasonable cause to believe the act or omission was unlawful.

The provisions of Delaware law that allow the common law fiduciary duties of a general partner to be modified by a partnership agreement have not been resolved in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties that would be in effect under common law were it not for the partnership agreement.

Sale or Refinancing of Properties. Upon the sale of certain of the properties to be owned by us at the completion of the formation transactions and on the repayment of indebtedness, certain holders of our OP units could incur adverse tax consequences which are different from the tax consequences to us and to holders of our common stock. Consequently, holders of our OP units may have differing objectives regarding the appropriate pricing and timing of any such sale or repayment of indebtedness. In addition, we have entered into a tax protection agreement with Chad L. Williams and his affiliates and family members, which may require us to retain certain properties or maintain more or less indebtedness than we would otherwise require for our business. See “Certain Relationships and Related Transactions—Tax Protection Agreement.”

Policies Applicable to All Directors and Officers. We intend to adopt certain policies that are designed to eliminate or minimize certain potential conflicts of interest, including a policy for the review, approval or ratification of any related party transactions. We will adopt a code of business conduct and

189

ethics that restricts conflicts of interest between our employees, officers and directors and our company. In addition, as set forth above, our board of directors is subject to certain provisions of Maryland law, which are also designed to eliminate or minimize conflicts.

However, we cannot assure you that these policies or provisions of law will always be successful in eliminating the influence of such conflicts, and if they are not successful, decisions could be made that might fail to reflect fully the interests of all stockholders.

Interested Director and Officer Transactions

Pursuant to Maryland law, a contract or other transaction between us and a director or between us and any other corporation or other entity in which any of our directors is a director or has a material financial interest is not void or voidable solely on the grounds of such common directorship or interest, the presence of such director at the meeting at which the contract or transaction is authorized, approved or ratified or the counting of the director’s vote in favor thereof, provided that:

the fact of the common directorship or interest is disclosed or known to our board of directors or a committee of our board, and our board or committee authorizes, approves or ratifies the transaction or contract by the affirmative vote of a majority of disinterested directors, even if the disinterested directors constitute less than a quorum;

the fact of the common directorship or interest is disclosed or known to our stockholders entitled to vote thereon, and the transaction or contract is authorized, approved or ratified by a majority of the votes cast by the stockholders entitled to vote other than the votes of shares owned of record or beneficially by the interested director or corporation, firm or other entity; or

the transaction or contract is fair and reasonable to us at the time it is authorized, ratified or approved.

Furthermore, under Delaware law (where our operating partnership is formed), we, acting as general partner, have a fiduciary duty to our operating partnership and, consequently, such transactions are also subject to the duties of care and loyalty that we, as a general partner, owe to limited partners in our operating partnership (to the extent such duties have not been eliminated pursuant to the terms of the partnership agreement). We will adopt a policy which requires that all contracts and transactions between us, our operating partnership or any of our subsidiaries, on the one hand, and any of our directors or executive officers or any entity in which such director or executive officer is a director or has a material financial interest, on the other hand, must be approved by the affirmative vote of a majority of the disinterested directors. Where appropriate, in the judgment of the disinterested directors, our board of directors may obtain a fairness opinion or engage independent counsel to represent the interests of non-affiliated security holders, although our board of directors will have no obligation to do so.

In addition to the applicable provisions of Maryland law that we will be subject to, we will adopt a code of business conduct and ethics that will contain a policy generally restricting conflicts of interest between our directors, officers and employees on the one hand, and us on the other hand. Any waiver of our conflicts of interest policy for executive officers and directors must be made by our board of directors or a committee thereof. We will disclose waivers of our conflicts of interest policy in accordance with law or regulations of the SEC and the NYSE.

Policies With Respect To Other Activities

We will have authority to offer common stock, preferred stock or options to purchase shares in exchange for property and to repurchase or otherwise acquire our common stock or other securities in

190

the open market or otherwise, and we may engage in such activities in the future. As described in “Description of the Partnership Agreement of QualityTech, LP,” we may, but are not obligated, to issue common stock to holders of OP units upon exercise of their redemption rights. Our board of directors has the power, without stockholder approval, to increase the number of authorized common stock or preferred stock and issue additional common stock or preferred stock, in one or more series, including senior securities, in any manner, and on the terms and for the consideration, it deems appropriate. See “Description of Securities.” We have not engaged in trading, underwriting or agency distribution or sale of securities of other issuers other than our operating partnership and do not intend to do so. At all times, we intend to make investments in such a manner as to qualify as a REIT, unless because of circumstances or changes in the Code, or the Treasury regulations, our board of directors determines that it is no longer in our best interest to qualify as a REIT.

Reporting Policies

We intend to make available to our stockholders our annual reports, including our audited financial statements. Upon completion of this offering, we will become subject to the information reporting requirements of the Exchange Act. Pursuant to those requirements, we will be required to file annual and periodic reports, proxy statements and other information, including audited financial statements, with the SEC.

191

STRUCTURE AND FORMATION OF OUR COMPANY

Our Operating Entities

Our Operating Partnership

Following the completion of this offering, we will become the sole general partner and the owner of a majority of the interests in our predecessor, which then will be our operating partnership. Substantially all of our assets will be held by, and our operations will be conducted through, our operating partnership. We will contribute the net proceeds received by us from this offering to our operating partnership in exchange for OP units therein. Our interest in our operating partnership will generally entitle us to share in cash distributions from, and in the profits and losses of, our operating partnership in proportion to our percentage ownership. As the sole general partner of our operating partnership, we will generally have the exclusive power under the partnership agreement to manage and conduct its business and affairs, subject to certain limited approval rights of the limited partners, which are described more fully below in “Description of the Partnership Agreement of QualityTech, LP.” Our board of directors will manage our business and affairs.

Beginning on or after the date that is the later of (1) 12 months from the beginning of the first full calendar month following the completion of this offering and (2) the date of issuance of the OP units, each holder of OP units will have the right to require our operating partnership to redeem part or all of its OP units for cash, based upon the value of an equivalent number of shares of our common stock at the time of the redemption, or, at our election, shares of our common stock on a one-for-one basis, subject to certain adjustments and the restrictions on ownership and transfer of our stock set forth in our charter and described under the section entitled “Description of Securities—Restrictions on Ownership and Transfer.” Each redemption of OP units will increase our percentage ownership interest in our operating partnership and our share of its cash distributions and profits and losses. See “Description of the Partnership Agreement of QualityTech, LP.”

Our Taxable REIT Subsidiary

We currently provide our Cloud and Managed Services product to our customers through Quality Technology Services Holding, LLC, a Delaware limited liability company, which is wholly owned by our operating partnership. Quality Technology Services Holding, LLC has elected to be treated as a taxable REIT subsidiary, or TRS, for federal income tax purposes. A taxable REIT subsidiary generally may provide non-customary and other services to our customers and engage in activities that we may not engage in directly without adversely affecting our qualification as a REIT. See “U.S. Federal Income Tax Considerations—Taxation of REITs in General—Effect of Subsidiary Entities—Taxable REIT Subsidiaries.” We may form additional taxable REIT subsidiaries in the future, and our operating partnership may contribute some or all of its interests in certain wholly owned subsidiaries or their assets to our taxable REIT subsidiaries. Any income earned by our taxable REIT subsidiaries will be included in our income in our consolidated financial statements, but will not be included in our taxable income for purposes of the 75% or 95% gross income tests, except to the extent such income is distributed to us as a dividend, in which case such dividend income will qualify under the 95%, but not the 75%, gross income test. See “U.S. Federal Income Tax Considerations—Taxation of REITs in General—Income Tests.” Because a taxable REIT subsidiary is subject to federal income tax, and state and local income tax (where applicable) as a corporation, the income earned by our taxable REIT subsidiaries generally will be subject to an additional level of tax as compared to the income earned by our other subsidiaries.

192

Formation Transactions

Structure of our Operating Partnership

Our operating partnership was formed in August 2009 in connection with a series of transactions intended to consolidate the ownership of our properties and data center business under one entity. Pursuant to those transactions, Mr. Williams and other owners and entities controlled by them contributed to our operating partnership the various limited liability companies owning or providing services to or on behalf of each of our data center properties in exchange for common partnership units. At the same time, Mr. Williams caused our TRS to engage in various transactions to enable it serve as the vehicle through which our operating partnership provides our Cloud and Managed Services product to our customers. Immediately following these consolidation transactions, GA REIT made an investment in our operating partnership in exchange for preferred partnership units. GA REIT owns no assets other than its interest in our operating partnership.

Following 2009, GA REIT, and certain of our directors and executive officers made additional investments in our operating partnership in exchange for partnership units. Also following 2009, our operating partnership adopted the 2010 Plan under which it granted LTIP units, consisting of Class O LTIP units and Class RS units, from time to time to certain of our directors, executive officers and other employees. See “Description of the Partnership Agreement of QualityTech, LP.”

Immediately prior to the formation transactions described below and the completion of this offering, therefore, our operating partnership is owned by GA REIT, Mr. Williams, certain of our directors and other executive officers and our other employees who hold LTIP units. We refer to the owners of our operating partnership as our “continuing investors.”

Formation Transactions

Prior to or concurrently with the completion of this offering, we will engage in a series of transactions pursuant to which we will become the sole general partner and majority owner of QualityTech, LP, which then will become our operating partnership. We refer to these transactions, which are described below, as our “formation transactions.”

We were formed as a Maryland corporation on May 17, 2013.

We will consummate a tax-free merger transaction in which GA REIT will merge with and into us and we will succeed to GA REIT’s majority limited partnership interest in QualityTech, LP, which then will become our operating partnership. Pursuant to the merger, we will issue shares of our Class A common stock to General Atlantic, and $105,000 in cash (plus accumulated dividends, if any) will be paid to the current preferred shareholders of GA REIT, in each case as consideration for their shares of GA REIT.

We will issue shares of our Class B common stock to Mr. Williams in exchange for an equivalent number of OP units. The OP units exchanged will represent 2% of Mr. Williams’ outstanding OP units. Mr. Williams has elected to exchange one OP unit out of every 50 OP units owned by him, his family or entities controlled by them immediately prior to the commencement of this offering. Each outstanding share of Class B common stock entitles its holder to 50 votes on all matters on which Class A common stockholders are entitled to vote,

193

including the election of directors, and holders of shares of Class A common stock and Class B common stock will vote together as a single class. Our Class B common stock is designed to give the holder thereof a right to vote that is proportional to such holder’s economic interest in our company on a fully diluted basis, and does not provide any disproportionate voting rights. The Class B common stock automatically converts into Class A common stock in certain circumstances and is convertible at any time into Class A common stock at the option of the holder.

In order to simplify our operating partnership’s outstanding limited partnership units, we will eliminate our outstanding Class O LTIP units (which is a class of incentive units that previously were granted to certain employees and non-employee directors of our operating partnership) in a manner that preserves the economic position of each holder of Class O LTIP units and provides additional incentives by:

All continuing investors receiving shares of our common stock in exchange for OP units in the formation transactions are “accredited investors” as defined under Regulation D of the Securities Act. The issuance of such shares will be effected in reliance upon exemptions from registration provided by Section 4(a)(2) of the Securities Act and Regulation D of the Securities Act.

Consequences of this Offering and the Formation Transactions

The completion of this offering and our formation transactions will have the following consequences. All amounts are based on the mid-point of the price range set forth on the cover of this prospectus.

We will be the sole general partner and majority limited partner in our operating partnership, which indirectly owns, leases and operates all of our data center facilities and, through our TRS, provides our Cloud and Managed Services product. We are a holding company and will conduct all of our operations through our operating partnership. We will not have, apart from our ownership of our operating partnership, any independent operations upon the completion of this offering.

Purchasers of shares of our common stock in this offering will own approximately % of our outstanding common stock, or approximately % on a fully diluted basis ( % of our outstanding common stock, or % on a fully diluted basis, if the underwriters’ option to purchase additional shares is exercised in full).

General Atlantic will own approximately % of our outstanding common stock, or approximately % on a fully diluted basis ( % of our outstanding common stock, or % on a fully diluted basis, if the underwriters’ option to purchase additional shares is exercised in full).

194

Mr. Williams and his affiliates will own % of our company on a fully diluted basis ( % if the underwriters’ option to purchase additional shares is exercised in full) through his ownership of OP units and Class B Common Stock, and will possess % of the voting power of our common stock upon the completion of this offering ( % of the voting power, if the underwriter’s option to purchase additional shares is exercised in full) by virtue of his ownership of Class B Common Stock.

Our directors, executive officers and employees (other than Mr. Williams) and their affiliates will own approximately % of our outstanding common stock, or approximately % of our company on a fully diluted basis ( % of our outstanding common stock, or % on a fully diluted basis, if the underwriters’ option to purchase additional shares is exercised in full).

We will contribute the proceeds from shares sold by us in this offering to our operating partnership in exchange for a number of OP units equal to the number of shares of common stock that are issued in this offering.

We will own approximately % of limited partnership interests in our operating partnership ( % of the interests, if the underwriters’ option to purchase additional shares is exercised in full).

195

Our Structure

The following diagram depicts our ownership structure upon completion of this offering, based on the mid-point of the price range set forth on the cover of this prospectus.

LOGO

Benefits to Related Parties

Upon completion of this offering and the formation transactions, certain of our continuing investors, directors, members of our senior management team and employees will receive material benefits, including the following:

We will issue shares of our Class B common stock to Chad L. Williams, our Chairman and Chief Executive Officer, in exchange for an equivalent number of OP units. The OP units

196

exchanged will represent 2% of Mr. Williams’ OP units. Each outstanding share of Class B common stock entitles its holder to 50 votes on all matters on which Class A common stockholders are entitled to vote, including the election of directors, and holders of shares of Class A common stock and Class B common stock will vote together as a single class. Our Class B common stock is designed to give the holder thereof a right to vote that is proportional to such holders’ economic interest in our company on a fully diluted basis and therefore does not provide any disproportionate voting rights. The Class B common stock automatically converts into Class A common stock in certain circumstances and is convertible at any time into Class A common stock at the option of the holder.

We will enter into indemnification agreements with our directors and executive officers at the closing of this offering, providing for the indemnification by us for certain liabilities and expenses incurred as a result of actions brought, or threatened to be brought, against such parties.

We will grant an aggregate of (i) restricted shares of our common stock (based on the mid-point of the price range set forth on the cover of this prospectus), subject to certain vesting requirements, to our executive officers, (ii) options to acquire shares of Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) to our executive officers, (iii) restricted shares of our common stock (based on the mid-point of the price range set forth on the cover of this prospectus), subject to certain vesting requirements, to certain of our independent directors and (iv) options to purchase shares of our Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) to certain of our independent directors. See “Management—Executive Compensation—2013 Equity Incentive Plan.”

In order to preserve the economic position of the holders of our Class O LTIP units and provide additional incentives, we will convert the outstanding Class O LTIP units into OP units equal in value to the “in the money” portion of such Class O LTIP units, and we will grant to each former holder of Class O LTIP units options to purchase a number of shares of our Class A common stock equal to the number of such holder’s converted Class O LTIP units, which will result in an aggregate grant of options to acquire shares of Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) upon the closing of this offering with an exercise price equal to the public offering price of our Class A common stock in this offering. See “Structure and Formation of Our Company—Formation Transactions.”

197

Determination of Offering Price

Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined in consultation with the representatives of the underwriters. In determining the initial public offering price of our common stock, the representatives of the underwriters will consider, among other things, the history and prospects for the industry in which we compete, our results of operations, the ability of our management, our business potential and earnings prospects, our estimated net income, our estimated funds from operations, our estimated cash available for distribution, our anticipated dividend yield, our growth prospects, the prevailing securities markets at the time of this offering, the recent market prices of, and the demand for, publicly traded shares of companies considered by us and the underwriters to be comparable to us and the current state of the commercial real estate industry and the economy as a whole. The initial public offering price will not necessarily bear any relationship to the book value of our properties and assets, our financial condition or any other established criteria of value and may not be indicative of the market price for our common stock after this offering.

198

DESCRIPTION OF THE PARTNERSHIP AGREEMENT OF QUALITYTECH, LP

The following is a summary of the material terms and provisions of the Fifth Amended and Restated Agreement of Limited Partnership of QualityTech, LP, which we refer to as the “partnership agreement.” For purposes of this section, references to “we,” “our,” “us” and “our company” refer to QTS Realty Trust, Inc.

General

Our operating partnership, QualityTech, LP, is a Delaware limited partnership that was formed on August 5, 2009. Upon completion of this offering, we will be the sole general partner of our operating partnership, and we expect to own approximately % of the interests in our operating partnership ( % if the underwriters exercise their option to purchase additional shares in full). We will own substantially all of our assets and conduct substantially all of our operations through our operating partnership. We will contribute the net proceeds received by us from this offering to our operating partnership in exchange for common units therein. Our interest in our operating partnership will generally entitle us to share in cash distributions from, and in the profits and losses of, our operating partnership in proportion to our percentage ownership.

In connection with the formation transactions, we will enter into the amended partnership agreement with the continuing investors who own OP units. The provisions of the amended partnership agreement described below and elsewhere in the prospectus will be in effect after the completion of the formation transactions and this offering. We do not intend to list the common units on any exchange or any national market system.

Management of Our Operating Partnership

Except as otherwise expressly provided in the amended partnership agreement, we, as general partner, have the exclusive right and full authority and responsibility to manage and operate the partnership’s business. In particular, we are under no obligation to consider the tax consequences to limited partners when making decisions for the benefit of our operating partnership but we are expressly permitted to take into account our tax consequences. Limited partners generally do not have any right to participate in or exercise control or management power over the business and affairs of our operating partnership or the power to sign documents for or otherwise bind our operating partnership. The limited partners have no power to remove us as general partner.

Management Liability and Indemnification

We, as general partner of our operating partnership, and our directors and officers are not liable for monetary or other damages to our operating partnership, any partners or assignees for losses sustained, liabilities incurred or benefits not derived as a result of errors in judgment or mistakes of fact or law or of any act or omission, unless we acted in bad faith and the act or omission was material to the matter giving rise to the loss, liability or benefit not derived. To the fullest extent permitted by applicable law, the amended partnership agreement indemnifies us, as general partner, any limited partners, any of our officers, directors, trustees, managers, members, stockholders or partners and other persons as we may designate from and against any and all losses, claims, damages, liabilities, joint or several, expenses, judgments, fines, settlements and other amounts incurred in connection with any claims, demands, actions, suits or proceedings relating to us, the operating partnership or the operations of or ownership of property by our operating partnership, unless it is established by a final determination of a court of competent jurisdiction that:

the act or omission of the indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty;

199

the indemnitee actually received an improper personal benefit in money, property or services; or

in the case of any criminal proceeding, the indemnitee had reasonable cause to believe that the act or omission was unlawful.

In addition, the amended partnership agreement will provide that, with respect to our directors, our operating partnership is the indemnitor of first resort to the extent that any directors simultaneously are entitled to indemnification from General Atlantic with respect to any of the same losses, claims, damages, liabilities, joint or several, expenses, judgments, fines, settlements and other amounts for which our operating partnership is obligated to provide indemnification.

Fiduciary Responsibilities

Our directors and officers have duties under applicable Maryland law to manage us in a manner consistent with the best interests of our stockholders. At the same time, we, as general partner, have fiduciary duties under applicable Delaware law to manage our operating partnership in a manner beneficial to our operating partnership and its partners. Our duties, as general partner, to our operating partnership and its limited partners, therefore, may come into conflict with the duties of our directors and officers to our stockholders.

Pursuant to the amended partnership agreement, we act on behalf of the operating partnership, its equityholders (and, to the extent separate, our equityholders) and generally are under no obligation to consider the separate interests of the limited partners in our operating partnership (including, without limitation, the tax consequences to such limited partners or their assignees) in deciding whether to cause our operating partnership to take (or decline to take) any actions. Provided that we act in good faith and pursuant to our authority under the amended partnership agreement, and any decisions or actions taken or not taken in accordance with the terms of the amended partnership agreement will not constitute a breach of any duty owed to our operating partnership or its limited partners by law or equity, fiduciary or otherwise. In addition, as a general matter, the amended partnership agreement expressly limits our liability by providing that we, as general partner, and our officers and directors, are not liable for monetary or other damages to our operating partnership, the limited partners or assignees for losses sustained, liabilities incurred or benefits not derived as a result of errors in judgment or mistakes of fact or law or of any act or omission unless we acted in bad faith and the act or omission was material to the matter giving rise to the loss, liability or benefit not derived.

Transfers

We, as general partner, generally may not transfer any of our OP units in our operating partnership, including any of our limited partner interests, or voluntarily withdraw as the general partner of our operating partnership, except in connection with (i) a merger, consolidation or other combination with or into another person following the consummation of which the equity holders of the surviving entity are substantially identical to our stockholders, or as otherwise permitted by the amended partnership agreement, or (ii) a merger, consolidation or other combination with or into another person or a sale of all or substantially all of our assets or any reclassification, recapitalization or change of our outstanding shares that is approved by more than 50% of the OP units (including those held by us) and pursuant to which each partner receives or has the right to receive cash, securities or other property for each OP unit owned by such partner equal to the product of conversion factor calculated pursuant to the amended partnership agreement and the per-share amount paid to a stockholder.

200

With certain limited exceptions, the limited partners may not transfer their interests in our operating partnership, in whole or in part, without our written consent, which consent may be withheld in our sole and absolute discretion.

Even if our consent is not required for a transfer by a limited partner, we, as general partner, may prohibit the transfer of OP units by a limited partner unless we receive a written opinion of legal counsel that the transfer would not require filing of a registration statement under the Securities Act and would not otherwise violate any federal or state securities laws or regulations applicable to our operating partnership or the OP units. Further, except for certain limited exceptions, no transfer of OP units by a limited partner, without our prior written consent, may be made if:

in the opinion of legal counsel for our operating partnership, there is a significant risk that the transfer would cause our operating partnership to cease to be classified as a partnership for federal income tax purposes or would result in a termination of our operating partnership for federal income tax purposes;

in the opinion of legal counsel for our operating partnership, there is a significant risk that the transfer would adversely affect our ability to continue to qualify as a REIT or would subject us to certain additional taxes; or

such transfer is effectuated through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code.

Except with our consent to the admission of the transferee as a limited partner, no transferee shall have any rights by virtue of the transfer other than the rights of an assignee, and will not be entitled to vote OP units in any matter presented to the limited partners for a vote. We, as general partner, will have the right to consent to the admission of a transferee of the interest of a limited partner, which consent may be given or withheld by us in our sole and absolute discretion.

Mergers and Sales of Assets

Subject to the restrictions on our ability to transfer interest in the operating partnership described above under “—Transfers,” we may and may cause our operating partnership to engage in a merger, consolidation or other combination transaction only if we have provided notice to the limited partners at least 20 business days, or such shorter period as determined by us in our sole and absolute discretion, before the record date for determining stockholders eligible to vote upon the approval of the merger, consolidation or other combination transaction.

Distributions

The amended partnership agreement requires the distribution of available cash on at least a quarterly basis. Available cash is, with respect to any period for which such calculation is being made, cash of the operating partnership, regardless of source, including capital contributions and loans to the operating partnership, as determined by us to be appropriate for distribution in our sole and absolute discretion.

Unless we otherwise specifically agree in the amended partnership agreement or in an agreement entered into at the time a new class or series is created, no partnership interest will be entitled to a distribution in preference to any other partnership interest. A partner will not in any event receive a distribution of available cash with respect to an OP unit for a quarter or shorter period if the partner is entitled to receive a distribution out of that same available cash with respect to a share of our company for which that OP unit has been exchanged or redeemed.

201

We will make reasonable efforts, as determined by us in our sole and absolute discretion and consistent with our qualification as a REIT, to distribute available cash:

to the limited partners so as to preclude the distribution from being treated as part of a disguised sale for federal income tax purposes; and

to us, as general partner, in an amount sufficient to enable us to pay stockholder dividends that will satisfy our requirements for qualifying as a REIT and to avoid any federal income or excise tax liability for us.

Upon the liquidation of the operating partnership, after payment of debts and obligations, any remaining assets of the operating partnership will be distributed to the holders of the OP units that are entitled to any preference in distribution upon liquidation in accordance with the rights of any such class or series, and the balance, if any, will be distributed to the partners in accordance with their capital accounts, after giving effect to all contributions, distributions and allocations for all periods.

Allocation of Net Income and Net Loss

Net income and net loss of our operating partnership are determined and allocated with respect to each taxable year of our operating partnership. Except as otherwise provided in the amended partnership agreement, an allocation of a share of net income or net loss is treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing net income or net loss. Except as otherwise provided in the amended partnership agreement, net income and net loss are allocated to the general partner and the limited partners in accordance with their respective percentage interests in the class at the end of each fiscal year. The amended partnership agreement contains provisions for special allocations intended to comply with certain regulatory requirements, including the requirements of Treasury Regulations Sections 1.704-1(b), 1.704-2 and 1.752-3(a). See “U.S. Federal Income Tax Considerations.”

Redemption

As a general rule, a limited partner may exercise a redemption right to redeem his or her OP units at any time beginning one year following the later of (1) the beginning of the first full calendar month following the completion of this offering and (2) the date of the issuance of the OP units held by the limited partner. If we give the limited partners notice of our intention to make an extraordinary distribution of cash or property to our stockholders or effect a merger, a sale of all or substantially all of our assets, or any other similar extraordinary transaction, each limited partner may exercise its unit redemption right, regardless of the length of time it has held its OP units. This unit redemption right begins when such notice is given, which must be at least 20 business days before the record date for determining stockholders eligible to receive the distribution or to vote upon the approval of the merger, sale or other extraordinary transaction, and ends on the record date. We, in our sole discretion, may shorten the required notice period of not less than 20 business days prior to the record date to determine the stockholders eligible to vote upon a distribution or extraordinary transaction. If no record date is applicable, we may shorten the required notice period of not less than 20 business days before a distribution in our sole and absolute discretion.

A limited partner may exercise its unit redemption right by giving written notice to our operating partnership and us. The OP units specified in the notice generally will be redeemed on the twentieth business day following the date we received the redemption notice or, in the case of the exercise of a unit redemption right in connection with an extraordinary transaction, the date our operating partnership and we received the redemption notice. A limited partner may not exercise the unit redemption right for fewer than 1,000 OP units, or if the limited partner holds fewer than 1,000 OP units, all of the OP units held by that limited partner. The redeeming partner will have no right to receive any distributions paid on or after the redemption date with respect to those OP units redeemed.

202

Unless we elect to assume and perform our operating partnership’s obligation with respect to the unit redemption right, as described below, a limited partner exercising a unit redemption right will receive cash from our operating partnership in an amount equal to the market value of shares of our common stock for which the OP units would have been redeemed if we had assumed and satisfied our operating partnership’s obligation by paying shares of our common stock, as described below. The market value of our common stock for this purpose (assuming a market then exists) will be equal to the average of the closing trading price of our common stock on the NYSE for the 10 trading days before the day on which we received the redemption notice.

We may to elect to assume and perform our operating partnership’s obligation to acquire the OP units being redeemed in exchange for either cash in the amount specified above or a number of shares of our common stock equal to the number of OP units offered for redemption, adjusted as specified in the amended partnership agreement to take into account prior share dividends or any subdivisions or combinations of our common stock. As general partner, we will have the sole discretion to elect whether the redemption right will be satisfied by us in cash or shares of our common stock. No redemption or exchange can occur if delivery of shares of common stock by us would be prohibited either under the provisions of our charter or under applicable federal or state securities laws, in each case regardless of whether we would in fact elect to assume and satisfy the unit redemption right with shares.

Notwithstanding the foregoing, in the event of an extraordinary distribution of cash or property to our stockholders or if we effect a merger, a sale of all or substantially all of our assets, or any other similar extraordinary transaction, we will have the right, exercisable in our sole and absolute discretion, to require the redemption rights of all holders of OP units to be deemed to be automatically exercised and assumed by us for shares of our common stock, effective upon the date on which such transaction is consummated.

Issuance of Additional Partnership Interests

We, as general partner, are authorized to cause our operating partnership to issue additional OP units or other partnership interests to its partners, including us and our affiliates, or other persons without the approval of any limited partners. These OP units may be issued in one or more classes or in one or more series of any class, with designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to one or more other classes of partnership interests (including OP units held by us), as determined by us in our sole and absolute discretion without the approval of any limited partner, subject to limitations described below.

No OP unit or interest may be issued to us as general partner or limited partner unless:

our operating partnership issues OP units or other partnership interests in connection with the grant, award or issuance of shares or other equity interests in us having designations, preferences and other rights so that the economic interests attributable to the newly issued shares or other equity interests in us are substantially similar to the designations, preferences and other rights, except voting rights, of the OP units or other partnership interests issued to us and we contribute to our operating partnership the proceeds received by us from the issuance of such shares or other equity securities; or

we make an additional capital contribution to our operating partnership; or

our operating partnership issues the additional OP units or other partnership interests to all partners holding OP units or other partnership interests in the same class or series in proportion to their respective percentage interests in that class or series.

203

LTIP Units

In addition to the OP units, which are common units, our operating partnership has authorized two classes of LTIP units—Class RS LTIP units and Class O LTIP units. LTIP units are a special class of limited partnership units in our operating partnership that are structured to qualify as “profits interests” for tax purposes, with the result that at issuance they have no capital account in the operating partnership. Following completion of this offering, we may at any time cause our operating partnership to issue either Class RS LTIP units or Class O LTIP units to our directors, officers, employees and consultants. Any LTIP units issued by our operating partnership may be subjected to vesting requirements as determined by the compensation committee of our board of directors.

Class O LTIP units do not participate in quarterly per unit profit distributions. Initially, each Class O LTIP unit will have a capital account of zero and, therefore, the holder of the Class O LTIP unit would receive nothing if our operating partnership were liquidated immediately after the Class O LTIP unit is awarded. However, the partnership agreement requires that “book gain” or economic appreciation in our assets realized by our operating partnership, whether as a result of an actual asset sale or upon the revaluation of our assets, as permitted by applicable Treasury Regulations, be allocated to the Class O LTIP units (after allocations to the Class RS LTIP units and together with the OP units) until the capital account per Class O LTIP unit is equal to the excess of the capital account per OP unit over the amount of such capital account on the date of issuance of the Class O LTIP unit. Each Class O LTIP unit is convertible by our operating partnership or by the holder into OP units at any time, and upon such equalization of the capital account of a Class O LTIP unit (and full vesting of the Class O LTIP unit, if such unit is subject to vesting and is being converted by the holder), the Class O LTIP unit will be convertible into a number of OP units equal to (i) the Class O LTIP unit’s capital account divided by (ii) the capital account balance of an OP unit (i.e., in a manner similar to a typical stock appreciation right), subject to certain exceptions and adjustments. There is a risk that a Class O LTIP unit will never become convertible into such amount of OP units because of insufficient gain realization to equalize capital accounts, and, therefore, the value that a holder will realize for a given number of vested Class O LTIP units may be less than the value of an equal number of shares of our common stock.

204

Preemptive Rights

Except to the extent expressly granted by our operating partnership in an agreement other than the amended partnership agreement, no person or entity, including any partner of our operating partnership, has any preemptive, preferential or other similar right with respect to:

additional capital contributions or loans to our operating partnership; or

the issuance or sale of any OP units or other partnership interests.

Amendment of Partnership Agreement

In general, other than as described below, the amended partnership agreement may only be amended exclusively by us, as general partner, without the consent of the limited partners. Amendments to the amended partnership agreement requiring approval of the limited partners may be proposed by us, as general partner, or by any limited partner holding partnership interests representing 25% or more of the percentage interest of the OP units entitled to vote thereon.

The approval of a majority of the partnership interests held by limited partners other than us is necessary to, among other things:

amend provisions restricting our power to conduct businesses other than owning partnership interests of our operating partnership and the relationship of our shares to OP units;

amend provisions restricting our power to issue or repurchase shares without causing a simultaneous issuance or repurchase of units by the operating partnership;

amend provisions regarding the transfer of partnership interests held by us;

amend provisions regarding the transfer of partnership interests held by limited partners;

amend provisions regarding the unit redemption right of the limited partners.

adopt amendments that would convert a limited partner’s interest into a general partner’s interest;

adopt amendments that would modify the limited liability of a limited partner;

amend provisions regarding or adopt amendments that would alter the interest of a partner in profits or losses, or the right to receive any distributions, except as permitted under the amended partnership agreement with respect to the admission of new partners or the issuance of additional OP units; or

adopt amendments that would impose any obligation to make capital contributions.

Tax Matters

Pursuant to the amended partnership agreement, the general partner is the tax matters partner of our operating partnership. Accordingly, through our role as the general partner of the operating partnership, we have authority to make tax elections under the Code on behalf of our operating partnership, and to take such other actions as permitted under the amended partnership agreement.

Term

Our operating partnership will continue until dissolved upon the first to occur of any of the following:

an event of our withdrawal, as the general partner, (other than an event of bankruptcy), unless within 90 days after the withdrawal, the written consent of the outside limited partners, as defined in the amended partnership agreement, to continue the business of our operating

205

partnership and to the appointment, effective as of the date of withdrawal, of a substitute general partner is obtained;

an election to dissolve the operating partnership by us, as general partner, in our sole and absolute discretion;

entry of a decree of judicial dissolution of our operating partnership pursuant to Delaware law;

the sale of all or substantially all of the assets and properties of our operating partnership for cash or for marketable securities; or

entry of a final and non-appealable judgment by a court of competent jurisdiction ruling that we are bankrupt or insolvent, or entry of a final and non-appealable order for relief against us, under any federal or state bankruptcy or insolvency laws, unless prior to or at the time of the entry of such judgment or order, the consent of a majority of the holders of the OP units to continue the business of our operating partnership and to the appointment, effective as of a date prior to the date of such order or judgment, of a substitute general partner is obtained.

Conflicts of Interest

Conflicts of interest exist or could arise in the future as a result of our relationships with the operating partnership or any limited partner of the operating partnership. Our directors and officers have duties to our company and our stockholders under applicable Maryland law in connection with their management of our company. At the same time, we, as sole general partner, have fiduciary duties to the operating partnership and to its limited partners under Delaware law in connection with the management of the operating partnership. Our duties as sole general partner to the operating partnership and its partners may come into conflict with the duties of our directors and officers to our company and our stockholders.

206

PRINCIPAL AND SELLING STOCKHOLDERS

Immediately prior to the completion of this offering, there will be shares of our Class A common stock outstanding and two stockholders of record. In connection with our formation and initial capitalization, we sold 1,000 shares of common stock to Mr. Chad L. Williams, our Chairman and Chief Executive Officer, for a total consideration of $1,000, and GA QTS Interholdco, LLC received shares of Class A common stock in exchange for its interests in GA REIT. In connection with this offering, we will repurchase the initial shares issued to Mr. Williams for a total of $1,000.

The following table sets forth certain information regarding the beneficial ownership of our common stock and OP units and LTIP units by (1) each of our director nominees, (2) each of our named executive officers, (3) all of our director nominees, and executive officers as a group and (4) each holder of five percent or more of our common stock. This table gives effect to the expected issuance of common stock in connection with this offering and our formation transactions. The extent to which a person holds OP units or LTIP units as opposed to common stock is described in the footnotes below.

The SEC has defined “beneficial ownership” of a security to mean the possession, directly or indirectly, of voting power and/or investment power over such security. A stockholder is also deemed to be, as of any date, the beneficial owner of all securities that such stockholder has the right to acquire within 60 days after that date through (a) the exercise of any option, warrant or right, (b) the conversion of a security, (c) the power to revoke a trust, discretionary account or similar arrangement, or (d) the automatic termination of a trust, discretionary account or similar arrangement. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, common stock subject to options or other rights (as set forth above) held by that person that are exercisable as of , 2013 or will become exercisable within 60 days thereafter, are deemed outstanding, while such shares are not deemed outstanding for purposes of computing percentage ownership of any other person. Each person named in the table has sole voting and investment power with respect to all of the common stock, OP units and LTIP units shown as beneficially owned by such person, except as otherwise indicated in the table or footnotes below.

Unless otherwise indicated, the address of each named person is c/o QTS Realty Trust, Inc., 12851 Foster Street, Overland Park, Kansas 66213. No shares beneficially owned by any executive officer or director have been pledged as security.

Beneficial Ownership Prior to the Offering

Beneficial Ownership After the Offering

Beneficial Owner

Number of
Shares and
OP Units
and LTIP
units

Percentage
of All
Shares(1)

Percentage
of All
Shares and
OP Units
and LTIP
units(2)

Number of
Shares and
OP Units
and LTIP
units

Percentage
of All
Shares(1)

Percentage
of All
Shares and
OP Units
and LTIP
units(2)

Executive Officers and Directors

Chad L. Williams(3)

William H. Schafer(4)

James H. Reinhart(5)

Daniel T. Bennewitz(6)

Jeffrey H. Berson(7)

Shirley E. Goza(8)

John W. Barter(9)

William O. Grabe(10)

Catherine R. Kinney(11)

Peter A. Marino(12)

207

Beneficial Ownership Prior to the Offering

Beneficial Ownership After the Offering

Beneficial Owner

Number of
Shares and
OP Units
and LTIP
units

Percentage
of All
Shares(1)

Percentage
of All
Shares and
OP Units
and LTIP
units(2)

Number of
Shares and
OP Units
and LTIP
units

Percentage
of All
Shares(1)

Percentage
of All
Shares and
OP Units
and LTIP
units(2)

Scott D. Miller(13)

Philip P. Trahanas(14)(15)

Stephen E. Westhead(16)

All directors and executive officers as a group (12 persons)

Other 5% Stockholders

GA QTS Interholdco, LLC (Selling Stockholder)(15)

*	Less than 1.0%

(1)

Assumes shares of common stock are outstanding immediately following this offering. In addition, amounts for individuals assume that all stock options exercisable within 60 days are exercised and all OP units and LTIP units held by the person are exchanged for our common stock, and amounts for all directors and executive officers as a group assume all OP units and LTIP units held by them are exchanged for our common stock in each case, regardless of when such units are exchangeable. The total number of shares of common stock outstanding used in calculating this percentage assumes that none of the stock options exercisable within 60 days, OP units or LTIP units held by other persons are exchanged for our common stock.

(2)

Assumes a total of shares of Class A common stock, shares of Class B common stock, OP units and Class RS LTIP units, which units may be exchanged for cash or Class A common stock as described in “Description of the Partnership Agreement of QualityTech, LP” are outstanding immediately following this offering.

(3)	Consists of shares of Class B common stock, OP units and stock options.

(4)	Consists of Class RS LTIP units and stock options.

(5)	Consists of Class RS LTIP units and stock options.

(6)	Consists of Class RS LTIP units and stock options.

(7)	Consists of shares of restricted stock.

(8)	Consists of OP units and stock options.

(9)	Consists of OP units, Class RS LTIP units and stock options.

(10)	Consists of OP units, Class RS LTIP units and stock options.

(11)	Consists of stock options.

(12)	Consists of OP units, Class RS LTIP units and stock options.

(13)	Consists of stock options.

(14)	Consists of Class RS LTIP units and stock options.

(15)

Consists of shares of Class A common stock. The members of GA QTS Interholdco, LLC are General Atlantic Partners 85, L.P., a Delaware limited partnership, or GAP 85, GAP Coinvestments III, LLC, a Delaware limited liability company, or GAPCO III, GAP Coinvestments IV, LLC, a Delaware limited liability company, or GAPCO IV, GAP Coinvestments CDA, L.P., a Delaware limited partnership, or GAPCO CDA, and GAPCO GmbH & Co., KG, a German limited partnership, or KG, and together with GAP 85, GAPCO III, GAPCO IV and GAPCO CDA, the GA Funds.

General Atlantic GenPar, L.P., a Delaware limited partnership, or GA Genpar, is the general partner of GAP 85. General Atlantic LLC, or GA LLC, is the general partner of GA GenPar. GA LLC is also the managing member of GAPCO III and GAPCO IV and the general partner of GAPCO CDA. GAPCO Management GmbH, a German limited liability company, or GmbH, is the general partner of KG.

208

There are 22 Managing Directors of GA LLC. GA QTS Interholdco, LLC, GAP 85, GAPCO III, GAPCO IV, GAPCO CDA, KG, GenPar, GmbH and GA LLC are a “group” under Rule 13d-5 under the Exchange Act. The Managing Directors of GA LLC may be deemed to share voting and dispositive power with respect to shares and interests held by the GA Funds, and voting and disposition decisions are made by a portfolio committee of GA LLC comprised of certain of the Managing Directors and officers of GA LLC. The current members of the portfolio committee are Andrew C. Pearson, Gabriel Caillaux, William E. Ford, David C. Hodgson, Cory A. Eaves, Rene M. Kern, David Topper and Philip P. Trahanas. The GA Funds control GA QTS Interholdco, LLC by virtue of their ownership of all of the interests of GA QTS Interholdco, LLC. Consequently, GA QTS Interholdco, LLC, the GA Funds, GA LLC and managing directors of GA LLC may, from time to time, consult among themselves and coordinate the voting and disposition of the shares held by GA QTS Interholdco, LLC. The mailing address of the foregoing entities (other than GmbH and KG) is c/o General Atlantic Service Company, LLC, 55 East 52nd Street, 32nd floor, New York, New York 10055. The mailing address of KG and GmbH Management is c/o General Atlantic GmbH, Maximilianstrasse 35b, 80539 Munich, Germany.

(16)	Consists of stock options.

209

DESCRIPTION OF SECURITIES

The following is a summary of the material terms of the securities of our company and certain terms of our charter and bylaws.

General

Upon the completion of this offering, our charter will provide that we may issue up to shares of Class A common stock, $0.01 par value per share, up to shares of Class B common stock, $0.01 par value per share, and shares of preferred stock, $0.01 par value per share. Our charter authorizes our board of directors to amend our charter to increase or decrease the 500,000,000 aggregate number of authorized shares of common stock or preferred stock or the number of shares of stock of any class or series without stockholder approval; provided that our board may not increase the number of shares of Class B common stock that we have authority to issue or reclassify any shares of our capital stock as Class B common stock without stockholder approval. After giving effect to this offering and the formation transactions described in this prospectus, shares of Class A common stock will be issued and outstanding ( shares if the underwriters exercise their option to purchase additional shares in full), shares of Class B common stock will be issued and outstanding and no shares of preferred stock will be issued and outstanding.

Under Maryland law, stockholders generally are not personally liable for our debts or obligations solely as a result of their status as stockholders.

Shares of Common Stock

All shares of Class A common stock offered by this prospectus and all shares of Class B common stock to be issued in the formation transactions will be duly authorized, validly issued, fully paid and nonassessable.

Voting Rights of Common Stock

Subject to the provisions of our charter regarding the restrictions on transfer and ownership of shares of our common stock and except as may otherwise be specified in the terms of any class or series of common stock, each outstanding share of Class A common stock entitles the holder to one vote and each outstanding share of Class B common stock entitles the holder to 50 votes on all matters submitted to a vote of stockholders, including the election of directors, and, except as provided with respect to any other class or series of capital stock, the holders of shares of Class A common stock and Class B common stock will vote together as a single class and will possess the exclusive voting power. There is no cumulative voting in the election of our company’s directors, which means that the stockholders entitled to cast a plurality of the votes of the outstanding shares of common stock can elect all of the directors then standing for election, and the holders of the remaining shares will not be able to elect any directors.

Under the MGCL, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a statutory share exchange or engage in similar transactions outside the ordinary course of business unless declared advisable by a majority of its board of directors and approved by the affirmative vote of stockholders holding at least two-thirds of the shares entitled to vote on the matter unless a lesser percentage (but not less than a majority of all the votes entitled to be cast on the matter) is set forth in the corporation’s charter. Our charter provides

210

that these actions (other than certain amendments to the provisions of our charter related to the removal of directors and the restrictions on ownership and transfer of our shares of stock) may be taken if declared advisable by a majority of our board of directors and approved by the vote of stockholders holding at least a majority of the votes entitled to be cast on the matter. However, Maryland law permits a corporation to transfer all or substantially all of its assets without the approval of the stockholders of the corporation to one or more persons if all of the equity interests of the person or persons are owned, directly or indirectly, by the corporation. In addition, because operating assets may be held by a corporation’s subsidiaries, as in our situation, these subsidiaries may be able to transfer all or substantially all of such assets without a vote of our stockholders.

Dividends, Distributions, Liquidation and Other Rights

Subject to the preferential rights of any other class or series of our stock and to the provisions of our charter regarding the restrictions on transfer of shares of stock, holders of shares of common stock are entitled to receive dividends on such shares of common stock if, as and when authorized by our board of directors and declared by us out of assets legally available therefor. Such holders are also entitled to share ratably in the assets of our company legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up after payment or establishment of reserves for all debts and liabilities of our company and any shares with preferential rights thereto.

Holders of shares of common stock have no preference, conversion (other than as described below with respect to the Class B common stock), exchange, sinking fund or redemption rights, have no preemptive rights to subscribe for any securities of our company and have no appraisal rights. Subject to the preferential rights of any other class or series of our stock and to the provisions of our charter regarding the restrictions on transfer of shares of stock, shares of common stock have equal dividend, liquidation and other rights. For these purposes, Class A common stock and Class B common stock have identical rights.

Conversion Rights

One share of our Class B common stock may be converted into one share of Class A common stock by the holder at any time, and one share of Class B common stock is subject to automatic conversion into one share of Class A common stock upon a direct or indirect transfer of beneficial ownership of such share of Class B common stock to a person other than a permitted transferee. Shares of Class B common stock are also subject to automatic conversion upon certain direct or indirect transfers of beneficial ownership of OP units held by the beneficial owner of such Class B common stock at a ratio of one share of Class B common stock for every 49 OP units transferred to a person other than a permitted transferee. A “permitted transferee” is, with respect to a holder, a family member of such holder or entities owned by or for the benefit of them.

Power to Reclassify Our Unissued Shares of Stock

Our charter authorizes our board of directors to classify and reclassify any unissued shares of common or preferred stock into other classes or series of shares of stock and to establish the number of shares in each class or series and to set the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption for each such class or series; provided that our board may not increase the number of shares of Class B common stock that we have authority to issue or reclassify any shares of our capital stock as Class B common stock without stockholder approved. As a result, our board of directors could authorize the issuance of shares of preferred stock that have priority over the shares of common stock with respect to dividends, distributions and rights upon liquidation and with other terms and conditions that could have the effect of delaying, deterring or preventing a transaction or a change

211

in control that might involve a premium price for holders of shares of our common stock or otherwise might be in their best interest. No shares of preferred stock are presently outstanding, and we have no present plans to issue any shares of preferred stock.

Power to Increase or Decrease Authorized Shares of Common Stock and Issue Additional Shares of Common and Preferred Stock

We believe that the power of our board of directors, without prior stockholder approval (subject to certain exceptions), to amend our charter to increase or decrease the number of authorized shares of stock, to issue additional authorized but unissued shares of common stock or preferred stock and to classify or reclassify unissued shares of common stock or preferred stock and thereafter to cause to issue such classified or reclassified shares of stock will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise. The additional classes or series will be available for issuance without further action by our stockholders, unless such action is required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded. Although our board of directors does not intend to do so, it could authorize us to issue a class or series that could, depending upon the terms of the particular class or series, delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for holders of our shares of stock or otherwise be in the best interest of our stockholders. See “Material Provisions of Maryland Law and of Our Charter and Bylaws—Anti-takeover Effect of Certain Provisions of Maryland Law and of Our Charter and Bylaws.”

Restrictions on Ownership and Transfer

In order for us to qualify as a REIT under the Code, shares of our stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding shares of stock (after taking into account options to acquire shares of common stock) may be owned, directly, indirectly or through attribution, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of a taxable year (other than the first year for which an election to be a REIT has been made).

In order to assist us in complying with the limitations on the concentration of ownership of REIT stock imposed by the Code, and for strategic reasons, our charter generally prohibits:

any person (other than a person who has been granted an exception) from actually or constructively owning more than % of the aggregate of the outstanding shares of our common stock by value or by number of shares, whichever is more restrictive;

any person (other than a person who has been granted an exception) from actually or constructively owning more than % of the aggregate of the outstanding shares of such class or series of our preferred stock by value or by number of shares, whichever is more restrictive;

as excepted holders, any of Chad L. Williams, his family members and certain entities controlled by them, and any person who is or would be a beneficial owner or constructive owner of shares of our common stock as a result of the beneficial ownership or constructive ownership of shares of our common stock by Chad L. Williams, his family members and certain entities controlled by them, from actually or constructively owning more than % of the aggregate of the outstanding shares of our common stock by value or by number of shares, whichever is more restrictive, after application of the relevant attribution rules; and

as excepted holders, any of General Atlantic, and any person who is or would be a beneficial owner or constructive owner of shares of our common stock as a result of the beneficial

212

ownership or constructive ownership of shares of our common stock by General Atlantic, from actually or constructively owning more than % of the aggregate of the outstanding shares of our common stock by value or by number of shares, whichever is more restrictive, after application of the relevant attribution rules.

However, certain entities that are defined as designated investment entities in our charter, which generally includes pension funds, mutual funds, and certain investment management companies, are permitted to own up to 9.8% of the aggregate of our outstanding shares of common stock or preferred stock, so long as each beneficial owner of the shares owned by such designated investment entity would satisfy the % ownership limit if those beneficial owners owned directly their proportionate share of the common stock owned by the designated investment entity. Our board may, in its sole discretion, grant an exemption to the stock ownership limits, subject to such conditions and the receipt by our board of certain representations and undertakings. Our charter permits exceptions to be made for stockholders if our board of directors determines such exceptions will not jeopardize our qualification as a REIT.

Our charter provides an excepted holder limit that allows Chad L. Williams, his family members and entities owned by or for the benefit of them, and any person who is or would be a beneficial owner or constructive owner of shares of our common stock as a result of the beneficial ownership or constructive ownership of shares of our common stock by Chad L. Williams, his family members and certain entities controlled by them, as a group, to own more than % of the aggregate of the outstanding shares of our common stock, so long as, under the applicable tax attribution rules, no one such excepted holder treated as an individual would hold more than % of the aggregate of the outstanding shares of our common stock, no two such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock, no three such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock, no four such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock, and no five such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock. Currently, Chad L. Williams would be attributed all of the shares of common stock owned by each such other excepted holder and, accordingly, the Williams excepted holders as a group would not be allowed to own in excess of % of the aggregate of the outstanding shares of our common stock. If at a later time, there were not one excepted holder that would be attributed all of the shares owned by such excepted holders as a group, the excepted holder limit as applied to the Williams group would not permit each such excepted holder to own % of the aggregate of the outstanding shares of our common stock. Rather, the excepted holder limit as applied to the Williams group would prevent two or more such excepted holders who are treated as individuals under the applicable tax attribution rules from owning a higher percentage of our common stock than the maximum amount of shares that could be owned by any one such excepted holder ( %), plus the maximum amount of shares that could be owned by any one or more other individual stockholders who are not excepted holders ( %).

Our charter also provides an excepted holder limit that allows General Atlantic, and any person who is or would be a beneficial owner or constructive owner of shares of our common stock as a result of the beneficial ownership or constructive ownership of shares of our common stock by General Atlantic, as a group, to own more than % of the aggregate of the outstanding shares of our common stock, so long as, under the applicable tax attribution rules, no one such excepted holder treated as an individual would hold more than % of the aggregate of the outstanding shares of our common stock, no two such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock, no three such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock, no four such excepted holders treated as individuals would own more than % of the aggregate of the outstanding

213

shares of our common stock, and no five such excepted holders treated as individuals would own more than % of the aggregate of the outstanding shares of our common stock. Currently, there are more than five excepted holders who would be attributed all of the shares of common stock owned by General Atlantic. Therefore, the excepted holder limit as applied to the General Atlantic group would prevent five or more such excepted holders who are treated as individuals under the applicable tax attribution rules from owning a higher percentage of our common stock than the maximum amount of shares that could be owned by any one such excepted holder ( %), plus the maximum amount of shares that could be owned by any four other individual stockholders who are not excepted holders ( %).

Our charter also prohibits any person from (1) beneficially or constructively owning shares of our capital stock that would result in our being “closely held” under Section 856(h) of the Code, (2) transferring shares of our capital stock if such transfer would result in our being beneficially owned by fewer than 100 persons (determined without reference to any rules of attribution), (3) beneficially or constructively owning shares of our capital stock that would result in us owning (directly or indirectly) an interest in a tenant if the income derived by us from that tenant for our taxable year during which such determination is being made would reasonably be expected to equal or exceed the lesser of one percent of our gross income or an amount that would cause us to fail to satisfy any of the REIT gross income requirements and (4) beneficially or constructively owning shares of our capital stock that would cause us otherwise to fail to qualify as a REIT. Any person who acquires or attempts or intends to acquire beneficial ownership of shares of our capital stock that will or may violate any of the foregoing restrictions on transferability and ownership is required to give notice immediately to us and provide us with such other information as we may request in order to determine the effect of such transfers on our qualification as a REIT. The foregoing restrictions on transferability and ownership will not apply if our board of directors determines that it is no longer in our best interest to attempt to qualify, or to qualify, or to continue to qualify, as a REIT. In addition, our board of directors may determine that compliance with the foregoing restrictions is no longer required for our qualification as a REIT.

Our board of directors, in its sole discretion, may exempt a person from the above ownership limits and any of the restrictions described above. However, our board of directors may not grant an exemption to any person unless our board of directors obtains such representation, covenant and understandings as our board of directors may deem appropriate in order to determine that granting the exemption would not result in our losing our qualification as a REIT. As a condition of granting the exemption, our board of directors may require a ruling from the IRS or an opinion of counsel in either case in form and substance satisfactory to our board of directors, in its sole discretion in order to determine or ensure our qualification as a REIT.

In addition, our board of directors from time to time may increase the ownership limits. However, the ownership limits may not be increased if, after giving effect to such increase, five or fewer individuals could own or constructively own in the aggregate, more than 49.9% in value of the shares then outstanding. Our board of directors, in its sole discretion, may from time to time decrease the ownership limits, provided that no decreased limit will apply to any person whose ownership percentage exceeds such decreased limit until that person’s ownership percentage equals or falls below such decreased ownership limit.

However, if any transfer of our shares of stock occurs which, if effective, would result in any person beneficially or constructively owning shares of stock in excess, or in violation, of the above transfer or ownership limitations, known as a prohibited owner, then that number of shares of stock, the beneficial or constructive ownership of which otherwise would cause such person to violate the transfer or ownership limitations (rounded up to the nearest whole share), will be automatically transferred to a charitable trust for the exclusive benefit of a charitable beneficiary, and the prohibited owner will not acquire any rights in such shares. This automatic transfer will be considered effective as of the close of

214

business on the business day before the violative transfer. If the transfer to the charitable trust would not be effective for any reason to prevent the violation of the above transfer or ownership limitations, then the transfer of that number of shares of stock that otherwise would cause any person to violate the above limitations will be void. Shares of stock held in the charitable trust will continue to constitute issued and outstanding shares of our stock. The prohibited owner will not benefit economically from ownership of any shares of stock held in the charitable trust, will have no rights to dividends or other distributions and will not possess any rights to vote or other rights attributable to the shares of stock held in the charitable trust. The trustee of the charitable trust will be designated by us and must be unaffiliated with us or any prohibited owner and will have all voting rights and rights to dividends or other distributions with respect to shares of stock held in the charitable trust, and these rights will be exercised for the exclusive benefit of the trust’s charitable beneficiary. Any dividend or other distribution paid before our discovery that shares of stock have been transferred to the trustee will be paid by the recipient of such dividend or distribution to the trustee upon demand, and any dividend or other distribution authorized but unpaid will be paid when due to the trustee. Any dividend or distribution so paid to the trustee will be held in trust for the trust’s charitable beneficiary. Subject to Maryland law, effective as of the date that such shares of stock have been transferred to the charitable trust, the trustee, in its sole discretion, will have the authority to:

rescind as void any vote cast by a prohibited owner prior to our discovery that such shares have been transferred to the charitable trust; and

recast such vote in accordance with the desires of the trustee acting for the benefit of the trust’s charitable beneficiary.

However, if we have already taken irreversible corporate action, then the trustee will not have the authority to rescind and recast such vote.

Within 20 days of receiving notice from us that shares of stock have been transferred to the charitable trust, and unless we buy the shares first as described below, the trustee will sell the shares of stock held in the charitable trust to a person, designated by the trustee, whose ownership of the shares will not violate the ownership limitations in our charter. Upon the sale, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the prohibited owner and to the charitable beneficiary. The prohibited owner will receive the lesser of:

the price paid by the prohibited owner for the shares or, if the prohibited owner did not give value for the shares in connection with the event causing the shares to be held in the charitable trust (for example, in the case of a gift or devise), the market price of the shares on the day of the event causing the shares to be held in the charitable trust; and

the price per share received by the trustee from the sale or other disposition of the shares held in the charitable trust (less any commission and other expenses of a sale).

The trustee may reduce the amount payable to the prohibited owner by the amount of dividends and distributions paid to the prohibited owner and owed by the prohibited owner to the trustee. Any net sale proceeds in excess of the amount payable to the prohibited owner will be paid immediately to the charitable beneficiary. If, before our discovery that shares of stock have been transferred to the charitable trust, such shares are sold by a prohibited owner, then:

such shares will be deemed to have been sold on behalf of the charitable trust; and

to the extent that the prohibited owner received an amount for such shares that exceeds the amount that the prohibited owner was entitled to receive as described above, the excess must be paid to the trustee upon demand.

215

In addition, shares of stock held in the charitable trust will be deemed to have been offered for sale to us, or our designee, at a price per share equal to the lesser of:

the price per share in the transaction that resulted in such transfer to the charitable trust (or, in the case of a gift or devise, the market price at the time of the gift or devise); and

the market price on the date we, or our designee, accept such offer.

We may reduce the amount payable to the prohibited owner by the amount of dividends and distributions paid to the prohibited owner and owed by the prohibited owner to the trustee. We may pay the amount of such reduction to the trustee for the benefit of the charitable beneficiary. We will have the right to accept the offer until the trustee has sold the shares of stock held in the charitable trust. Upon such a sale to us, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the prohibited owner and any dividends or other distributions held by the trustee will be paid to the charitable beneficiary.

All certificates representing shares of our capital stock bear a legend referring to the restrictions described above.

Every owner of more than 5% (or such lower percentage as required by the Code or the regulations promulgated thereunder) in value of the outstanding shares of our capital stock within 30 days after the end of each taxable year, will be required to give written notice to us stating the name and address of such owner, the number of shares of each class and series of shares of our stock that the owner beneficially owns and a description of the manner in which the shares are held. Each such owner shall provide to us such additional information as we may request in order to determine the effect, if any, of the owner’s beneficial ownership on our qualification as a REIT and to ensure compliance with our ownership limitations. In addition, each stockholder shall upon demand be required to provide to us such information as we may request, in good faith, in order to determine our qualification as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance.

Our ownership limitations could delay, defer or prevent a transaction or a change in control of us that might involve a premium price for holders of our common stock or might otherwise be in the best interest of our stockholders.

Preferred Stock

Our charter authorizes our board of directors to classify or reclassify and issue one or more classes or series of preferred stock without stockholder approval. Our board of directors may determine the relative preferences, conversions and other rights, voting powers, restrictions and limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of each class or series of preferred stock so issued, which may be more beneficial than the rights, preferences and privileges attributable to our common stock. The issuance of preferred stock could have the effect of delaying or preventing a change in control. Our board of directors has no present plans to issue preferred stock but may do so at any time in the future without stockholder approval.

Exchange Listing

We intend to apply to have our Class A common stock listed on the NYSE under the symbol “QTS.”

Transfer Agent and Registrar

We expect the transfer agent and registrar for our shares of common stock to be Computershare Trust Company, N.A.

216

MATERIAL PROVISIONS OF MARYLAND LAW AND OF OUR CHARTER AND BYLAWS

The following is a summary of certain provisions of Maryland law and our charter and bylaws.

Our Board of Directors

Our charter and bylaws provide that the number of directors of our company may be established by our board of directors, but may not be fewer than the minimum number required under Maryland law nor more than 15 directors. Initially, we expect to have eight directors. Our charter and bylaws provide that any vacancy, including a vacancy created by an increase in the number of directors, may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum. Any individual elected to fill such vacancy will serve for the remainder of the full term and until a successor is duly elected and qualified.

Pursuant to our bylaws, each of our directors is elected by our stockholders to serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualifies under Maryland law. Holders of shares of our common stock will have no right to cumulative voting in the election of directors. Directors are elected by a plurality of the votes cast.

Our bylaws provide that at least a majority of our directors will be “independent,” with independence being defined in the manner established by our board of directors and in a manner consistent with listing standards established by the NYSE.

Removal of Directors

Our charter provides that, subject to the rights of holders of one or more classes or series of preferred stock to elect or remove one or more directors, a director may be removed only for cause (as defined in our charter) and only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of directors and that our board of directors has the exclusive power to fill vacant directorships. These provisions may preclude stockholders from removing incumbent directors and filling the vacancies created by such removal with their own nominees.

Business Combinations

Under the MGCL, certain “business combinations” (including a merger, consolidation, share exchange or, in certain circumstances specified under the statute, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and any interested stockholder, or an affiliate of such an interested stockholder, are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. Maryland law defines an interested stockholder as:

any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s voting stock; or

an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation.

A person is not an interested stockholder under the statute if the board of directors approves in advance the transaction by which the person otherwise would have become an interested stockholder. In approving a transaction, however, the board of directors may provide that its approval is subject to compliance at or after the time of the approval, with any terms and conditions determined by the board of directors.

217

After the five-year prohibition, any business combination between the company and an interested stockholder generally must be recommended by the board of directors and approved by the affirmative vote of at least:

80% of the votes entitled to be cast by holders of outstanding voting shares of stock of the corporation; and

two-thirds of the votes entitled to be cast by holders of voting shares of stock of the corporation other than shares held by the interested stockholder with whom (or with whose affiliate) the business combination is to be effected or shares held by an affiliate or associate of the interested stockholder, unless, among other conditions, the corporation’s common stockholders receive a minimum price (as described under Maryland law) for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares.

These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by a corporation’s board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has, or will have, by resolution opted out of the business combination provisions of the MGCL and, consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations between us and an interested stockholder, unless our board in the future alters or repeals this resolution.

We cannot assure you that our board of directors will not determine to become subject to such business combination provisions in the future. However, an alteration or repeal of this resolution will not have any effect on any business combinations that have been consummated or upon any agreements existing at the time of such modification or repeal.

Control Share Acquisitions

The MGCL provides that “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights except to the extent approved at a special meeting of stockholders by the affirmative vote of two-thirds of the votes entitled to be cast on the matter, excluding shares of stock in a corporation in respect of which any of the following persons are entitled to exercise or direct the exercise of the voting power of such shares in the election of directors: (1) a person who makes or proposes to make a control share acquisition, (2) an officer of the corporation or (3) an employee of the corporation who is also a director of the corporation. “Control shares” are voting shares of stock that, if aggregated with all other such shares of stock previously acquired by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power:

one-tenth or more but less than one-third;

one-third or more but less than a majority; or

a majority or more of all voting power.

Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means the acquisition, directly or indirectly, of ownership of, or the power to direct the exercise of voting power with respect to, issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and making an “acquiring person

218

statement” as described in the MGCL), may compel our board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the control shares. If no request for a special meeting is made, we may present the question at any stockholders meeting.

If voting rights of control shares are not approved at the meeting or if the acquiring person does not deliver an “acquiring person statement” as required by Maryland law, then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or of any meeting of stockholders at which the voting rights of such shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition. The control share acquisition statute does not apply (1) to shares acquired in a merger, consolidation or share exchange if we are a party to the transaction or (2) to acquisitions approved or exempted by the charter or bylaws of the corporation.

Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our common stock. There is no assurance, however, that our board of directors will not amend or eliminate this provision at any time in the future.

Subtitle 8

Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of the following five provisions:

a classified board;

a two-thirds stockholder vote requirement for removing a director;

a requirement that the number of directors be fixed only by vote of the directors;

a requirement that a vacancy on the board be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and

a requirement that requires the request of the holders of at least a majority of all votes entitled to be cast to call a special meeting of stockholders.

Through provisions in our charter and bylaws unrelated to Subtitle 8, we already (1) require the affirmative vote of the holders of not less than two-thirds of all of the votes entitled to be cast on the matter for the removal of any director from the board, which removal will be allowed only for cause, (2) vest in the board the exclusive power to fix the number of directorships, subject to limitations set forth in our charter and bylaws, and fill vacancies and (3) require, unless called by the chairman of our board of directors, our president or chief executive officer or our board of directors, the written request of stockholders entitled to cast not less than a majority of all votes entitled to be cast at such meeting to call a special meeting. We have not elected to create a classified board. In the future, our board of directors may elect, without stockholder approval, to create a classified board or adopt one or more of the other provisions of Subtitle 8.

Amendment of Our Charter and Bylaws and Approval of Extraordinary Transactions

219

board of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter unless a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter, is set forth in the corporation’s charter. Our charter provides that these actions (other than certain amendments to the provisions of our charter related to the removal of directors and the restrictions on ownership and transfer of our shares of stock) may be taken if declared advisable by a majority of our board of directors and approved by the vote of stockholders holding at least a majority of the votes entitled to be cast on the matter.

Our board of directors has the exclusive power to adopt, alter or repeal any provision of our bylaws and to make new bylaws.

Meetings of Stockholders

Under our bylaws, annual meetings of stockholders are to be held each year at a date and time as determined by our board of directors. Special meetings of stockholders may be called only by a majority of the directors then in office, by the chairman of our board of directors, our president or our chief executive officer. Additionally, subject to the provisions of our bylaws, special meetings of the stockholders shall be called by our secretary upon the written request of stockholders entitled to cast at least a majority of the votes entitled to be cast at such meeting. Only matters set forth in the notice of the special meeting may be considered and acted upon at such a meeting. Maryland law and our bylaws provide that any action required or permitted to be taken at a meeting of stockholders may be taken without a meeting by unanimous written consent, if that consent sets forth that action and is signed by each stockholder entitled to vote on the matter.

Advance Notice of Director Nominations and New Business

Our bylaws provide that, with respect to an annual meeting of stockholders, nominations of persons for election to our board of directors and the proposal of business to be considered by stockholders at the annual meeting may be made only:

pursuant to our notice of the meeting;

by or at the direction of our board of directors; or

by a stockholder who was a stockholder of record both at the time of giving of the notice of the meeting and at the time of the annual meeting, who is entitled to vote at the meeting and who has complied with the advance notice procedures set forth in our bylaws.

With respect to special meetings of stockholders, only the business specified in our notice of meeting may be brought before the meeting of stockholders. Nominations of persons for election to our board of directors may be made only:

pursuant to our notice of the meeting;

by or at the direction of our board of directors; or

provided that our board of directors has determined that directors shall be elected at such meeting, by a stockholder who is a stockholder of record both at the time of giving of the notice required by our bylaws and at the time of the meeting, who is entitled to vote at the meeting and who has complied with the advance notice provisions set forth in our bylaws.

The purpose of requiring stockholders to give advance notice of nominations and other proposals is to afford our board of directors the opportunity to consider the qualifications of the proposed nominees or the advisability of the other proposals and, to the extent considered necessary by our board of directors, to inform stockholders and make recommendations regarding the nominations or

220

other proposals. The advance notice procedures also permit a more orderly procedure for conducting our stockholder meetings. Although our bylaws do not give our board of directors the power to disapprove timely stockholder nominations and proposals, our bylaws may have the effect of precluding a contest for the election of directors or proposals for other action if the proper procedures are not followed, and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors to our board of directors or to approve its own proposal.

Anti-takeover Effect of Certain Provisions of Maryland Law and Our Charter and Bylaws

The provisions of our charter on removal of directors and the advance notice provisions of the bylaws could delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for holders of our common stock or otherwise be in the best interests of our stockholders. Likewise, if our board of directors were to opt in to the business combination provisions of the MGCL or certain of the provisions of Subtitle 8 of Title 3 of the MGCL, to the extent we have not already done so, or if the provision in the bylaws opting out of the control share acquisition provisions of the MGCL were amended or rescinded, these provisions of the MGCL could have similar anti-takeover effects.

Indemnification and Limitation of Directors’ and Officers’ Liability

The MGCL permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our charter contains such a provision that eliminates such liability to the maximum extent permitted by Maryland law.

The MGCL requires a corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. The MGCL permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or are threatened to be made a party by reason of their service in those or other capacities unless it is established that:

the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty;

the director or officer actually received an improper personal benefit in money, property or services; or

in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

However, under the MGCL, a Maryland corporation may not indemnify a director or officer for an adverse judgment in a suit by or in the right of the corporation or if the director or officer was adjudged liable on the basis that personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses.

In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of:

a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and

221

a written undertaking by the director or on the director’s behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director did not meet the standard of conduct.

Our charter and bylaws obligate us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to:

any present or former director or officer who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity; or

any individual who, while serving as a director or officer of our company and at our request, serves or has served another corporation, REIT, partnership, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner or trustee of such corporation, REIT, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity.

Our charter and bylaws also permit us, with the approval of our board of directors, to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described above and to any employee or agent of our company or a predecessor of our company. With respect to our directors, we will be the indemnitor of first resort to the extent that any directors simultaneously are entitled to indemnification from General Atlantic with respect to any of the same matters for which we are obligated to provide indemnification pursuant to our charter and bylaws.

Upon completion of this offering, we intend to enter into indemnification agreements with each of our directors and executive officers that would provide for indemnification to the maximum extent permitted by Maryland law. See “Management—Limitation of Liability and Indemnification Agreements.”

Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Ownership Limits

In order to assist us in complying with the limitations on the concentration of ownership of REIT stock imposed by the Code and for strategic reasons, our charter generally prohibits any person (other than a person who has been granted an exception) from actually or constructively owning more than % of the aggregate of the outstanding shares of our common stock by value or by number of shares, whichever is more restrictive, except for certain designated investment entities that may own up to 9.8% of the aggregate of the outstanding shares our common stock, subject to certain conditions. Chad L. Williams, his family members and certain entities controlled by them will be excepted holders under our charter and none of them will be permitted to own more than % of the aggregate of the outstanding shares of such class or series of our common stock by value or by number of shares, whichever is more restrictive, after application of the relevant attribution rules. In addition, General Atlantic will be an excepted holder under our charter, and no beneficial owner of General Atlantic will be permitted to own more than % of the aggregate of the outstanding shares of such class or series of our common stock by value or by number of shares, whichever is more restrictive, after application of the relevant attribution rules. Our charter permits exceptions to be made for stockholders provided our board of directors determines such exceptions will not jeopardize our qualification as a REIT.

222

REIT Qualification

Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without approval of our stockholders, if it determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT.

223

SHARES ELIGIBLE FOR FUTURE SALE

General

Upon completion of this offering, we will have outstanding shares of our Class A common stock ( shares of our Class A common stock if the underwriters exercise their option to purchase additional shares in full) and shares of our Class B common stock. In addition, a total of shares of our Class A common stock are reserved for issuance upon exchange of OP units, the conversion of Class B common stock, exercise of outstanding options and the exchange of currently outstanding LTIP units.

Of these shares, the shares of our Class A common stock sold in this offering ( shares of our Class A common stock if the underwriters exercise their option to purchase additional shares in full) will be freely transferable without restriction or further registration under the Securities Act, subject to the limitations on ownership set forth in our charter, except for any shares of common stock purchased in this offering by our “affiliates,” as that term is defined by Rule 144 under the Securities Act. The remaining shares of our Class A common stock expected to be outstanding immediately after completion of this offering, plus any shares of Class A common stock purchased by affiliates in this offering and the shares of our Class A common stock owned by affiliates upon redemption of OP units, will be “restricted shares” as defined in Rule 144 and may not be sold in the absence of registration under the Securities Act unless an exemption from registration is available, including the exemption provided by Rule 144. In addition, upon completion of this offering, restricted shares of Class A common stock will be granted to our directors, executive officers and other employees. The shares of our Class B common stock issued to Chad L. Williams, our Chairman and Chief Executive Officer in the formation transactions may not be sold or otherwise transferred or encumbered except as set forth in our charter. Approximately % of the aggregate shares of common stock and OP units to be issued in our formation transactions and to be granted under our equity incentive plan will be subject to lock-up agreements.

Prior to the completion of this offering, we will have two holders of our Class A common stock.

Shares of our Class A common stock are newly issued securities for which there is no established trading market. No assurance can be given as to (1) the likelihood that an active trading market for shares of our Class A common stock will develop or be sustained, (2) the liquidity of any such market, (3) the ability of stockholders to sell their shares of our Class A common stock when desired or at all, or (4) the prices that stockholders may obtain for any of their shares of our Class A common stock. No prediction can be made as to the effect, if any, that future issuances or resales of shares of our common stock, or the availability of shares of our common stock for future issuance or resale, will have on the market price of shares of our common stock prevailing from time to time. Issuances or sales of substantial amounts of our Class A common stock (including shares of our Class A common stock issued upon the exchange of OP units or LTIP units or the conversion of Class B common stock), or the perception that such issuances or sales are occurring or may occur, could adversely affect prevailing market prices of our common stock. See “Risk Factors—Risks Related to this Offering—Future issuances or sales of our common stock, or the perception of the possibility of such issuances or sales, may depress the market price of our common stock.”

For a description of certain restrictions on transfers of shares of our common stock held by our stockholders, see “Description of Securities—Restrictions on Ownership and Transfer.”

224

Rule 144

In general, under Rule 144 as currently in effect, beginning 90 days after the date of this prospectus, a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has beneficially owned shares considered to be restricted securities under Rule 144 for at least six months would be entitled to sell those shares, subject only to the availability of current public information about us. A non-affiliated person who has beneficially owned shares considered to be restricted securities under Rule 144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144.

An affiliate of ours who has beneficially owned our common stock for at least six months would be entitled to sell, within any three-month period, a number of shares that does not exceed the greater of:

1% of our common stock then outstanding; or

the average weekly trading volume of our common stock on the NYSE during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC.

Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates also are subject to manner of sale provisions, notice requirements and the availability of current public information about us.

Redemption Rights

Beginning on or after the date which is 12 months after the completion of this offering, limited partners of our operating partnership have the right to require our operating partnership to redeem part or all of their OP units for cash, based upon the fair market value of an equivalent amount of common stock at the time of the redemption, or, at our election, shares of our Class A common stock on a one-for-one basis, subject to the ownership limits set forth in our charter and described under the section entitled “Description of Securities—Restrictions on Ownership and Transfer.” See also “Description of the Partnership Agreement of QualityTech, LP.”

Registration Rights

New Registration Rights Agreement

Upon completion of this offering, we will enter into a registration rights agreement with our continuing investors, including certain of our directors and executive officers. Under the registration rights agreement, subject to certain limitations, during the period beginning 15 days prior to the date those individuals are first permitted to redeem their OP units pursuant to the amended partnership agreement and ending 15 days thereafter, we will file one or more registration statements covering the issuance to them of shares of our Class A common stock upon redemption of their OP units (collectively, the “registrable shares”). We will agree to use our reasonable best efforts to cause each shelf registration statement to be declared effective as soon as practicable after it is filed.

We also agree to indemnify the persons receiving rights against specified liabilities, including certain potential liabilities arising under the Securities Act or Exchange Act, or to contribute to the expenses incurred or the payments such persons may be required to make in respect thereof. We agree to pay all of the expenses relating to the registration and any underwritten offerings of such securities, including, without limitation, all registration, listing, filing and stock exchange or FINRA fees, all fees and expenses of complying with securities or “blue sky” laws, all printing expenses, all fees and disbursements of counsel and independent public accountants retained by us and the cost of any liability insurance or other premiums for insurance obtained in connection with any shelf registration statement pursuant to the registration rights agreement. The holder will be responsible for underwriting discounts and commissions, any out-of-pocket expenses (including disbursements of such holder’s counsel, accountants and other advisors), and any transfer taxes related to the sale or disposition of the shares.

225

Existing Registration Rights Agreements

General Atlantic and Chad L. Williams, our Chairman and Chief Executive Officer, each is a party to a separate registration rights agreement with our operating partnership that was entered into in connection with the 2009 transactions. Under those registration rights agreements, beginning 180 days after the completion of this offering, General Atlantic and Mr. Williams have demand rights to require us to file a new registration statement and prospectus providing for the sale by such holders of some or all of their shares of Class A common stock, provided that (i) unless the holder is registering all of its shares, the shares to be registered in any registration must have an aggregate offering price of at least $5 million, (ii) the holders may make only four such demands, and (iii) we are not required to affect more than two such demands in any 12 month period. The holders may require us to use our reasonable best efforts to cause any such demand registration to be in the form of an underwritten offering. We may satisfy this obligation by causing the requested shares to be included as part of an existing shelf registration statement that we then have on file with (and that has been declared effective by) the SEC.

Grants Under Our Equity Incentive Plan

We intend to adopt our equity incentive plan immediately prior to the completion of this offering. The equity incentive plan provides for the grant of incentive awards to our employees, directors and consultants. We intend to issue an aggregate of shares of Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) to certain of our officers, directors, employees and consultants upon completion of this offering, options to acquire shares of our Class A common stock (based on the mid-point of the price range set forth on the cover of this prospectus) to former holders of our Class O LTIP units (which will be issued to preserve the economic position of such holders upon conversion of their Class O LTIP units in connection with completion of this offering and provide additional incentives) as described in “Structure and Formation of Our Company—Formation Transactions” and to reserve an additional shares of Class A common stock for issuance under the plan, subject to increase as described in “Management—Executive Compensation—2013 Equity Incentive Plan.”

We intend to file with the SEC a registration statement on Form S-8 covering the Class A common stock issuable under the equity incentive plan. Class A common stock covered by this registration statement, including any Class A common stock issuable upon the exercise of options or restricted shares, will be eligible for transfer or resale without restriction under the Securities Act unless held by affiliates.

226

Lock-Up Agreements

In addition to the limits placed on the sale of our common stock by operation of Rule 144 and other provisions of the Securities Act, we and our officers and directors and the Selling Stockholder have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any shares of our common stock or securities convertible into or exercisable or exchangeable for shares of our Class A common stock (including OP units) during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior consent of the representatives. See “Underwriting.”

227

U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the material federal income tax consequences of an investment in our common stock. For purposes of this section under the heading “U.S. Federal Income Tax Considerations,” references to “QTS Realty Trust, Inc.” “we,” “our,” and “us” mean only “QTS Realty Trust, Inc.” and not its subsidiaries, except as otherwise indicated, and references to “tenants” are to persons who are treated as lessees of real property for purposes of the REIT requirements including, in general, persons who are referred to as “customers” elsewhere in this prospectus. This summary is based upon the Code, the regulations promulgated by the U.S. Treasury Department, rulings and other administrative pronouncements issued by the IRS, and judicial decisions, all as currently in effect, and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given you that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. This summary is also based upon the assumption that we and our subsidiaries and affiliated entities will operate in accordance with our and their applicable organizational documents. This summary is for your general information only and is not tax advice. It does discuss any state, local or non-U.S. tax consequences relevant to us or an investment in our stock, and it does not discuss all aspects of federal income taxation that may be important to a particular investor in light of its investment or tax circumstances, or to investors subject to special tax rules, such as:

an insurance company;

a financial institution, broker, or dealer;

a regulated investment company or a REIT;

a holder who received our stock through the exercise of employee stock options or otherwise as compensation;

a person holding our stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security,” or other integrated investment;

a person holding our stock indirectly through other vehicles, such as partnerships, trusts, or other pass-through entities; and

except as discussed below, a tax-exempt organization or a foreign investor.

This summary assumes that investors will hold our stock as a capital asset, which generally means property held for investment. The federal income tax treatment of holders of our stock depends in some instances on determinations of fact and interpretations of complex provisions of federal income tax law for which no clear precedent or authority may be available. In addition, the tax consequences to any particular stockholder of holding our stock will depend on the stockholder’s particular tax circumstances.

You are urged to consult your tax advisor regarding the federal, state, local, and foreign income and other tax consequences to you in light of your particular investment or tax circumstances of acquiring, holding, exchanging, or otherwise disposing of our stock.

Taxation of QTS Realty Trust, Inc.

We were formed as a Maryland corporation on May 17, 2013, and, with effect as of such date, we elected to be treated as an S corporation for federal income tax purposes. We will revoke our tax status as an S corporation immediately prior to the completion of this offering. We will elect to be treated as a REIT for federal income tax purposes, effective for our taxable year beginning on the date immediately following the effective date of the revocation of our tax status as an S corporation and ending December 31, 2013, with our federal income tax return on IRS Form 1120-REIT for such year.

228

We intend to elect to be taxed as a REIT under Sections 856 through 860 of the Code, commencing with our taxable year ending December 31, 2013, upon the filing of our federal income tax return for such year. We believe that we have been organized and we expect to operate in such a manner as to qualify for taxation as a REIT under the Code. We have not sought and will not seek a private letter ruling from the IRS regarding any matter discussed in this section, except for a ruling on certain activities not currently being conduct through the REIT, as described below.

We have received an opinion of Hogan Lovells US LLP, or Hogan Lovells, to the effect that, after taking into account the formation transactions described herein, including the merger of GA REIT with and into us, we have been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and that our proposed method of operation will enable us to meet the requirements for qualification and taxation as a REIT commencing with our taxable year ending December 31, 2013. It must be emphasized that the opinion of Hogan Lovells is based on various assumptions relating to our organization and operation, and is conditioned upon fact-based representations and covenants made by our management regarding our organization, assets, and income, and the present and future conduct of our business operations. While we intend to operate so that we will qualify as a REIT, given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, no assurance can be given by Hogan Lovells or by us that we will qualify as a REIT for any particular year. The opinion is expressed as of the date issued. Hogan Lovells will have no obligation to advise us or our stockholders of any subsequent change in the matters stated, represented or assumed, or of any subsequent change in the applicable law. You should be aware that opinions of counsel are not binding on the IRS, and no assurance can be given that the IRS will not challenge the conclusions set forth in such opinions.

Taxation of REITs in General

Qualification and taxation as a REIT depends upon our ability to meet, on a continuing basis, various qualification requirements imposed upon REITs by the Code. The material qualification requirements are summarized below under “—Requirements for Qualification—General.” While we intend to operate, so that we qualify as a REIT, we cannot assure you that the IRS will not challenge our qualification, or that we will be able to operate in accordance with the REIT requirements in the future. See “—Failure to Qualify.”

Provided that we qualify as a REIT, generally we will be entitled to a deduction for dividends that we pay and therefore will not be subject to federal corporate income tax on our “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains) that is currently distributed to our stockholders. This treatment substantially eliminates the “double taxation” at both the corporate and stockholder levels that generally results from an investment in a “C” corporation. A “C corporation” is a corporation that generally is required to pay tax at the corporate level. Double taxation means taxation once at the corporate level when income is earned and once again at the stockholder level when the income is distributed. In general, the income that we generate is taxed only at the stockholder level upon the distribution of that income. Dividends paid by corporations to U.S. individuals are taxed at a reduced rate of 20%. With limited exceptions, however, dividends received by stockholders from us, or from other entities that are taxed as REITs, other than dividends designated as “capital gain dividends” or “qualified dividend income,” are generally taxed at ordinary income rates, which is currently taxed at a maximum rate of 39.6%. See “Taxation of Holders of Stock—Taxation of Taxable U.S. Stockholders—Distributions Generally.”

229

Any net operating losses, foreign tax credits and other tax attributes generally do not pass through to our stockholders of the REIT, subject to special rules for certain items such as the capital gains that we recognize. See “Taxation of Holders of Stock.”

If we qualify as a REIT, we will nonetheless be subject to federal tax in the following circumstances:

We will be taxed at regular corporate rates on any undistributed “REIT taxable income,” including undistributed net capital gains, for any taxable year. A REIT’s “REIT taxable income” is the otherwise taxable income of the REIT subject to certain adjustments, including a deduction for dividends paid.

We may be subject to the “alternative minimum tax” on our undistributed items of tax preference, if any.

If we earn net income from “prohibited transactions,” which generally are sales or other dispositions of property, other than foreclosure property, that is included in our inventory or held by us primarily for sale to tenants in the ordinary course of business, we will be subject to a tax at the rate of 100% of such net income. See “—Income Tests—Prohibited Transactions Tax” and “—Income Tests—Income from Foreclosure Property” below.

If we have net income from the sale or other disposition of “foreclosure property” which is held primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we will be subject to tax at the highest corporate rate on such income. In general, foreclosure property is property acquired by us as a result of having bid in a foreclosure or through other legal means subsequent to a default on a lease of such property or on an indebtedness secured by such property. See “—Income Tests—Income from Foreclosure Property” below.

We may elect to retain and pay federal income tax on our net long-term capital gain. To the extent we make a timely designation of such gain to our stockholders, a U.S. stockholder would (a) include its proportionate share of our undistributed long-term capital gain in its income, (b) be deemed to have paid the tax that we paid on such gain, (c) be allowed a credit for its proportionate share of the tax it was deemed to have paid, and (d) increase its basis in our common stock. See “—Taxation of Holders of Stock—Taxation of Taxable U.S. Stockholders—Capital Gain Dividends; Retained Net Capital Gain.”

If we fail to satisfy either the 75% gross income test or the 95% gross income test, as discussed below, but nonetheless maintain our qualification as a REIT because we satisfy other requirements and our failure to satisfy such test or tests is due to reasonable cause and not due to willful neglect, we will be subject to a tax equal to the product of (a) the gross income attributable to the greater of the amount by which we fail either of the 75% or 95% gross income tests, multiplied by (b) a fraction intended to reflect our profitability.

If we fail to satisfy any of the asset tests because we own assets the total value of which exceeds a statutory de minimis standard but the failure is due to reasonable cause and not due to willful neglect and we nonetheless maintain our qualification as a REIT because other requirements are met, we will be subject to a tax equal to the greater of $50,000 or the amount determined by multiplying the net income generated by the non-qualifying assets by the highest corporate tax rate applicable to corporations during the periods when such assets would have caused us to fail the relevant asset test.

If we fail to distribute during each calendar year at least the sum of (a) 85% of our REIT ordinary income for such year, (b) 95% of our REIT capital gain net income for such year, and (c) any undistributed taxable income from prior periods less excess distributions from prior periods, we will be subject to a nondeductible 4% excise tax on the excess of such required

230

distribution over the sum of the amounts actually distributed and retained amounts on which income tax was paid at the corporate level.

If we fail to satisfy a requirement under the Code which would result in the loss of our REIT status, other than a failure to satisfy a gross income or an asset test, but nonetheless maintain our qualification as a REIT because the requirements of certain relief provisions are satisfied, we will be required to pay a penalty of $50,000 for each such failure.

We may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to meet record keeping requirements intended to monitor our compliance with rules relating to the composition of a REIT’s stockholders, as described below in “—Requirements for Qualification—General.”

A 100% tax may be imposed with respect to items of income and expense if arrangements among us, our taxable REIT subsidiary and our tenants are not based on market rates.

If we acquire appreciated assets from a “C corporation” in a transaction in which the adjusted tax basis of the assets in our hands is determined by reference to the adjusted tax basis of the assets in the hands of the “C corporation,” we may be subject to tax at the highest corporate income tax rate on the gain that we recognize from the disposition of the asset acquired from the “C corporation” in a carry-over basis transaction to the extent of the “built-in gain” in the asset. “Built-in gain” is the amount by which an asset’s fair market value exceeds its adjusted tax basis at the time we acquire the asset. In general, this tax applies for a period of 10 years beginning with the day the property of a “C corporation” is transferred to us in a carry-over basis transaction, or the recognition period.

Our taxable REIT subsidiary will be subject to federal corporate income tax.

In addition, notwithstanding our qualification as a REIT, we and our subsidiaries may be subject to a variety of taxes, including payroll taxes and state, local, and foreign income, property, and other taxes on their assets and operations. We could also be subject to tax in situations and on transactions not presently contemplated.

Requirements for Qualification—General

The Code defines a REIT as a corporation, trust or association:

1. that is managed by one or more trustees or directors;

2. the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest;

3. that would be taxable as a domestic corporation but for the special Code provisions applicable to REITs;

4. that is neither a financial institution nor an insurance company subject to specific provisions of the Code;

5. the beneficial ownership of which is held by 100 or more persons;

6. in which, during the last half of each taxable year, not more than 50% in value of the outstanding stock is owned, directly or indirectly, by five or fewer “individuals” (as defined in the Code to include specified tax-exempt entities and as determined by applying certain attribution rules);

7. that makes an election to be taxable as a REIT, or has made this election for a previous taxable year which has not been revoked or terminated, and satisfies all relevant filing and other administrative requirements established by the IRS that must be met to elect and maintain REIT status;

231

8. that uses a calendar year for federal income tax purposes; and

9. that meets other applicable tests, described below, including with respect to the nature of its income and assets and the amount of its distributions.

The Code provides that conditions (1) through (4) must be met during the entire taxable year, and that condition (5) must be met during at least 335 days of a taxable year of 12 months, or during a proportionate part of a shorter taxable year. Conditions (5) and (6) need not be satisfied during a corporation’s initial tax year as a REIT (which, in our case, will be 2013). Our charter provides restrictions regarding the ownership and transfers of our stock, which are intended to assist us in satisfying the stock ownership requirements described in conditions (5) and (6) above. For purposes of determining stock ownership under condition (6) above, a supplemental unemployment compensation benefit plan, a private foundation or a portion of a trust permanently set aside or used exclusively for charitable purposes generally is considered an individual. However, a trust that is a qualified trust under Code Section 401(a) generally is not considered an individual, and beneficiaries of a qualified trust are treated as holding stock of a REIT in proportion to their actuarial interests in the trust for purposes of condition (6) above.

To monitor compliance with the stock ownership requirements, we generally are required to maintain records regarding the actual ownership of our shares. To do so, we must demand written statements each year from the record holders of significant percentages of our stock in which the record holders are to disclose the actual owners of the shares, i.e., the persons required to include in gross income the dividends paid by us. A list of those persons failing or refusing to comply with this demand must be maintained as part of our records. Failure to comply with these record keeping requirements could subject us to monetary penalties. A stockholder that fails or refuses to comply with the demand is required by Treasury regulations to submit a statement with its tax return disclosing the actual ownership of the shares and other information.

In addition, a corporation generally may not elect to become a REIT unless its taxable year is the calendar year. We intend to adopt December 31 as our year-end and thereby satisfy this requirement.

If we fail to satisfy any of the various REIT requirements and could not avail ourselves of any statutory relief provisions, we would not qualify as a REIT. See “—Failure to Qualify.”

Effect of Subsidiary Entities

Ownership of Partnership Interests. A REIT that is a partner in a partnership or other entity taxable as a partnership for federal income tax purposes, such as our operating partnership, Treasury regulations provide that the REIT is deemed to own its proportionate share of the partnership’s assets (subject to special rules relating to the 10% asset test described below) and to earn its proportionate share of the partnership’s income for purposes of the asset and gross income tests applicable to REITs, as described below. Similarly, the assets and gross income of the partnership are deemed to retain the same character in the hands of the REIT. Thus, our proportionate share of the assets, liabilities, and items of income in our operating partnership will be treated as our assets, liabilities, and items of income for purposes of applying the REIT requirements described below. A summary of certain rules governing the federal income taxation of partnerships and their partners is provided below in “—Tax Aspects of Investments in the Operating Partnership.”

We generally have control of our operating partnership and the subsidiary partnerships and limited liability companies, and intend to operate them in a manner consistent with the requirements for our qualification as a REIT. If we become a limited partner or non-managing member in any partnership or limited liability company and such entity takes or expects to take actions that could jeopardize our status as a REIT or require us to pay tax, we may be forced to dispose of our interest in

232

such entity. In addition, it is possible that a partnership or limited liability company could take an action that could cause us to fail a gross income or asset test, and that we would not become aware of such action in time for us to dispose of our interest in the partnership or limited liability company or take other corrective action on a timely basis. In that case, we could fail to qualify as a REIT unless we were entitled to relief as described below in “—Failure to Qualify.”

Qualified REIT Subsidiaries . If a REIT owns a qualified REIT subsidiary, the separate existence of that subsidiary will be disregarded for federal income tax purposes and all assets, liabilities and items of income, deduction and credit of the subsidiary will be treated as assets, liabilities and tax items of the REIT itself. Generally, a corporation will qualify as a qualified REIT subsidiary if we own 100% of its shares and it is not a taxable REIT subsidiary. For this reason, references in this discussion to our income and assets should be understood to include the income and assets of any qualified REIT subsidiary we own. Income of a qualified REIT subsidiary will not be subject to federal income tax, although it may be subject to state and local taxation in some states. Our ownership of the voting shares of a qualified REIT subsidiary will not violate the asset test restrictions against ownership of securities of any one issuer which constitute more than 10% of the voting power or value of such issuer’s securities or more than 5% of the value of our total assets. See “—Asset Tests” and “—Income Tests.”

Taxable REIT Subsidiaries. A taxable REIT subsidiary is a corporation other than a REIT in which we directly or indirectly hold stock, and which has made a joint election with us to be treated as a taxable REIT subsidiary under Section 856(l) of the Code. A taxable REIT subsidiary also includes any corporation other than a REIT in which a taxable REIT subsidiary of ours owns, directly or indirectly, securities (other than certain “straight debt” securities) which represent more than 35% of the total voting power or value of the outstanding securities of such corporation. Other than some activities relating to lodging and health care facilities, a taxable REIT subsidiary generally may engage in any business, including the provision of customary or non-customary services to our tenants without causing us to receive impermissible tenant service income under the REIT gross income tests. A taxable REIT subsidiary is required to pay regular federal income tax, and state and local income tax where applicable, as a non-REIT “C” corporation. If dividends are paid to us by our taxable REIT subsidiary, then a portion of the dividends we distribute to stockholders who are taxed at individual rates generally will be eligible for taxation at lower capital gains rates, rather than at ordinary income rates. See “—Taxation of Holders of Stock —Taxation of Taxable U.S. Stockholders—Qualified Dividend Income.” We currently have one taxable REIT subsidiary, Quality Technology Services Holding, LLC. Quality Technology Services Holding, LLC provides our Cloud and Managed Services, or C3, product, which is a virtual hosting solution offering a private, highly secure, regulatory compliant and scalable IT infrastructure and services to support varied business applications and requirements. Services provided in connection with our C3 product includes a managed network, security, systems and back-up, as well as application monitoring and testing.

Generally, a taxable REIT subsidiary can perform impermissible tenant services without causing us to receive impermissible tenant services income under the REIT income tests. However, several provisions applicable to the arrangements between us and our taxable REIT subsidiary ensure that a taxable REIT subsidiary will be subject to an appropriate level of federal income taxation. For example, a taxable REIT subsidiary is limited in its ability to deduct interest payments in excess of a certain amount made directly or indirectly to us. In addition, we will be obligated to pay a 100% penalty tax on some payments we receive or on certain expenses deducted by the taxable REIT subsidiary if the economic arrangements between us, our tenants, and the taxable REIT subsidiary are not comparable to similar arrangements among unrelated parties. Our taxable REIT subsidiary, and any future taxable REIT subsidiaries, may make interest and other payments to us and to third parties in connection with activities related to our data centers. There can be no assurance that our taxable REIT subsidiary will not be limited in its ability to deduct certain interest payments made to us. In addition, there can be no

233

assurance that the IRS might not seek to impose the 100% excise tax on a portion of payments received by us from, or expenses deducted by, our taxable REIT subsidiary.

Income Tests

In order to qualify as a REIT, we must satisfy two gross income requirements on an annual basis.

At least 75% of our gross income for each taxable year must be derived directly or indirectly from investments relating to real property or mortgages on real property, including:

(1) “rents from real property”;

(2) interest on obligations secured by mortgages on real property or on interests in real property;

(3) gain from the sale or other disposition of real property (including interests in real property and interests in mortgages on real property) which is not treated as inventory property or property held for sale to customers in the ordinary course of business;

(4) dividends or other distributions on, and gain from the sale or other disposition of, transferable shares (or transferable certificates of beneficial interest) in other REITs;

(5) abatements and refunds of taxes on real property;

(6) income and gain derived from foreclosure property;

(7) amounts (other than amounts determined in whole or in part on the income or profits of any person) received or accrued as consideration for entering into agreements (i) to make loans secured by mortgages on real property or on interests in real property or (ii) to purchase or lease real property (including interests in real property an interests in real property);

(8) gain from the sale or disposition of a real estate asset which is not a “prohibited transaction,” see “—Prohibited Transactions Tax;” and

(9) certain income derived from the temporary investment of new capital.

At least 95% of our gross income for each taxable year must be derived from any combination of income qualifying under the 75% test, dividends, interest, and gain from the sale or disposition of stock or securities, in either case, not held for sale to customers.

The following items of income and gain are excluded from the computation of these gross income tests: (1) gross income from “prohibited transactions;” (2) income from, and gain from the sale or disposition of, certain hedging transactions (as discussed below); and (iii) certain foreign currency income.

The IRS has regulatory authority to determine whether any item of income, which is not otherwise described as qualifying income under the 95% and 75% gross income tests, may be treated as qualifying income for purposes of such tests or be excluded therefrom.

Rents from Real Property. Rents received by us will qualify as “rents from real property” in satisfying the gross income requirements described above only if several conditions are met. These conditions relate to the identity of the tenant, the computation of the rent payable, and the nature of the property lease.

First, the amount of rent must not be based in whole or in part on the income or profits of any person. However, an amount received or accrued generally will not be excluded from the term

234

“rents from real property” solely by reason of being based on a fixed percentage or percentages of receipts or sales.

Second, we, or an actual or constructive owner of 10% or more of our common stock, must not actually or constructively own 10% or more of the interests in the tenant, or, if the tenant is a corporation, 10% or more of the voting power or value of all classes of stock of the tenant. Rents received from such tenant that is a taxable REIT subsidiary, however, will not be excluded from the definition of “rents from real property” as a result of this condition if either (i) at least 90% of the space at the property to which the rents relate is leased to third parties, and the rents paid by the taxable REIT subsidiary are comparable to rents paid by our other tenants for comparable space, or (ii) the property is a qualified lodging or qualified health facility and such property is operated on behalf of the taxable REIT subsidiary by a person who is an “eligible independent contractor” (as described below) and certain other requirements are met.

Third, rent attributable to personal property, leased in connection with a lease of real property, must not be greater than 15% of the total rent received under the lease. If this requirement is not met, then the portion of rent attributable to such personal property will not qualify as “rents from real property.”

Fourth, for rents to qualify as rents from real property for purposes of satisfying the gross income tests, we generally must not operate or manage a property or furnish or render services to the tenants at the property, other than through an “independent contractor” who is adequately compensated and from whom we derive no revenue or through a taxable REIT subsidiary. To the extent that “impermissible services” are provided by an independent contractor, the cost of the services generally must be borne by the independent contractor. We may provide a minimal amount of “non-customary” services to tenants of our data centers, other than through an independent contractor or taxable REIT subsidiary, but we intend that our income from these services will not exceed 1% of our total gross income from the facility. If the impermissible tenant services income exceeds 1% of our total gross income from a data center, then all of the income from that data center will fail to qualify as rents from real property. If the total amount of impermissible tenant services income does not exceed 1% of our total gross income from the data center, the services will not “taint” the other income from the data center (that is, it will not cause the rent paid by tenants of that data center to fail to qualify as rents from real property), but the impermissible tenant services income will not qualify as rents from real property. We are deemed to have received income from the provision of impermissible services in an amount equal to at least 150% of our direct cost of providing the services.

A significant portion of the value of our data centers is attributable to structural components related to the provision of electricity, heating ventilation and air conditioning, regulation of humidity, security and fire protection, and telecommunications infrastructure. We believe that our structural components are treated as real property for purposes of the REIT gross income tests, and we intend to structure the provision of services in a manner that does not prevent our rental income from qualifying as “rents from real property.” However, we cannot provide any assurance that the IRS would agree with these positions.

We currently monitor and we intend to continue to the activities provided at our data centers, and the income that is non-qualifying under the REIT income tests arising from our data centers, and we will not provide services that will cause us to fail to meet the income tests. As discussed above, we, through our taxable REIT subsidiary, provide our C3 product. We also provide some managed services and access to third-party service providers at some or all of our data centers. Managed Services include managed network, security, systems and back-up, as well as application monitoring and testing. The following ordinary, necessary, usual and customary services typically are provided in

235

connection with the operation and maintenance of our data center properties. We do not believe that these services constitute personal services rendered to a particular tenant. Our services include:

utilities, including heat, light, gas, electricity, water, air conditioning, ventilation and other utility services;

humidity through the air supply ducts to maintain the tenant’s spaces at all times within a specified humidity range;

security, including a controlled single point of access to the building that is manned twenty-four hours a day, seven days a week by employees, locked cabinets, cages, or suites accessible as specified by each tenant;

fire protection services through fire alarms and sprinklers;

common area maintenance including cleaning and maintenance of public and common areas, landscaping, and pest control;

management, operation, maintenance, and repair of the major building systems and components of the data center buildings;

acceptance of tenant deliveries to a common receiving area when a tenant representative is not present (we do not provide move-in or move-out services with respect to the tenants’ equipment, except to supervise the set-up and installation to ensure compliance with building codes and uninterrupted operation of the data center);

parking for tenants and their visitors, including reserved and unreserved parking without the use of attendants;

telecommunications infrastructure to allow tenants to connect with third-party telecommunications providers; and

Internet access bandwidth for those tenants that do not prefer to engage a telecommunications carrier separately in connection with their lease of space in the data center.

Based upon our experience in the markets where the data centers are located, we believe that all access to service providers and services provided to tenants by us (other than through a qualified independent contractor or a taxable REIT subsidiary) either are usually or customarily rendered in connection with the rental of real property and not otherwise considered rendered to the occupant, or, if considered impermissible services, will not result in an amount of impermissible tenant service income that will cause us to fail to meet the income test requirements. However, we cannot provide any assurance that the IRS would agree with these positions.

We are in the process of requesting a private letter ruling from the IRS in order to determine whether or not certain revenue derived from the operation of our data centers will qualify as “rents from real property” under Section 856(d). Specifically, we are requesting rulings on the following:

1. Providing “interconnection” and “cross connect” capabilities and the receipt of revenues with respect to those services will not cause any amounts received from tenants of the data center properties to be treated as other than “rents from real property” under Section 856(d) for purposes of Sections 856(c)(2)(C) and 856(c)(3)(A).

2. Revenues from tenants for the right to store their data at the data center properties on our servers (which we refer to as “cloud” storage) constitutes “rents from real property” for the purposes of Sections 856(c)(2)(C) and 856(c)(3)(A), subject to Section 856(d)(1)(C).

No assurance can be given that the IRS will conclude that revenues with respect to any of our “interconnection” or “cross connect” capabilities or “cloud” storage should be treated as “rents from real

236

property” under the Code. If the IRS does not conclude that these revenues should be treated as “rents from real property” under the Code, then we will continue to conduct these operations through our taxable REIT subsidiary, and income earned by the taxable REIT subsidiary in connection with these operations will continue to be subject to federal, state and local income tax.

We may receive distributions from taxable REIT subsidiaries or other corporations that are not REITs or qualified REIT subsidiaries. These distributions will be classified as dividend income to the extent of the earnings and profits of the distributing corporation. Such distributions will generally constitute qualifying income for purposes of the 95% gross income test, but not under the 75% gross income test. We do not anticipate that we will receive sufficient dividends from our taxable REIT subsidiary or other such corporations to cause us to exceed the limit on non-qualifying income under the 75% gross income test. Any dividends received by us from a REIT will be qualifying income for purposes of both the 95% and 75% income tests.

If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may nevertheless qualify as a REIT for the year if we are entitled to relief under certain provisions of the Code. Generally, we may avail ourselves of the relief provisions if:

our failure to meet these tests was due to reasonable cause and not due to willful neglect; and

we attach a schedule of the sources of our income to our federal income tax return.

It is not possible, however, to state whether in all circumstances we would be entitled to the benefit of these relief provisions. For example, if we fail to satisfy the gross income tests because we intentionally accrue or receive income that is non-qualifying for purposes of the REIT income tests and that exceeds the limits on non-qualifying income, the IRS could conclude that our failure to satisfy the tests was not due to reasonable cause. If these relief provisions do not apply to a particular set of circumstances, we will not qualify as a REIT. As discussed above under “—Taxation of REITs in General,” even where these relief provisions apply and we retain our REIT status, a tax would be imposed based upon the amount by which we fail to satisfy the particular gross income test. We intend to take advantage of any and all relief provisions that are available to us to cure any violation of the income tests applicable to REITs.

Income from Foreclosure Property. If a REIT acquires real property and personal property incident to such real property through a foreclosure or similar process following a default on a lease of such property or a default on indebtedness owed to the REIT that is secured by the property, and if the REIT makes a timely election to treat such property as “foreclosure property” under applicable provisions of the Code, net income (including any foreign currency gain) the REIT realizes from such property generally will be subject to tax at the maximum federal corporate income tax rate, regardless of whether the REIT distributes such income to its stockholders currently. However, such income will nonetheless qualify for purposes of the 75% and 95% gross income tests even if it would not otherwise be qualifying income for such purposes in the absence of the foreclosure property election.

Interest. “Interest” generally will be non-qualifying income for purposes of the 75% and 95% gross income tests if it depends in whole or in part on the income or profits of any person. However, interest based upon a fixed percentage or percentages of receipts or sales may still qualify under the 75% and 95% gross income tests. We may receive interest payments from our taxable REIT subsidiary. These amounts of interest are qualifying income for purposes of the 95% gross income test but not necessarily the 75% gross income test. We do not anticipate that the amounts of interest derived from our taxable REIT subsidiary would affect our ability to continue to satisfy the 75% gross income test.

237

Dividends. We may receive dividends from our taxable REIT subsidiary, and we could realize capital gain with respect to our investments in our taxable REIT subsidiary (either due to distributions received from the taxable REIT subsidiary or upon a disposition of part or all of our interest in a taxable REIT subsidiary). Our share of any dividends received from our taxable REIT subsidiary or capital gain recognized with respect thereto should qualify for purposes of the 95% gross income test but not for purposes of the 75% gross income test. We do not anticipate that the amounts of dividends from our taxable REIT subsidiary and/or capital gain with respect to our taxable REIT subsidiary will affect our ability to continue to satisfy the 75% gross income test.

Hedging Transactions. From time-to-time, we may enter into transactions to hedge against interest rate risks or value fluctuations associated with one or more of our assets or liabilities. These hedging activities may include entering into interest rate swaps, caps, and floors, options to purchase these items, futures and forward contracts and other financial instruments. To the extent that a REIT enters into a transaction in the normal course of its business primarily to manage the risk of interest rate changes, price changes or currency fluctuations with respect to indebtedness incurred or to be incurred by the REIT to acquire or carry real estate assets, any income or gain from the hedging transaction will be excluded from gross income for purposes of the 75% and 95% gross income tests provided that the REIT clearly and timely identifies such hedging transaction in the manner required under the Code and the Treasury Regulations promulgated thereunder (a “qualifying hedging transaction”). Income of a REIT arising from hedging transactions that are entered into to manage the risk of currency fluctuations will not be treated as qualifying income for purposes of the 75% or 95% gross income test, provided the REIT clearly identifies the transaction as such before the close of the day on which it was acquired, originated, or entered into (or such other time as set forth in Treasury Regulations) (a “qualifying foreign currency transaction”). We currently intend to structure any hedging transactions in a manner that does not jeopardize our REIT status, although this determination depends on an analysis of the facts and circumstances concerning each hedging transaction.

Foreign Currency Gains. “Real estate foreign exchange gain” is excluded from the calculation of the 75% and 95% gross income tests and other “passive foreign exchange gain” is excluded from the calculation of the 95% gross income test. “Real estate foreign exchange gain” means (i) foreign currency gain attributable (without duplication) to (A) an item of income or gain to which the 75% gross income test applies, (B) the acquisition or ownership of obligations secured by mortgages on real property or on interests in real property, or (C) becoming or being the obligor under obligations secured by mortgages on real property or interests in real property, or (ii) foreign currency gain attributable to a “qualified business unit” or “QBU” of the REIT under Code Section 987, provided the QBU itself satisfies both the 75% gross income test and the 75% asset test described below under “—Asset Tests.” “Passive foreign exchange gain” is (without duplication) real estate foreign exchange gain, foreign currency gain attributable to an item of income or gain to which the 95% gross income test applies, foreign currency gain attributable to the acquisition or ownership of obligations, or foreign currency gain attributable to becoming or being the obligor under obligations.

Temporary Investment Income. For purposes of the 75% gross income test, temporary investment income generally constitutes qualifying income if such income is earned as a result of investing new capital raised through the issuance of our common stock or certain long-term debt obligations in stock and debt obligations, but only during the one-year period beginning on the date we receive the new capital.

Failure to Satisfy the Income Tests. We expect to have gross income from various sources, including the sources described in the preceding paragraphs, that will not constitute qualifying income for purposes of one or both of the gross income tests. Taking into account our sources of non-qualifying income, however, we expect that our aggregate gross income will satisfy the 75% and 95% gross income tests applicable to REITs for each taxable year commencing with our first taxable year as a REIT.

238

If we were to fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may nevertheless qualify as a REIT for such year if we were entitled to relief under certain provisions of the Code. These relief provisions generally would be available if our failure to meet such tests were due to reasonable cause and not due to willful neglect, and, following identification of the failure, we filed with the IRS a schedule describing each item of its gross income qualifying under one or more of the gross income tests. It is not possible, however, to state whether in all circumstances we would be entitled to the benefit of these relief provisions. If these relief provisions were inapplicable to a particular set of circumstances involving us we would not qualify as a REIT. As discussed above under “—Taxation of REITs in General,” even if these relief provisions were to apply, a tax based on the amount of the relevant REIT’s non-qualifying income would be imposed.

Prohibited Transactions Tax. Any gain realized by us on the sale of any property held as inventory or other property held primarily for sale to customers in the ordinary course of business, including our share of any such gain realized by our operating partnership or any other subsidiary partnership and taking into account any related foreign currency gains or losses, will be treated as income from a “prohibited transaction” that is subject to a 100% penalty tax. Whether property is held as inventory or primarily for sale to customers in the ordinary course of a trade or business is a question of fact that depends upon all the facts and circumstances with respect to the particular transaction. However, we will not be treated as a dealer in real property for the purpose of the 100% penalty tax if: (i) we have held the property for at least two years and for the production of rental income (unless such property was acquired through foreclosure or deed in lieu of foreclosure or lease termination); (ii) capitalized expenditures on the property in the two years preceding the year of sale are less than 30% of the net selling price of the property; (iii) we either (a) have seven or fewer sales of property (excluding sales of foreclosure property or in connection with an involuntary conversion (“excluded sales”)) for the year of sale or (b) the aggregate tax basis of property sold (other than excluded sales) during the year of sale is 10% or less of the aggregate tax basis of all of our assets as of the beginning of the taxable year, or (c) the fair market value of property sold (other than excluded sales) during the year of sale is less than 10% of the fair market value of all of our assets as of the beginning of the taxable year; and (iv) if the requirement described in clause (iii)(a) of this paragraph is not satisfied, substantially all of the marketing and development expenditures with respect to the property sold are made through an independent contractor from whom we derive no income. The sale of more than one property to one buyer as part of one transaction constitutes one sale.

We hold data centers for investment with a view to long-term appreciation, we engage in the business of acquiring and owning data centers, and we currently intend to make sales of data centers with our investment objectives. However, some of our sales may not satisfy the “safe harbor” requirements described above and there can be no assurance that the IRS might not contend that one or more of these sales is subject to the 100% penalty tax.

Asset Tests

At the close of each calendar quarter, we must satisfy six tests relating to the nature of our assets.

(1) At least 75% of the value of our total assets must be represented by “real estate assets,” cash, cash items, foreign currency that meets certain requirements under the Code, and government securities. Real estate assets include interests in real property, mortgages secured by real estate assets, shares of other REITs, and stock or debt instruments held for less than one year purchased with the proceeds of an offering of shares or certain long-term debt obligations.

(2) Not more than 25% of our total assets may be represented by securities, other than those described in (1) above.

(3) Except for securities described in (1) above and securities of TRSs or QRSs, the value of any one issuer’s securities owned by us may not exceed 5% of the value of our total assets.

239

(4) Except for securities described in (1) above and securities of TRSs or QRSs, we may not own more than 10% of any one issuer’s outstanding voting securities.

(5) Except for securities described in (1) above, securities of TRSs or QRSs, and certain types of indebtedness that are not treated as securities for purposes of this test, as discussed below, we may not own more than 10% of the total value of the outstanding securities of any one issuer.

(6) Not more than 25% of the value of our total assets may be represented by the securities of one or more TRSs.

Each of our assets for purposes of these tests includes our allocable share of all assets held by the entities in which we own an interest that are partnerships or disregarded entities for federal income tax purposes, and the subsidiaries of these entities that are partnerships or disregarded entities for federal income tax purposes, and generally do not include the equity interests in these entities. For purposes of the asset tests other than the 10% value test, an allocable share of the assets of an entity that is treated as a partnership for federal income tax purposes is determined in accordance with the capital interests in that entity. For purposes of the 10% value test, an allocable share of the assets of an entity that is treated as a partnership for federal income tax purposes is determined in accordance with our proportionate ownership of the equity interests and the other securities issued by that entity, other than certain securities specified in the Code.

Securities, for purposes of the asset tests, may include debt a REIT holds from other issuers. However, the Code specifically provides that the following types of debt will not be taken into account as securities for purposes of the 10% value test: (1) securities that meet the “straight debt” safe harbor, as discussed in the next paragraph; (2) loans to individuals or estates; (3) obligations to pay rents from real property; (4) rental agreements described in Section 467 of the Code (other than such agreements with related party tenants); (5) securities issued by other REITs; (6) debt issued by partnerships (other than straight debt or other excluded securities) that derive at least 75% of their gross income from sources that constitute qualifying income for purposes of the 75% gross income test; (7) any debt not otherwise described in this paragraph that is issued by a partnership, but only to the extent of the REIT’s interest as a partner in the partnership; (8) certain securities issued by a state, the District of Columbia, a foreign government, or a political subdivision of any of the foregoing, or the Commonwealth of Puerto Rico; and (9) any other arrangement determined by the IRS.

Debt will meet the “straight debt” safe harbor if (1) neither the REIT nor any of its controlled TRSs (i.e., TRSs in which the REIT directly or indirectly owns more than 50% of the vote or value of the outstanding stock) owns any securities not described in the preceding paragraph that have an aggregate value greater than one percent of the issuer’s outstanding securities, as calculated under the Code, (2) the debt is a written unconditional promise to pay on demand or on a specified date a sum certain in money, (3) the debt is not convertible, directly or indirectly, into stock, and (4) the interest rate and the interest payment dates of the debt are not contingent on the profits, the borrower’s discretion or similar factors other than certain contingencies relating to the timing and amount of principal and interest payments, as described in the Code. Specifically, contingencies regarding time of payment and interest are permissible for purposes of qualifying as a straight debt security if either (1) such contingency does not have the effect of changing the effective yield to maturity, as determined under the Code, other than a change in the annual yield to maturity that does not exceed the greater of (i) 5% of the annual yield to maturity or (ii) 0.25%, or (2) neither the aggregate issue price nor the aggregate face amount of the issuer’s debt instruments held by the REIT exceeds $1,000,000 and not more than 12 months of unaccrued interest can be required to be prepaid thereunder. In addition, debt will not be disqualified from being treated as “straight debt” solely because the time or amount of payment is subject to a contingency upon a default or the exercise of a prepayment right by the issuer of the debt, provided that such contingency is consistent with customary commercial practice.

240

We intend to comply with the asset tests and securities limitations for each relevant calendar quarter. There can be no assurance, however, that the IRS might not contend that the value of any of the securities owned by us on a relevant testing date has resulted in a violation of one or more of the value limitations.

Our operating partnership owns 100% of the interests of Quality Technology Services Holding, LLC. We are considered to own our pro rata share (based on our ownership in the operating partnership) of the interests in Quality Technology Services Holding, LLC equal to our pro-rata ownership of the operating partnership because we own interests in our operating partnership. Quality Technology Services Holding, LLC has elected, together with us, to be treated as our taxable REIT subsidiary. So long as Quality Technology Services Holding, LLC qualifies as a taxable REIT subsidiary, we will not be subject to the 5% asset test, 10% voting securities limitation or 10% value limitation with respect to our ownership interest. We may acquire securities in other taxable REIT subsidiaries in the future. We believe that the aggregate value of our interest in our taxable REIT subsidiary will not exceed 25% of the aggregate value of our gross assets. We intend to limit our ownership of any securities in an issuer that does not qualify as a qualified REIT subsidiary, REIT or a taxable REIT subsidiary so that our ownership of any such securities complies with the 10% voting securities limitation and 10% value limitation. However, we cannot assure you that the IRS will not contend that our assets or our interests in any securities violate the REIT asset requirements.

After initially meeting the asset tests at the close of any quarter, a REIT will not lose its qualification as a REIT for failure to satisfy the asset tests at the end of a later quarter solely by reason of changes in the relative values of its assets (including a change caused solely by the change in the foreign currency exchange rate used to value a foreign asset). If the failure to satisfy the asset tests results from an acquisition of securities or other property during a quarter, the failure can be cured by the disposition of sufficient non-qualifying assets within 30 days after the close of that quarter. An example of such an acquisition would be an increase in our interest in our operating partnership as a result of the exercise of OP units or an additional capital contribution of proceeds from an offering of capital stock by us.

Furthermore, the failure to satisfy the asset tests can be remedied even after the 30-day cure period. If the total value of the assets that caused a failure of the 5% test, the 10% voting securities test or the 10% value test does not exceed the lesser of 1% of the REIT’s assets at the end of the relevant quarter and $10,000,000, a REIT can cure such a failure by disposing of sufficient assets to cure such a violation within six months following the last day of the quarter in which the REIT first identifies the failure of the asset test. For a violation of any of the asset tests attributable to the ownership of assets the total value of which exceeds the amount described in the preceding sentence, a REIT can avoid disqualification as a REIT if the violation is due to reasonable cause and the REIT disposes of an amount of assets sufficient to cure such violation within the six-month period described in the preceding sentence, pays a tax equal to the greater of $50,000 or the highest corporate income tax rate multiplied by the net income generated by the non-qualifying assets during the period of time that the assets were held as non-qualifying assets, and files a schedule with the IRS that describes the assets that caused us to tax the asset. The applicable Treasury Regulations have yet to be issued. Thus, it is not possible to state with precision under what circumstances we would be entitled to the benefit of these provisions.

We intend to monitor our compliance with the asset tests and take such actions within 30 days after the close of any quarter, to the extent reasonably practicable, as may be required to cure any noncompliance. If we fail to cure noncompliance with the asset tests within such time period, we would cease to qualify as a REIT unless we could avail ourselves of available relief provisions. In certain circumstances, utilization of such provisions could result in us being required to pay an excise or penalty tax, which tax could be significant in amount.

241

Annual Distribution Requirements

In order to qualify as a REIT, we are required to distribute dividends, other than capital gain dividends, to our stockholders in an amount at least equal to:

the sum of: (a) 90% of our “REIT taxable income,” computed without regard to the dividends paid deduction and the REIT’s net capital gain, and (b) 90% of our after tax net income, if any, from foreclosure property; minus

the sum of certain items of non-cash income.

For purposes of this test, non-cash income means income attributable to leveled stepped rents, original issue discount included in our taxable income without the receipt of a corresponding payment, cancellation of indebtedness or a like-kind exchange that is later determined to be taxable.

Dividend distributions generally must be paid in the taxable year to which they relate. Dividends may be paid in the following taxable year in two circumstances. First, dividends may be paid in the following taxable year if declared before we timely file our tax return for such year and if paid on or before the first regular dividend payment date after such declaration. Second, if we declare a dividend in October, November or December of any year with a record date in one of those months and pay the dividend on or before January 31 of the following year, we will be treated as having paid the dividend on December 31 of the year in which the dividend was declared. We currently intend to make timely distributions sufficient to satisfy these annual distribution requirements. In this regard, our operating partnership’s partnership agreement authorizes us, as general partner, to take such steps as may be necessary to cause our operating partnership to distribute to its partners an amount sufficient to permit us to meet these distribution requirements.

In order for distributions to be counted toward satisfying the annual distribution requirement for REITs, and to provide us with a REIT-level tax deduction, the distributions must not be “preferential dividends.” A dividend is not a preferential dividend if the distribution is (1) pro rata among all outstanding shares within a particular class, and (2) in accordance with the preferences among different classes of stock as set forth in our organizational documents.

To the extent that we distribute at least 90%, but less than 100%, of our “REIT taxable income,” as adjusted, we will be subject to tax at ordinary corporate tax rates on the retained portion. We may elect to retain, rather than distribute, our net long-term capital gains and pay tax on such gains. In this case, we could elect to have our stockholders include their proportionate share of such undistributed long-term capital gains in income, and to receive a corresponding credit for their share of the tax paid by us. Stockholders of ours would then increase the adjusted basis of their common stock by the difference between the designated amounts included in their long-term capital gains and the tax deemed paid with respect to their shares. To the extent that a REIT has available net operating losses carried forward from prior tax years, such losses may reduce the amount of distributions that it must make in order to comply with the REIT distribution requirements. Such losses, however, will generally not affect the character, in the hands of stockholders, of any distributions that are actually made by the REIT, which are generally taxable to stockholders to the extent that the REIT has current or accumulated earnings and profits.

If we should fail to distribute during each calendar year at least the sum of (1) 85% of our REIT ordinary income for such year, (2) 95% of our REIT capital gain net income for such year, and (3) any undistributed taxable income from prior periods, we would be subject to a 4% excise tax on the excess of such required distribution over the sum of (a) the amounts actually distributed and (b) the amounts of income retained on which we have paid corporate income tax. We intend to make timely distributions so that we are not subject to the 4% excise tax.

242

It is possible that we, from time to time, may not have sufficient cash to meet the distribution requirements due to timing differences between (1) the actual receipt of cash, including receipt of distributions from our subsidiaries, and (2) our inclusion of items in income for federal income tax purposes. In the event that such timing differences occur, in order to meet the distribution requirements, it might be necessary to arrange for short-term, or possibly long-term, borrowings, or to pay taxable dividends in the form of stock or in-kind distributions of property.

In certain circumstances, we may be able to rectify a failure to meet the distribution requirements for a year by paying “deficiency dividends” to stockholders in a later year, which may be included in our deduction for dividends paid for the earlier year. In we do pay “deficiency dividends,” we may be able to avoid losing our REIT status or being taxed on amounts distributed as deficiency dividends. However, we will be required to pay interest and a penalty based on the amount of any deduction taken for deficiency dividends. We currently do not have any plans, however, to pay a portion of our dividends in stock.

If we were to recognize “built-in-gain” (as defined below) on the disposition of any assets acquired from a “C” corporation in a transaction in which our basis in the assets was determined by reference to the “C” corporation’s basis (for instance, if the assets were acquired in a tax-free reorganization), we would be required to distribute at least 90% of the built-in-gain net of the tax it would pay on such gain. “Built-in-gain” is the excess of (a) the fair market value of the asset (measured at the time of acquisition) over (b) the basis of the asset (measured at the time of acquisition).

Record-Keeping Requirements

We are required to comply with applicable record-keeping requirements. Failure to comply could result in monetary fines.

Failure to Qualify

Specified cure provisions may be available to us in the event we discover a violation of a provision of the Code that would result in our failure to qualify as a REIT. Except with respect to violations of the REIT income tests and asset tests (for which the cure provisions are described above), and provided the violation is due to reasonable cause and not due to willful neglect, these cure provisions generally impose a $50,000 penalty for each violation in lieu of a loss of REIT status. If we fail to qualify for taxation as a REIT in any taxable year, and the relief provisions of the Code do not apply, we would be subject to tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates. Distributions to stockholders in any year in which we are not a REIT would not be deductible by us, nor would they be required to be made. In this situation, to the extent of current and accumulated earnings and profits, all distributions to stockholders that are individuals will generally be taxable at a rate of 20%, and, subject to limitations of the Code, corporate stockholders may be eligible for the dividends received deduction. Unless we are entitled to relief under specific statutory provisions, we would also be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year during which qualification was lost. It is not possible to state whether, in all circumstances, we would be entitled to this statutory relief. We intend to take advantage of any and all relief provisions that are available to us to cure any violation of the requirements applicable to REITs.

Tax Aspects of Investments in our Operating Partnership

General

We hold substantially all of our real estate assets through a single operating partnership that holds pass-through subsidiaries. In general, an entity classified as a partnership (or a disregarded entity) for federal income tax purposes is a “pass-through” entity that is not subject to federal income

243

tax. Rather, partners or members are allocated their proportionate shares of the items of income, gain, loss, deduction, and credit of the entity, and are potentially subject to tax on these items, without regard to whether the partners or members receive a distribution from the entity. Thus, we include in our income our proportionate share of these income items for purposes of the various REIT income tests and in the computation of our REIT taxable income. Moreover, for purposes of the REIT asset tests, we include our proportionate share of the assets held by the operating partnership. Consequently, to the extent that we hold an equity interest in our operating partnership, our operating partnership’s assets and operations may affect our ability to qualify as a REIT.

Entity Classification

Our investment in our operating partnership involves special tax considerations, including the possibility of a challenge by the IRS of the tax status of such partnership. If the IRS were to successfully treat our operating partnership as an association or publicly traded partnership taxable as a corporation for federal income tax purposes, our operating partnership would be subject to an entity-level tax on its income. In such a situation, the character of our assets and items of our gross income would change and could preclude us from satisfying the REIT asset tests or the gross income tests as discussed in “Taxation of QTS Realty Trust, Inc.—Taxation of REITs in General—Asset Tests” and “Taxation of QTS Realty Trust, Inc.—Taxation of REITs in General—Income Tests,” and in turn could prevent us from qualifying as a REIT unless we are eligible for relief from the violation pursuant to relief provisions described above. See “Taxation of QTS Realty Trust, Inc.—Failure to Qualify,” above, for a discussion of the effect of our failure to meet these tests for a taxable year, and of the relief provisions. In addition, any change in the status of the operating partnership for tax purposes could be treated as a taxable event, in which case we could have taxable income that is subject to the REIT distribution requirements without receiving any cash.

A partnership is a “publicly-traded partnership” under Section 7704 of the Code is:

(1) interests in the partnership are traded on an established securities market; or

(2) interests in the partnership are readily tradable on a “secondary market” or the “substantial equivalent” of a secondary market.

We and our operating partnership intend to take the reporting position for federal income tax purposes that our operating partnership is not a publicly-traded partnership. There is a risk, however, that the right of a holder of OP units to redeem the units for shares of common stock could cause OP units to be considered readily tradable on the substantial equivalent of a secondary market. Under the relevant Treasury regulations, interests in a partnership will not be considered readily tradable on a secondary market, or on the substantial equivalent of a secondary market, if the partnership qualifies for specified “safe harbors,” which are based on the specific facts and circumstances relating to the partnership. We believe that our operating partnership will qualify for at least one of these safe harbors at all times in the foreseeable future. Our operating partnership cannot provide any assurance that it will continue to qualify for one of the safe harbors mentioned above.

If our operating partnership is a publicly-traded partnership, it will be taxed as a corporation unless at least 90% of its gross income consists of “qualifying income” under Section 7704 of the Code. Qualifying income is generally real property rents and other types of passive income. We believe that our operating partnership will have sufficient qualifying income so that it would be taxed as a partnership, even if it were a publicly-traded partnership. The income requirements applicable to us in order to qualify as a REIT under the Code and the definition of qualifying income under the publicly-traded partnership rules are very similar. Although differences exist between these two income test, we do not believe that these differences would cause the operating partnership not to satisfy the 90% gross income test applicable to publicly-traded partnerships.

244

Tax Allocations with Respect to the Properties

In general, under the Code and the Treasury regulations, income, gain, loss, and deduction attributable to appreciated or depreciated property that is contributed to a partnership in exchange for an interest in that partnership must be allocated for tax purposes in a manner such that the contributing partner is charged with, or benefits from, the unrealized gain or unrealized loss associated with the property at the time of the contribution. The amount of the unrealized gain or unrealized loss is generally equal to the difference between the fair market value of the contributed property at the time of contribution, and the adjusted tax basis of such property at the time of contribution (a “book-tax difference”). Such allocations are solely made for federal income tax purposes and do not affect other economic or legal arrangements among the partners.

These general rules may apply to a contribution of property by us to our operating partnership. To the extent that the operating partnership acquires appreciated (or depreciated) properties by way of capital contributions from its partners, allocations would need to be made in a manner consistent with these requirements. Where a partner contributes cash to a partnership at a time at which the partnership holds appreciated (or depreciated) property, the Treasury regulations provide for a similar allocation of these items to the other (i.e. non-contributing) partners. These rules may also apply to the contribution by us to our operating partnership of the net cash proceeds received in offerings of our stock. As a result, members, including us, could be allocated greater or lesser amounts of depreciation and taxable income in respect of our operating partnership’s properties than would be the case if all of the operating partnership’s assets (including any contributed assets) had a tax basis equal to their fair market values at the time of any contributions to our operating partnership. This could cause us to recognize taxable income in excess of cash flow from our operating partnership, which might adversely affect our ability to comply with the REIT distribution requirements discussed above.

While our operating partnership uses the “remedial method” under Section 704(c) of the Code with respect to the appreciation that existed with respect to the properties contributed to the operating partnership in 2009, or the 2009 Contribution, we use the “traditional method” under Section 704(c) of the Code with respect to all appreciation with respect to those properties (and all other properties) from the time of the 2009 Contribution to the time of this offering. Our operating partnership will use the “traditional method” with respect to the properties contributed in connection with the formation transactions. As a result of the operating partnership’s use of the “traditional method” with respect to appreciation since 2009, our tax depreciation deductions attributable to those properties may be lower, and gain on sale of such property may be higher, than they would have been if our operating partnership had acquired those properties for cash (or were to use the “remedial method” with respect to appreciation in our properties since 2009). If we receive lower tax depreciation deductions from contributed properties, we would recognize increased taxable income, which could increase the annual distributions that we are required to make under the federal income tax rules applicable to REITs or cause a higher portion of our distributions to be treated as taxable dividend income, instead of a tax-free return of capital or a capital gain. See “U.S. Federal Income Tax Considerations—Taxation of Holders of Stock.”

Taxation of Holders of Stock

Taxation of Taxable U.S. Stockholders

As used in the remainder of this discussion, the term “U.S. holder” means a beneficial owner of ours that is for federal income tax purposes:

1. an individual who is a citizen or resident of the United States;

2. a corporation (or entity treated as a corporation or partnership for United States federal income tax purposes) created or organized in or under the laws of the United States, or any state thereof, or the District of Columbia;

245

3. an estate, the income of which is subject to United States federal income taxation regardless of its source; or

4. a trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have authority to control all substantial decisions of the trust, or (2) it has a valid election in place to be treated as a U.S. person.

Generally, if an entity or arrangement treated as a partnership for federal income tax purposes holds our stock, the treatment of its partners generally will depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our stock, you should consult with your tax advisor regarding the tax consequences of the ownership and disposition of our stock.

A “non-U.S. holder” is a holder, including any partner in a partnership that holds our stock that is not a U.S. holder.

Distributions Generally. So long as we qualify as a REIT, distributions out of our current or accumulated earnings and profits that are not designated as capital gains dividends or “qualified dividend income” will be taxable to our taxable U.S. holders as ordinary income and will not be eligible for the dividends received deduction in the case of U.S. holders that are corporations. For purposes of determining whether distributions to holders of stock are out of current or accumulated earnings and profits, our earnings and profits will be allocated first to any outstanding shares of preferred stock and then to our outstanding shares of common stock.

To the extent that we make distributions in excess of our current and accumulated earnings and profits, these distributions will be treated first as a tax-free return of capital to each U.S. holder. This treatment will reduce the adjusted tax basis that each U.S. holder has in its shares for tax purposes by the amount of the distribution, but not below zero. Distributions in excess of a U.S. holder’s adjusted tax basis in its shares will be taxable as capital gains, provided that the shares have been held as a capital asset, and will be taxable as long-term capital gain if the shares have been held for more than one year. Dividends we declare in October, November, or December of any year and payable to a holder of record on a specified date in any of these months shall be treated as both paid by us and received by the holder on December 31 of that year, provided we actually pay the dividend on or before January 31 of the following calendar year.

Capital Gain Dividends; Retained Net Capital Gain. We may elect to designate distributions of our net capital gain as “capital gain dividends.” Distributions that we properly designate as “capital gain dividends” will be taxable to our taxable U.S. holders as gain from the sale or disposition of a capital asset to the extent that such gain does not exceed our actual net capital gain for the taxable year. Designations made by us will only be effective to the extent that they comply with Revenue Ruling 89-81, which requires that distributions made to different classes of shares be composed proportionately of dividends of a particular type. If we designate any portion of a dividend as a capital gain dividend, a U.S. holder will receive an IRS Form 1099-DIV indicating the amount that will be taxable to the holder as capital gain. Corporate stockholders may be required to treat up to 20% of some capital gain dividends as ordinary income.

Instead of paying capital gain dividends, we may designate all or part of our net capital gain as “undistributed capital gain.” We will be subject to tax at regular corporate rates on any undistributed capital gain. A U.S. holder (a) will include in its income as long-term capital gains its proportionate share of such undistributed capital gain; and (b) will be deemed to have paid its proportionate share of the tax paid by us on such undistributed capital gain and receive a credit or a refund to the extent that the tax paid by us exceeds the U.S. holder’s tax liability on the undistributed capital gain. A U.S. holder will increase the basis in its stock by the difference between the amount of capital gain included in its income and the amount of tax it is deemed to have paid. A U.S. holder that is a corporation will

246

appropriately adjust its earnings and profits for the retained capital gain in accordance with Treasury regulations to be prescribed by the IRS. Our earnings and profits will be adjusted appropriately. A U.S. holder will increase the basis in its stock by the difference between the amount of capital gain included in its income and the amount of tax it is deemed to have paid. Our E&P will be adjusted appropriately.

We will classify portions of any designated capital gain dividend or undistributed capital gain as either:

(1) a long-term capital gain distribution, which would be taxable to non-corporate U.S. stockholders at a maximum rate of 20%, and to U.S. holders that are corporations at a maximum rate of 35%; or

(2) an “unrecaptured Section 1250 gain” distribution, which would be taxable to non-corporate U.S. stockholders at a maximum rate of 25%, to the extent of previously claimed depreciation deductions.

Designations made by us will be effective only to the extent that they comply with Revenue Ruling 89-81, which requires that distributions made to different classes of shares be composed proportionately of dividends of a particular type. If we designate any portion of our net capital gain as undistributed capital gain, a U.S. holder will receive an IRS Form 2439 indicating the total amount of undistributed capital gain, the amount of unrecaptured Section 1250 gain, if any, and the tax paid by us on the undistributed capital gain.

Qualified Dividend Income. We may designate a portion of our distributions paid to U.S. holders as “qualified dividend income.” That portion of a distribution which is properly designated as qualified dividend income is taxable to non-corporate U.S. holders at long-term capital gain rates, provided that the U.S. holder has held the shares with respect to which the distribution is made for more than 60 days during the 121-day period beginning on the date that is 60 days before the date on which such stock became ex-dividend with respect to the relevant distribution. The maximum amount of our distributions eligible to be designated as qualified dividend income for a taxable year is equal to the sum of:

the qualified dividend income received by us during such taxable year from regular corporations (including our taxable REIT subsidiary);

the excess of any “undistributed” REIT taxable income recognized during the immediately preceding year over the federal income tax paid by us with respect to such undistributed REIT taxable income; and

the excess of any income recognized during the immediately preceding year attributable to the sale of a built-in-gain asset that was acquired in a carry-over basis transaction from a regular corporation over the federal income tax paid by us with respect to such built-in gain.

Generally, dividends that we receive will be treated as qualified dividend income for purposes of the first bullet above if (A) the dividends are received from (i) a U.S. corporation (other than a REIT or a regulated investment company), (ii) our taxable REIT subsidiary, or (iii) a “qualified foreign corporation,” and (B) specified holding period requirements and other requirements are met. A foreign corporation (generally excluding a “passive foreign investment company”) will be a qualified foreign corporation if it is incorporated in a possession of the United States, the corporation is eligible for benefits of an income tax treaty with the United States that the Secretary of Treasury determines is satisfactory, or the shares of the foreign corporation on which the dividend is paid is readily tradable on an established securities market in the United States.

If we designate any portion of a dividend as a capital gain dividend or as qualified dividend income, the amount that will be taxable to the U.S. holder as capital gain or as qualified dividend income will be indicated to U.S. holders on IRS Form 1099-DIV.

247

Dispositions of Stock. In general, a U.S. holder will realize gain or loss upon the sale, redemption, or other taxable disposition of our stock in an amount equal to the difference between the sum of the fair market value of any property received and the amount of cash received in such disposition, and the U.S. holder’s adjusted tax basis in the stock at the time of the disposition. In general, a U.S. holder’s tax basis will equal the U.S. holder’s acquisition cost, increased by the excess of net capital gains deemed distributed to the U.S. holder (discussed above), less tax deemed paid on it, and reduced by returns of capital. In general, capital gains recognized by U.S. holders taxed at individual rates upon the sale or disposition of our stock will be subject to a maximum federal income tax rate of 20% if the stock is held for more than 12 months, and will be taxed at ordinary income rates of up to 39.6% if the stock is held for 12 months or less. Gains recognized by U.S. holders that are corporations are subject to federal income tax at a maximum rate of 35%, whether or not classified as long-term capital gains. Capital losses recognized by a U.S. holder upon the disposition of stock held for more than one year at the time of disposition will be considered long-term capital losses, and are generally available only to offset capital gain income of the U.S. holder but not ordinary income (except in the case of individuals, who may offset up to $3,000 of ordinary income each year). In addition, any loss upon a sale or exchange of stock by a U.S. holder who has held the stock for six months or less, after applying holding period rules, will be treated as a long-term capital loss to the extent of distributions received from us that are required to be treated by the U.S. holder as long-term capital gain.

If a U.S. holder recognizes a loss upon a subsequent sale or other disposition of our stock in an amount that exceeds a prescribed threshold, it is possible that the provisions of Treasury regulations involving “reportable transactions” could apply, with a resulting requirement to separately disclose the loss generating transaction to the IRS. While these regulations are directed towards “tax shelters,” they are written broadly and apply to transactions that would not typically be considered tax shelters. In addition significant penalties are imposed by the Code for failure to comply with these requirements. You should consult your tax advisor concerning any possible disclosure obligation with respect to the receipt or disposition of our stock, or transactions that might be undertaken directly or indirectly by us. Moreover, you should be aware that we and other participants in the transactions involving us (including their advisors) might be subject to disclosure or other requirements pursuant to these regulations.

Passive Activity Losses and Investment Interest Limitations. Distributions made by us and gain arising from the sale or exchange by a U.S. holder of our stock will not be treated as passive activity income. As a result, U.S. holders will not be able to apply any “passive losses” against income or gain relating to our stock. Distributions made by us, to the extent they do not constitute return of capital, generally will be treated as investment income for purposes of computing the investment interest limitation.

Medicare Tax. The Health Care and Reconciliation Act of 2010 requires that, in certain circumstances, certain U.S. holders that are individuals, estates, and trusts pay a 3.8% tax on “net investment income,” which includes, among other things, dividends on and gains from the sale or other disposition of stock to the extent the U.S. holder’s adjusted gross income exceeds certain thresholds. Prospective investors should consult their own tax advisors regarding this potential impact of this tax on their individual circumstances.

248

Taxation of Non-U.S. Stockholders

The following is a summary of certain federal income and estate tax consequences of the ownership and disposition of our stock applicable to non-U.S. holders of our stock. The discussion is based on current law and is for general information only. It addresses only selected, and not all, aspects of federal income and estate taxation.

Distributions Generally. As described in the discussion below, distributions paid by us with respect to our common stock will be treated for federal income tax purposes as:

ordinary dividends;

return of capital distributions; or

long-term capital gain.

This discussion assumes that our common stock will be considered regularly traded on an established securities market for purposes of the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA, provisions described below. If our common stock is not regularly traded on an established securities market, the tax considerations described below would materially differ.

Ordinary Income Dividends. Subject to the discussion below, distributions by us to a non-U.S. stockholder generally will be treated as ordinary dividends to the extent that they are made out of our current or accumulated earnings and profits and:

are not attributable to our net capital gain, or

the distribution is attributable to our net capital gain from the sale of “U.S. real property interests,” or USRPIs, and the non-U.S. stockholder owns 5% or less of the value of our common stock at all times during the one-year period ending on the date of distribution.

We generally expect to withhold U.S. income tax at the rate of 30% on any distribution (including distributions that may later be determined to have been made in excess of current and accumulated E&P) made to a non-U.S. holder unless:

a lower treaty rate applies and the non-U.S. holder files an Internal Revenue Service Form W-8BEN with us evidencing eligibility for that reduced rate is filed with us;

the non-U.S. holder files an Internal Revenue Service Form W-8ECI with us claiming that the distribution is income effectively connected with the non-U.S. holder’s trade or business; or

the non-U.S. holder is a foreign sovereign or controlled entity of a foreign sovereign and also provides an IRS Form W-8EXP claiming an exemption from withholding under section 892 of the Code.

Distributions in excess of our current or accumulated earnings and profits that do not exceed the adjusted basis of the non-U.S. holder in its stock will reduce the non-U.S. holder’s adjusted basis in its stock and will not be subject to federal income tax. Distributions in excess of current and accumulated earnings and profits that do exceed the adjusted basis of the non-U.S. holder in its stock will be treated as gain from the sale of its stock, the tax treatment of which is described below. See “—Dispositions of Stock.”

We may be required to withhold at least 10% of any distribution in excess of our current and accumulated earnings and profits, even if a lower treaty rate applies or the non-U.S. holder is not liable for tax on the receipt of that distribution. However, a non-U.S. holder may seek a refund of these amounts from the Internal Revenue Service if the non-U.S. holder’s U.S. tax liability with respect to the distribution is less than the amount withheld.

249

Capital Gain Dividends. A distribution paid by us to a non-U.S. holder will be treated as long-term capital gain if the distribution is paid out of our current or accumulated E&P and:

the distribution is attributable to our net capital gain (other than from the sale of USRPIs) and we timely designate the distribution as a capital gain dividend; or

the distribution is attributable to our net capital gain from the sale of USRPIs and the non-U.S. holder owns more than 5% of the value of our common stock at any point during the one year period ending on the date of distribution.

Distributions to non-U.S. holders that are designated by us at the time of distribution as capital gain dividends generally should not be subject to federal income taxation, unless:

the investment in our stock is effectively connected with the non-U.S. holder’s U.S. trade or business, in which case the non-U.S. holder will be subject to tax on a net basis in a manner similar to the taxation of U.S. holders with respect to such gain, except that a holder that is a foreign corporation may also be subject to the additional 30% branch profits tax; or

the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and either has a “tax home” in the United States or with respect to whom certain other conditions exist, in which case such nonresident alien individual will be subject to a 30% tax on the individual’s capital gain.

Under FIRPTA, distributions that are attributable to net capital gain from the sale by us of USRPIs and paid to a non-U.S. holder that owns more than 5% of the value of our common stock at any time during the taxable year during the one year period ending on the date on which the distribution is paid will be subject to tax as income effectively connected with a U.S. trade or business. The FIRPTA tax will apply to these distributions whether or not the distribution is designated as a capital gain dividend. Such distributions may be subject to a 30% branch profits tax.

With respect to a non-U.S. holder receiving a distribution that is treated as a capital gain dividend or could be treated as a capital gain dividend, we will withhold and remit to the IRS 35% of any distribution to that non-U.S. holders that is either designated as a capital gain dividend, or, if greater, 35% of a distribution that could have been designated as a capital gain dividend. Distributions can be designated as capital gain to the extent of our net capital gain for the taxable year of the distribution. The amount withheld is creditable against the non-U.S. holder’s federal income tax liability or refundable when the non-U.S. holder properly and timely files a tax return with the IRS.

It is not entirely clear whether distributions that are (i) otherwise treated as capital gain dividends, (ii) not attributable to the disposition of a U.S. real property interest, and (iii) paid to non-U.S. holders who own less than 5% of the value of the class of our stock in respect of which the distributions are made at all times during the relevant taxable year, will be treated as (a) long-term capital gain to such non-U.S. holders or as (b) ordinary dividends taxable in the manner described above. If we were to pay a capital gain dividend described in the prior sentence, non-U.S. holders should consult their tax advisers regarding the taxation of such distribution in their particular circumstances.

Retention of Net Capital Gains. Although the law is not clear on the matter, it appears that amounts designated by us as retained capital gains in respect of the stock held by U.S. holders generally should be treated with respect to non-U.S. holders in the same manner as actual distributions by us of capital gain dividends. Under that approach, a non-U.S. holder would be able to offset as a credit against its United States federal income tax liability resulting therefrom, an amount equal to its proportionate share of the tax paid by us on such undistributed capital gains, and to receive from the IRS a refund to the extent its proportionate share of such tax paid by us were to exceed its actual United States federal income tax liability, and the non-U.S holder timely files an appropriate claim for refunds.

250

Dispositions of Stock. Unless our stock constitutes a USRPI, a sale of our stock by a non-U.S. holder generally will not be subject to U.S. taxation under FIRPTA. Generally, with respect to any particular stockholder, our common stock will constitute a USRPI only if each of the following three statements is true:

50% or more of all of our assets throughout a prescribed testing period consist of interests in real property located within the United States, excluding, for this purpose, interests in real property solely in a capacity as a creditor;

We are not a “domestically controlled qualified investment entity.” A domestically controlled qualified investment entity includes a REIT in which, at all times during a specified testing period, less than 50% in value of its shares is held directly or indirectly by non-U.S. holders. We believe that we will be a domestically controlled qualified investment entity and, therefore, that the sale of our stock by a non-U.S. holder would not be subject to taxation under FIRPTA. Because our stock will be publicly traded, however, we cannot guarantee that we will continue to be a domestically controlled qualified investment entity.

Either (1) our common stock is not “regularly traded,” as defined by applicable Treasury regulations, on an “established securities market” in the U.S., or (2) our common stock is “regularly traded” on an “established securities market” in the U.S. and the selling non-U.S. holder has held over 5% of the value of our outstanding common stock at any time during the shorter of the period during which the non-U.S. holder held the stock or the five-year period ending on the date of the sale or exchange. We expect that our common stock will be “regularly traded” on an established securities market.

Specific wash sales rules applicable to sales of REIT stock could result in gain recognition, taxable under FIRPTA, upon the sale of our common stock even if we are a domestically controlled qualified investment entity. These rules would apply if a non-U.S. holder (1) disposes of our common stock within a 30–day period preceding the ex-dividend date of a distribution, any portion of which, but for the disposition, would have been taxable to such non-U.S. holder as gain from the sale or exchange of a USRPI, (2) acquires, or enters into a contract or option to acquire, our common stock during the 61–day period that begins 30 days prior to such ex-dividend date, and (3) if our common stock is “regularly traded” on an “established securities market” in the U.S., such non-U.S. holder has owned more than 5% of our outstanding common stock at any time during the 1-year period ending on the date of such distribution.

If gain on the sale of our stock were subject to taxation under FIRPTA, the non-U.S. holder would be subject to the same treatment as a U.S. holder with respect to such gain, subject to applicable alternative minimum tax and a special alternative minimum tax in the case of non-resident alien individuals, and the purchaser of the stock could be required to withhold 10% of the purchase price and remit such amount to the IRS.

Gain from the sale of our stock that would not otherwise be subject to FIRPTA will nonetheless be taxable in the United States to a non-U.S. holder if: (1) the non-U.S. holder’s investment in our stock is effectively connected with a U.S. trade or business conducted by such non-U.S. holder, in which case the non-U.S. holder will be subject to the same treatment as a U.S. holder with respect to such gain, or (2) the non-U.S. holder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and has a “tax home” in the United States, in which case the nonresident alien individual will be subject to a 30% tax on the individual’s capital gain. In addition, even if we are a domestically controlled qualified investment entity, upon disposition of our stock (subject to the 5% exception applicable to “regularly traded” shares described above), a non-U.S. holder may be treated as having gain from the sale or exchange of a USRPI if the non-U.S. holder (1) disposes of our stock within a 30-day period preceding the ex-dividend date of a distribution, any

251

portion of which, but for the disposition, would have been treated as gain from the sale or exchange of a USRPI and (2) acquires, or enters into a contract or option to acquire, substantially identical stock within 30 days after such ex-dividend date.

Taxation of U.S. Tax-Exempt Stockholders

U.S. tax-exempt entities, including qualified employee pension and profit sharing trusts and individual retirement accounts, generally are exempt from federal income taxation. However, they are subject to taxation on their unrelated business taxable income, or UBTI. Provided that (1) a tax-exempt holder has not held our stock as “debt financed property” within the meaning of the Code (i.e. where the acquisition or holding of the property is financed through a borrowing by the tax-exempt holder), and (2) our stock is not otherwise used in an unrelated trade or business, distributions from us and income from the sale of our stock should not give rise to UBTI to a tax-exempt holder.

Tax-exempt holders that are social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts, and qualified group legal services plans exempt from federal income taxation under sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of the Code, respectively, are subject to different UBTI rules, which generally will require them to characterize distributions from us as UBTI.

In certain circumstances, a pension trust that owns more than 10% of our stock could be required to treat a percentage of the dividends from us as UBTI, if we are a “pension-held REIT.” We will not be a pension-held REIT unless either (1) one pension trust owns more than 25% of the value of our stock, or (2) a group of pension trusts, each individually holding more than 10% of the value of our stock, collectively owns more than 50% of such stock. Certain restrictions on ownership and transfer of our stock should generally prevent a tax-exempt entity from owning more than 10% of the value of our stock, or our becoming a pension-held REIT.

U.S. tax-exempt holders are urged to consult their tax advisors regarding the federal, state, local and foreign tax consequences of owning our stock.

Information Reporting and Backup Withholding Tax Applicable to Stockholders

U.S. Stockholders

In general, information-reporting requirements will apply to payments of distributions on our stock and payments of the proceeds of the sale of our stock to some U.S. holders, unless an exception applies. Further, the payer will be required to withhold backup withholding tax on such payments at the rate of 28% if:

(1) the payee fails to furnish a taxpayer identification number, or TIN, to the payer or to establish an exemption from backup withholding;

(2) the IRS notifies the payer that the TIN furnished by the payee is incorrect;

(3) there has been a notified payee under-reporting with respect to interest, dividends or original issue discount described in Section 3406(c) of the Code; or

(4) there has been a failure of the payee to certify under the penalty of perjury that the payee is not subject to backup withholding under the Code.

Some holders of our stock, including corporations, may be exempt from backup withholding. Any amounts withheld under the backup withholding rules from a payment to a holder will be allowed as a credit against the holder’s United States federal income tax liability and may entitle the holder to a refund, provided that the required information is furnished to the IRS.

252

Withholding on Payments in Respect of Certain Foreign Accounts. As described below, certain future payments made to “foreign financial institutions” and “non-financial foreign entities” may be subject to withholding at a rate of 30%. U.S. stockholders should consult their tax advisors regarding the effect, if any, of this withholding provision on their ownership and disposition of our common stock. See “—Non-U.S. Stockholders—Withholding on Payments to Certain Foreign Entities” below.

Non-U.S. Stockholders. Generally, information reporting will apply to payments of distributions on our stock, and backup withholding described above for a U.S. holder will apply, unless the payee certifies that it is not a United States person or otherwise establishes an exemption.

The payment of the proceeds from the disposition of our stock to or through the United States office of a United States or foreign broker will be subject to information reporting and, possibly, backup withholding as described above for U.S. holders, or the withholding tax for non-U.S. holders, as applicable, unless the non-U.S. holder certifies as to its non-U.S. status or otherwise establishes an exemption, provided that the broker does not have actual knowledge that the holder is a United States person or that the conditions of any other exemption are not, in fact, satisfied. The proceeds of the disposition by a non-U.S. holder of our stock to or through a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, if the broker is a United States person, a controlled foreign corporation for United States tax purposes, or a foreign person 50% or more of whose gross income from all sources for specified periods is from activities that are effectively connected with a United States trade or business, a foreign partnership 50% or more of whose interests are held by partners who are United States persons, or a foreign partnership that is engaged in the conduct of a trade information reporting generally will apply as though the payment was made through a United States office of a United States or foreign broker unless the broker has documentary evidence as to the non-U.S. holder’s foreign status and has no actual knowledge to the contrary.

Applicable Treasury regulations provide presumptions regarding the status of payees when the payee cannot be reliably associated with appropriate documentation provided to the payer. If a non-U.S. holder fails to comply with the information reporting requirement, payments to such person may be subject to the full withholding tax even if such person might have been eligible for a reduced rate or withholding or no withholding under an applicable income tax treaty. Because the application of the Treasury regulations varies depending on the holder’s particular circumstances, you are urged to consult your tax advisor regarding the information reporting requirements applicable to you.

Backup withholding is not an additional tax. Any amounts that we withhold under the backup withholding rules will be refunded or credited against the non-U.S. holder’s federal income tax liability if certain required information is furnished to the IRS. Non-U.S. holders should consult with their own tax advisors regarding application of backup withholding in their particular circumstances and the availability of and procedure for obtaining an exemption from backup withholding under current Treasury regulations.

Withholding on Payments to Certain Foreign Entities. The Foreign Account Tax Compliance provisions of the Hire Act or “FATCA,” which was enacted in 2010, imposes a 30% withholding tax on certain types of payments made to “foreign financial institutions” and certain other non-U.S. entities unless certain due diligence, reporting, withholding, and certification obligation requirements are satisfied.

The Treasury Department and the IRS have issued final regulations under FATCA. As a general matter, FATCA imposes a 30% withholding tax on dividends on, and gross proceeds from the sale or other disposition of, our common stock if paid to a foreign entity unless either (i) the foreign entity is a “foreign financial institution” that undertakes certain due diligence, reporting, withholding, and

253

certification obligations, or in the case of a foreign financial institution that is a resident in a jurisdiction that has entered into an intergovernmental agreement to implement FATCA, the entity complies with the diligence and reporting requirements of such agreement, (ii) the foreign entity is not a “foreign financial institution” and identifies certain of its U.S. investors, or (iii) the foreign entity otherwise is excepted under FATCA. Under delayed effective dates provided for in the regulations and recent administrative guidance, the required withholding would not begin until July 1, 2014 with respect to dividends on our shares, and January 1, 2017 with respect to gross proceeds from a sale or other disposition of our shares.

If withholding is required under FATCA on a payment related to our shares, investors that otherwise would not be subject to withholding (or that otherwise would be entitled to a reduced rate of withholding) generally will be required to seek a refund or credit from the IRS to obtain the benefit of such exemption or reduction (provided that such benefit is available). Prospective investors should consult their tax advisors regarding the effect of FATCA in their particular circumstances.

Other Tax Considerations

Legislative or Other Actions Affecting REITs

The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department. We cannot give you any assurances as to whether, or in what form, any proposals affecting REITs or their stockholders will be enacted. Changes to the federal tax laws and interpretations thereof could adversely affect an investment in our stock.

State, Local and Foreign Taxes

We and our subsidiaries and the holders of our stock may be subject to state, local or foreign taxation in various jurisdictions, including those in which it or they transact business, own property or reside. We own data centers located in a number of jurisdictions, and may be required to file tax returns in some or all of those jurisdictions. The state, local or foreign tax treatment of us and holders of our stock may not conform to the federal income tax treatment discussed above. We will pay foreign property taxes, and dispositions of foreign property or operations involving, or investments in, foreign property may give rise to foreign income or other tax liability in amounts that could be substantial. Any foreign taxes incurred by us do not pass through to stockholders as a credit against their federal income tax liability. Prospective investors should consult their tax advisors regarding the application and effect of state, local and foreign income and other tax laws on an investment in our stock.

254

UNDERWRITING

We, our operating partnership, the Selling Stockholder and the underwriters named below have entered into an underwriting agreement with respect to the shares of our Class A common stock being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares indicated in the following table. Goldman, Sachs & Co. and Jefferies LLC are joint book-running managers and the representatives of the underwriters. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc., KeyBanc Capital Markets Inc. and Morgan Stanley & Co. LLC are joint book-running managers.


Underwriters		Number of Shares
Goldman, Sachs & Co.
Jefferies LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Deutsche Bank Securities Inc.
KeyBanc Capital Markets Inc.
Morgan Stanley & Co. LLC
J.P. Morgan Securities LLC
Stifel, Nicolaus & Company, Incorporated

Total

The underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this option is exercised.

The underwriters have an option to buy up to an additional shares from us and the Selling Stockholder to cover sales by the underwriters of a greater number of shares than the total number set forth in the table above. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.

The following tables show the per share and total underwriting discounts and commissions to be paid to the underwriters by the company and the Selling Stockholder. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares from us and the Selling Stockholder.


Paid by the Company

	No Exercise	Full Exercise
Per Share	$	$
Total	$	$



Paid by the Selling Stockholder

	No Exercise	Full Exercise
Per Share	$	$
Total	$	$

255

Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover page of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $ per share from the initial public offering price. After the initial offering of the shares, the representatives may change the offering price and the other selling terms. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

The 180-day restricted period described in the preceding paragraph will be automatically extended if: (1) during the last 17 days of the 180-day restricted period we issue an earnings release or announce material news or a material event; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 15-day period following the last day of the 180-day period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release of the announcement of the material news or material event.

Prior to the offering, there has been no public market for shares of our Class A common stock. The initial public offering price has been negotiated among us and the representatives. Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and earnings prospects, an assessment of our management and the consideration of the above factors in relation to market valuation of companies in related businesses.

We intend to apply to have our Class A common stock listed on the NYSE under the symbol “QTS.”

In connection with the offering, the underwriters may purchase and sell shares of our common stock in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in this offering, and a short position represents the amount of such sales that have not been covered by subsequent purchases. A “covered short position” is a short position that is not greater than the amount of additional shares for which the underwriters’ option described above may be exercised. The underwriters may cover any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to cover the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the option described above. “Naked” short sales are any short sales that create a short position greater than the amount of additional shares for which the option described above may be exercised. The underwriters must cover any such naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in this offering. Stabilizing transactions consist of various bids for or purchases of common stock made by the underwriters in the open market prior to the completion of this offering.

256

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of our common stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of our common stock. As a result, the market price of our common stock may be higher than the price that otherwise might exist in the open market. The underwriters are not required to engage in these activities and may end any of these activities at any time. These transactions may be effected on the NYSE, in the over-the-counter market or otherwise.

European Economic Area

In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a “relevant member state”), with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the “relevant implementation date”), an offer of shares described in this prospectus may not be made to the public in that relevant member state other than:

to any legal entity which is a qualified investor as defined in the Prospectus Directive;

to fewer than 100 or, if the relevant member state has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant underwriter or underwriters nominated by us for any such offer; or

in any other circumstances falling within Article 3(2) of the Prospectus Directive.

provided that no such offer of shares shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive.

For purposes of this provision, the expression an “offer of shares to the public” in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe for the shares, as the expression may be varied in that member state by any measure implementing the Prospectus Directive in that relevant member state, and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the relevant member state) and includes any relevant implementing measure in the relevant member state. The expression 2010 PD Amending Directive means Directive 2010/73/EU.

Each underwriter has represented and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA would not, if we were not an authorized person, apply to the Issuer; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

257

The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the Financial Instruments and Exchange Law) and each underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission, or ASIC, in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001, or the Corporations Act, and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

Any offer in Australia of the shares may only be made to persons, or the Exempt Investors, who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise

258

pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.

The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.

This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority, or the DFSA. This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The shares to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.

We have not and will not register with the Swiss Financial Market Supervisory Authority, or FINMA, as a foreign collective investment scheme pursuant to Article 119 of the Federal Act on Collective Investment Scheme of 23 June 2006, as amended, or CISA, and accordingly the securities being offered pursuant to this prospectus have not and will not be approved, and may not be licenseable, with FINMA. Therefore, the securities have not been authorized for distribution by FINMA as a foreign collective investment scheme pursuant to Article 119 CISA and the securities offered hereby may not be offered to the public (as this term is defined in Article 3 CISA) in or from Switzerland. The securities may solely be offered to “qualified investors,” as this term is defined in Article 10 CISA, and in the circumstances set out in Article 3 of the Ordinance on Collective Investment Scheme of 22 November 2006, as amended, or CISO, such that there is no public offer. Investors, however, do not benefit from protection under CISA or CISO or supervision by FINMA. This prospectus and any other materials relating to the securities are strictly personal and confidential to each offeree and do not constitute an offer to any other person. This prospectus may only be used by those qualified investors to whom it has been handed out in connection with the offer described herein and may neither directly or indirectly be distributed or made available to any person or entity other than its recipients. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in Switzerland or from Switzerland. This prospectus does not constitute an issue prospectus as that term is understood pursuant to Article 652a and/or 1156 of the Swiss Federal Code of Obligations. We have not applied for a listing of the securities on the SIX Swiss Exchange or any other regulated securities market in Switzerland, and consequently, the information presented in this prospectus does not necessarily comply with the information standards set out in the listing rules of the SIX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange.

The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of shares offered.

259

We and the Selling Stockholder estimate that the total expenses of this offering payable by us and them, excluding underwriting discounts and commissions, will be approximately $ . We will pay the reasonable legal fees and disbursements incident to securing any required review by the Financial Industry Regulatory Authority, Inc., or FINRA, of the terms of the sale of the shares up to $ (excluding filing fees).

We and the Selling Stockholder have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to us and to persons and entities with relationships with us, for which they received or will receive customary fees and expenses. Affiliates of each of the underwriters of this offering are lenders under our unsecured credit facility. Since we intend to use a portion of the net proceeds received by us from this offering to repay amounts outstanding under our unsecured credit facility, these lenders will receive their proportionate shares of any amount of our unsecured credit facility that is repaid with the net proceeds received by us from this offering. The repayments of amounts outstanding under our unsecured revolving credit facility will not affect the commitments of those affiliates of our underwriters to fund future amounts thereunder in accordance with the terms of the facility.

In the ordinary course of their various business activities, the underwriters and their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of ours (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with us. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.

260

LEGAL MATTERS

Certain legal matters in connection with this offering, including the validity of the common stock offered hereby and our certain tax matters, will be passed upon for us by Hogan Lovells US LLP, and certain legal matters in connection with this offering will be passed upon for the underwriters by Sidley Austin LLP.

EXPERTS

The consolidated financial statements of QualityTech, LP at December 31, 2012 and 2011, and for each of the three years in the period ended December 31, 2012, and the related financial statement schedule, appearing in this prospectus and registration statement of QTS Realty Trust, Inc. have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The balance sheet of QTS Realty Trust, Inc. at July 2, 2013 has been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and is included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The statement of revenues and certain operating expenses of the Sacramento Property for the year ended December 31, 2011, appearing in this prospectus and registration statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing. Ernst & Young LLP’s report refers to the fact that the statement of revenue and certain expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and are not intended to be a complete presentation of revenue and expenses.

WHERE YOU CAN FIND MORE INFORMATION

We maintain a website at www.qualitytech.com. Information contained on our website is not incorporated by reference into this prospectus and you should not consider information contained on our website to be part of this prospectus.

We have filed with the SEC a registration statement on Form S-11, including exhibits, schedules and amendments filed with the registration statement, of which this prospectus is a part, under the Securities Act with respect to the common stock we propose to sell in this offering. This prospectus does not contain all of the information set forth in the registration statement and exhibits and schedules to the registration statement. For further information with respect to our Company and the common stock to be sold in this offering, reference is made to the registration statement, including the exhibits and schedules to the registration statement. Statements contained in this prospectus as to the contents of any contract or other document referred to in this prospectus are not necessarily complete and, where that contract or other document has been filed as an exhibit to the registration statement, each statement in this prospectus is qualified in all respects by the exhibit to which the reference relates. Copies of the registration statement, including the exhibits and schedules to the registration statement, may be examined without charge at the public reference room of the SEC, 100 F Street, N.E., Washington, DC 20549. Information about the operation of the public reference room may be obtained by calling the SEC at 1-800-SEC-0300. Copies of all or a portion of the registration statement can be

261

obtained from the public reference room of the SEC upon payment of prescribed fees. In addition, the SEC maintains a website, http://www.sec.gov, that contains reports, proxy and information statements and other information regarding registrants, including us, that file electronically with the SEC.

As a result of this offering, we will become subject to the information and periodic reporting requirements of the Exchange Act and will file periodic reports and other information with the SEC. These periodic reports and other information will be available for inspection and copying at the SEC’s public reference facilities and the website of the SEC referred to above.

262

INDEX TO FINANCIAL STATEMENTS


QTS Realty Trust, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Statements:
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2013 (unaudited)			F-3
Pro Forma Condensed Consolidated Statement of Operations for the three months ended June 30, 2013 (unaudited)			F-4
Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2012 (unaudited)			F-5
Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited)			F-6

Financial Statement:
Report of Independent Registered Public Accounting Firm			F-9
Balance Sheet as of July 2, 2013			F-10
Notes to Financial Statement			F-11

QualityTech, LP
Unaudited Interim Consolidated Financial Statements:
Balance Sheets as of June 30, 2013 (unaudited) and December 31, 2012			F-13
Statements of Operations and Comprehensive Loss (unaudited) for the three months ended June 30, 2013 and 2012			F-14
Statements of Changes in Partners’ Capital (unaudited) for the three months ended June 30, 2013			F-15
Statements of Cash Flows (unaudited) for the three months ended June 30, 2013 and 2012			F-16
Notes to Interim Consolidated Financial Statements (unaudited)			F-17

Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm			F-33
Balance Sheets as of December 31, 2012 and 2011			F-34
Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2012, 2011 and 2010			F-35
Statements of Changes in Partners’ Capital for the years ended December 31, 2012, 2011 and 2010			F-36
Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010			F-37
Notes to Consolidated Financial Statements			F-38
Schedule III—Real Estate Investments as of December 31, 2012			F-59

Sacramento Property
Report of Independent Auditors			F-60
Sacramento Property Statements of Revenues and Certain Operating Expenses			F-61

F-1

QTS REALTY TRUST, INC.

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The accompanying pro forma condensed consolidated financial statements include the data center assets and operations of QualityTech, LP and, unless the context otherwise requires, its consolidated subsidiaries which comprise the data center business (the “Predecessor”). The unaudited pro forma condensed consolidated financial statements as of June 30, 2013, and for the six months ended June 30, 2013 and for the year ended December 31, 2012, are derived from QTS Realty Trust, Inc. (the “Company”), the Predecessor’s consolidated financial statements, and Sacramento Property financial statements and are presented as if this offering, the formation transactions, the Sacramento Property acquisition, and certain debt and equity financing transactions referred to herein had all occurred on June 30, 2013 for the pro forma condensed consolidated balance sheet and as of January 1, 2012 for the pro forma condensed consolidated statement of operations.

The Company was formed on May 17, 2013 and has had no corporate or business activity since its formation other than incurrence of costs to support this offering and the issuance of 1,000 shares of common stock at par value of $0.01. Upon completion of this offering and the formation transactions, the Company estimates that it will own directly or indirectly a % interest in the operating partnership, will own QualityTech GP, LLC, the sole general partner of the operating partnership, and will have control over major decisions related to the sale or refinancing of the existing properties, acquisition of additional properties and day-to-day operations of the operating partnership and its subsidiaries.

The pro forma condensed consolidated financial statements are for informational purposes only and should be read in conjunction with the historical financial statements of the Predecessor, including the notes thereto, included elsewhere in this prospectus. The adjustments to the pro forma condensed consolidated financial statements are based on available information and assumptions that we consider reasonable. The pro forma condensed consolidated financial statements do not purport to represent our financial position or results of operations that would have actually occurred assuming this offering, the formation transactions, the Sacramento Property acquisition, and certain financing transactions referred to herein had all occurred on June 30, 2013, in the case of the pro forma condensed consolidated balance sheet, or on January 1, 2012, as it relates to the pro forma condensed consolidated statement of operations, nor does the information purport to project our financial position or results of operations as of any future date or for any future periods.

F-2

QTS REALTY TRUST, INC.

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of June 30, 2013

(Unaudited)

(Dollars in Thousands)


	Predecessor Historical(a)		Formation Transactions			Total Before This Offering		Receipts and Use of the Proceeds from This Offering(d)		Company Pro Forma
ASSETS
Real estate assets
Land	$	30,517	$	—		$	30,517	$	—	$	30,517
Buildings and improvements		670,783		—			670,783		—		670,783
Less: Accumulated depreciation		(119,576)		—			(119,576)		—		(119,576)

		581,724		—			581,724		—		581,724
Construction in progress		120,036		—			120,036		—		120,036

Real estate assets, net		701,760		—			701,760		—		701,760

Cash and cash equivalents		4,699		1			4,700		30,750		35,450
Rents and other receivables, net		13,016		—			13,016		—		13,016
Acquired intangibles, net		7,721		—			7,721		—		7,721
Deferred costs, net		18,564		—			18,564		—		18,564
Prepaid expenses		2,003		—			2,003		—		2,003
Other assets, net		9,733		935			10,668		(935)		9,733

TOTAL ASSETS	$	757,496	$	936		$	758,432	$	29,815	$	788,247


LIABILITIES AND STOCKHOLDER'S EQUITY
Mortgage notes payable	$	89,903	$	—		$	89,903	$	—	$	89,903
Unsecured credit facility		469,000		—			469,000		(244,000)		225,000
Capital lease obligations		2,163		—			2,163		—		2,163
Accounts payable and accrued liabilities		57,383		—			57,383		—		57,383
Advance rents, security deposits and other liabilities		2,239		935			3,174		—		3,174
Deferred income		6,874		—			6,874		—		6,874
Derivative liability		555		—			555		—		555

TOTAL LIABILITIES		628,117		935			629,052		(244,000)		385,052

STOCKHOLDERS' EQUITY
Predecessor' capital		129,380		(129,380)	(b)		—		—		—
Common stock		(1)		1	(b)		—		—		—
Paid in capital		—		129,380	(b)		129,380		273,815		403,195
		—		—	(c)		—		—		—

Total QTS Realty, Inc. stockholders' equity		129,379		1			129,380		273,815		403,195
Noncontrolling trust interest		—		—	(c)		—		—		—

Total equity		129,379		—			129,380		273,815		403,195
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	757,496	$	936		$	758,432	$	29,815	$	788,247

The accompanying notes are an integral part of the financial statements

F-3

QTS REALTY TRUST, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2013

(Unaudited)

(Dollars in Thousands, Except per Share Amounts)


	Predecessor Historical (AA)			Financing Transaction (BB)		Formation Transaction (CC)		Total Before This Offering			This Offering (DD)		Company Pro Forma
Revenues:
Rental	$	68,589		$	—	$	—	$	68,589		$	—	$	68,589
Recoveries from customers		6,322			—		—		6,322			—		6,322
Cloud and managed services		8,435			—		—		8,435			—		8,435
Other		1,092			—		—		1,092			—		1,092

Total revenues		84,438			—		—		84,438			—		84,438

Operating expenses:
Property operating costs		29,292			—		—		29,292			—		29,292
Real estate taxes and insurance		2,203			—		—		2,203			—		2,203
Depreciation and amortization		22,061			—		—		22,061			—		22,061
General and administrative		19,290			—				19,290			—		19,290

Total operating expenses		72,846			—				72,846			—		72,846

Operating income		11,592			—				11,592			—		11,592
Other income and expense:
Interest income		13			—		—		13			—		13
Interest expense		(11,634	)		4,102		—		(7,532	)		3,073		(4,459	)
Other (expense) income, net		(3,277	)		3,277		—		—			—		—

Net income (loss)	$	(3,306	)	$	7,379	$		$	4,073		$	3,073	$	7,146

Net loss attributable to redeemable Noncontrolling interests(EE)

Net income (loss) attributable to QTS Realty Trust, Inc	$			$		$		$			$		$

Basic income per share(FF)
Diluted income per share(FF)
Weighted average shares outstanding—basic(FF)
Dilutive LP units(FF)

Weighted average shares outstanding—dilutive(FF)

The accompanying notes are an integral part of the financial statements

F-4

QTS REALTY TRUST, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2012

(Unaudited)

(Dollars in Millions, Except Per Share Amounts)


	Predecessor Historical (AA)			Financing Transaction (BB)		Acquisition of Sacramento Property (GG)			Formation Transaction (CC)		Total Before This Offering			This Offering (DD)		Company Pro Forma
Revenues:
Rental	$	120,758		$	—	$	10,377		$	—	$	131,135		$	—	$	131,135
Recoveries from customers		9,294			—		1,319			—		10,613			—		10,613
Cloud and managed services		14,497			—		—			—		14,497			—		14,497
Other		1,210			—		175			—		1,385			—		1,385

Total revenues		145,759			—		11,871			—		157,630			—		157,630


Operating expenses:
Property operating costs		51,506			—		5,487			—		56,993			—		56,993
Real estate taxes and insurance		3,632			—		672			—		4,304			—		4,304
Depreciation and amortization		34,932			—		4,506			—		39,438			—		39,438
General and administrative		35,986			—		624					36,610			—		36,610
Transaction costs		897			—		—			—		897			—		897
Restructuring charge		3,291			—		—			—		3,291			—		3,291

Total operating expenses		130,244			—		11,289					141,533			—		141,533

Operating income		15,515			—		582					16,097			—		16,097

Other income and expense:
Interest income		61			—		8			—		69			—		69
Interest expense		(25,140	)		12,068		(824	)		—		(13,896	)		3,791		(10,105	)
Other (expense) income, net		(1,151	)		—		(2	)		—		(1,153	)		—		(1,153	)

Income (loss) before gain on sale of real estate		(10,715	)		12,068		(236	)				1,117			3,791		4,908
Gain on sale of real estate		948			—		—			—		948			—		948

Net income (loss)		(9,767	)		12,068		(236	)				2,065			3,791		5,856
Net income attributable to redeemable Noncontrolling interests(EE)

Net income (loss) attributable to QTS Realty Trust Inc	$			$		$			$		$			$		$

Basic loss per share(FF)
Diluted loss per share(FF)
Weighted average shares outstanding—basic(FF)
Dilutive LP units(FF)

Weighted average shares outstanding—dilutive(FF)

The accompanying notes are an integral part of the financial statements

F-5

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Adjustments to the Pro Forma Consolidated Balance Sheet as of June 30, 2013

The adjustments to the pro forma condensed consolidated balance sheet as of June 30, 2013 are reflected on a net cash basis as follows:

(a) Reflects the historical unaudited consolidated balance sheet of the Predecessor, QualityTech, LP, as of June 30, 2013, including certain adjustments related to the formation transactions of QTS Realty Trust, Inc.

(b) Reflects the balance sheet of QTS Realty Trust, Inc. on July 2, 2013. QTS Realty Trust, Inc. was organized in the state of Maryland on May 17, 2013. As a result of the proposed merger of General Atlantic REIT, Inc. (“GA REIT”) into QTS Realty Trust, Inc., approximately $ million of Predecessors’ capital will be converted to common shares and paid in capital.

(c) As a result of QTS Realty Trust, Inc.’s consolidation of a less than wholly owned subsidiary, approximately $ million of the equity of the Predecessor is reported in the pro forma balance sheet as a noncontrolling interest. Noncontrolling interest is approximately % of the total of the stockholder’s equity of QTS Realty Trust, Inc. Commencing on the first anniversary of the completion of this offering, at the election of the owners of the noncontrolling interest, the operating partnership units will be redeemable for cash or, at the election of QTS Realty Trust, Inc., common stock of QTS Realty Trust, Inc. on a one-for-one basis.

(d) Reflects the sale of Class A common stock in this offering:


	(dollars in thousands)
Proceeds from this offering	$	300,000
Less costs of this offering:		25,250

Net cash proceeds	$	274,750


Use of proceeds:
Repayment of unsecured credit facility	$	244,000
Cash		30,750

	$	274,750

The Company expects to use $244.0 million of the proceeds to pay down its indebtedness under the revolving portion of the Unsecured Credit Facility. The balance of proceeds will be retained as cash for use in redevelopment activities and general corporate purposes.

2. Adjustments to the Pro Forma Condensed Consolidated Statement of Operations

Adjustments to the pro forma condensed consolidated statement of operations for the six months ended June 30, 2013 and the year ended December 31, 2012, are as follows:

(AA) Reflects the Predecessor’s historical condensed consolidated statements of operations for the six months ended June 30, 2013 (unaudited) and the year ended December 31, 2012.

(BB) Reflects pro forma adjustments to interest expense as if equity capital of approximately $60 million reduced outstanding debt at January 1, 2012, and borrowings at that date included an Unsecured Credit Facility with outstanding term loan indebtedness of $225 million and outstanding credit facility indebtedness of $80 million, the Atlanta Metro equipment loan of approximately $20 million and the Richmond credit facility of $70 million. Interest expense on the revolving credit facility and term loan under the Unsecured Credit Facility, and related $3.5 million outstanding letters of credit has been calculated by applying an interest rate reduction of 1.65% reflecting the change in the interest rate spread to LIBOR from the Secured Credit Facility to the

F-6

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

Unsecured Credit Facility of 2.55%. Amortization of deferred financing costs has been calculated using a five year term on the term loan facility and a four year term on the revolving credit facility. Capitalized interest has been adjusted to the weighted average interest rate considering the rate of the Unsecured Credit Facility for all periods presented. The adjustments to interest expense set forth in the pro forma statements are based upon estimates and assumptions that we believe to be reasonable at this time and are subject to change in the future. The effect of an increase or decrease in interest rates of 1/8% on pro forma interest expense is $0.7 million and $0.3 million for the year ended December 31, 2012 and six months ended June 30, 2013, respectively.

Additionally, the write off of deferred financing costs related to entering into the Unsecured Credit Facility were eliminated as they were non-recurring in nature and directly related to the financing transaction.

(CC) In connection with the Company’s initial public offering, the Company intends to issue equity-based awards to directors, officers and other employees. Included in this issuance will be restricted shares to certain non-employee directors which will vest one year after the date of grant based upon an assumed initial public offering price of $ per share, the mid-point of the price range set forth on the cover page of this prospectus, and restricted shares to officers and other employees which will vest ratably over four years based upon an assumed initial public offering price of $ per share, the mid-point of the price range set forth on the cover page of this prospectus. Total compensation expense of the restricted shares is $ , of which $ will be recognized ratably each year subsequent to their grant. Also included in the issuance of equity-based awards, the Company intends to grant options with respect to shares of its Class A common stock in connection with the consummation of the initial public offering and the conversion of the Class O LTIP Units, which will vest ratably over a period of six months to four years. Based upon an exercise price of $ , the midpoint of the price range set forth on the cover page of this prospectus, total compensation expense of the options is $ , of which $ will be recognized ratably each year subsequent to their grant. The value of the stock options was based upon a Black-Scholes model utilizing a weighted-average expected life of years, expected volatility factor of %, risk free interest rate of %, dividend yield rate of 0% and a forfeiture rate of %. In the case of both the restricted shares and the stock option awards, the fair value on the date of grant will be amortized over the applicable vesting period. As the Company does not have a trading history to measure volatility, the volatility of the Company’s peer group, consisting of public data center REITs, was utilized to measure the fair value of the stock option awards. The actual number of restricted shares and the exercise price and number of shares subject to options will be based upon the price at which the shares are sold to the public in this offering.

(DD) Reflects the pro forma adjustments to interest expense as if $90 million of proceeds from the initial public offering were used to repay indebtedness that was outstanding as of January 1, 2012. The balance of equity proceeds were reflected as cash for the purposes of this calculation, with that cash utilized to finance 2012 capital needs. Interest expense on the revolving credit facility and term loan under the Unsecured Credit Facility, and related $3.5 million outstanding letters of credit has been calculated by applying an interest rate reduction of 1.65% reflecting the change in the interest rate spread to LIBOR from the Secured Credit Facility to the Unsecured Credit Facility of 2.55%. Amortization of deferred financing costs has been calculated using a five year term on the term loan facility and a four year term on the revolving credit facility. Capitalized interest has been adjusted to the weighted average interest rate considering the rate of the Unsecured Credit Facility for all periods presented. The adjustments to interest expense are based upon estimates and assumptions that we believe to be reasonable at this time and are

F-7

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

subject to change in the future. The effect of an increase or decrease in interest rates of 1/8% on pro forma interest expense is $0.4 million and $0.2 million for the year ended December 31, 2012 and six months ended June 30, 2013, respectively.

The pro forma financial statements may not be indicative of QTS Realty Trust, Inc.’s future results of operations as additional general and administrative costs will be necessary to operate as a standalone public company. Management estimates these costs will approximate between $ million and $ million on an annual basis exclusive of equity-based compensation costs. These costs will consist of compensation to hire personnel, board of directors fees, directors and officer’s insurance, professional fees and other general and administrative costs. These costs have been excluded from the pro forma condensed consolidated statement of operations as they represent forward-looking estimates.

(EE) Reflects the noncontrolling interest in the earnings of the Operating Partnership:


	Six Months Ended June 30, 2013	Year Ended December 31, 2012
	(dollars in thousands)
Pro forma net income before noncontrolling interest	$	$
Noncontrolling interest percentage
Noncontrolling interests in net income

(FF) Pro forma net loss per share is calculated as follows:


(dollars in thousands, except per share amounts)	Six Months Ended June 30, 2013		Year Ended December 31, 2012
Pro forma net income	$	7,146	$	5,856
Pro forma net income before noncontrolling interest

Pro forma weighted average shares outstanding—basic
Pro forma weighted average shares outstanding—basic and diluted
Pro forma net income per share—basic	$		$
Pro forma net income per share—diluted	$		$

Weighted average shares outstanding at the date of our initial public offering on a pro forma basis consist of the following:


Shares issued to new investors
Shares issued as a result of the Restructuring Transaction

Total basic weighted average shares
Shares issued to directors, executives and employees in QualityTech, LP

Total diluted weighted average shares			—

(GG) Reflects the historical financial statements of the operations of Herakles, LLC and Sandy Beaches I LP (collectively referred to as “Sacramento Property”) for the period from January 1, 2012 through the date of acquisition and interest expense related to indebtedness of $33.3 million used to fund the acquisition. The acquisition was also funded with $30 million of equity. The assets and operations of the Sacramento Property were acquired on December 21, 2012, and this transaction was accounted for as a business combination.

F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholder of QTS Realty Trust, Inc.

We have audited the accompanying balance sheet of QTS Realty Trust, Inc. (the Company) as of July 2, 2013, and the related notes to the financial statement. The financial statement is the responsibility of the Company’s management. Our responsibility is to express an opinion on the balance sheet based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents fairly, in all material respects, the financial position of QTS Realty Trust, Inc. at July 2, 2013, in conformity with U.S. generally accepted accounting principles .

/s/ Ernst and Young, LLP

Kansas City, MO

July 9, 2013

F-9

QTS REALTY TRUST, INC.

BALANCE SHEET

As of July 2, 2013

(Dollars in Thousands)


ASSETS
Cash and cash equivalents	$	1
Deferred offering costs		935

TOTAL ASSETS	$	936


LIABILITIES AND STOCKHOLDER’S EQUITY
Due to affiliates	$	935

TOTAL LIABILITIES		935

STOCKHOLDER’S EQUITY
Common stock, $0.01 par value, 100,000 shares authorized, 1,000 shares issued and outstanding		1

TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	936

See accompanying notes to financial statement.

F-10

NOTES TO FINANCIAL STATEMENT

1. Organization and Description of Business

QTS Realty Trust, Inc. (the “Company”) was formed as a Maryland corporation on May 17, 2013. The Company has filed a Registration Statement on Form S-11 with the Securities and Exchange Commission with respect to a proposed initial public offering (the “Offering”) of shares of its common stock, par value $.01 per share. The Company intends to contribute proceeds from the Offering to QualityTech, LP (the “Operating Partnership”), which was formed as a Delaware limited partnership on August 5, 2009, in exchange for partnership interests. The Company intends to elect and qualify to be taxed as a real estate investment trust (“REIT”), for U.S. federal income tax purposes, commencing with its taxable year ending December 31, 2013.

The Company has no assets other than cash and deferred offering costs, and has not had any operations other than the issuance of 1,000 shares of common stock to Chad L. Williams in connection with our initial capitalization. As of July 2, 2013, the shares of common stock of the Company were issued to Chad L. Williams in consideration for $1,000, which was paid on July 2, 2013.

Prior to or concurrently with the completion of the Offering, the Company will consummate a series of transactions pursuant to which it will become the sole general partner and majority owner of the Operating Partnership. We refer to these transactions, which are described below, as our “formation transactions.” Following the completion of the Offering and the formation transactions, the Company will be the sole general partner and majority owner of the Operating Partnership. Substantially all of the Company’s assets will be held by, and the Company’s operations will be conducted through, the Operating Partnership. The Company will contribute the net proceeds received by it from the Offering to the Operating Partnership in exchange for partnership units therein. The Company’s interest in the Operating Partnership will generally entitle the Company to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to the Company’s percentage ownership. As the sole general partner of the Operating Partnership, the Company will generally have the exclusive power under the partnership agreement to manage and conduct its business and affairs, subject to certain limited approval and voting rights of the limited partners. The Company’s board of directors will manage its business and affairs.

2. Basis of Presentation and Accounting Policies

Basis of Presentation —The accompanying financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statement and accompanying notes. Actual results may differ from these estimates and assumptions.

Cash and Cash Equivalents —The Company considers all demand deposits and money market accounts purchased with a maturity date of three months or less at the date of purchase to be cash equivalents. The Company’s account balances at one or more institutions periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is concentration of credit risk related to amounts on deposit in excess of FDIC coverage. The Company mitigates this risk by depositing a majority of its funds with several major financial institutions. The Company also has not experienced any losses and, therefore, does not believe that the risk is significant.

F-11

NOTES TO FINANCIAL STATEMENT—(CONTINUED)

3. Income Taxes

The Company intends to elect to be taxed and to operate in a manner that will allow it to qualify as a REIT for U.S. federal income tax purposes commencing with its taxable year ending December 31, 2013.

As a REIT, the Company will be permitted to deduct dividends paid to its stockholders, eliminating the federal taxation of income represented by such dividends at the Company level. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate rates.

Operating as a REIT, QTS Realty Trust, Inc. will be required to distribute at least 90% of its REIT taxable income to its stockholders on an annualized basis. Any taxable income prior to the completion of the offering will be the responsibility of the Operating Partnership.

4. Deferred Offering Costs

In connection with the offering, QTS Realty Trust, Inc. has incurred certain legal, accounting and related costs which are reflected as deferred offering costs.

F-12

QUALITYTECH, LP

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

BALANCE SHEETS

As of June 30, 2013 (Unaudited) and December 31, 2012 (in thousands)


	June 30, 2013			June 30, 2013 Pro forma		December 31, 2012
	(unaudited)			(unaudited)
ASSETS
Real Estate Assets
Land	$	30,517		$		$	24,713
Buildings and improvements		670,783					622,506
Less: Accumulated depreciation		(119,576	)				(102,900	)

		581,724					544,319
Construction in progress		120,036					87,609

Real Estate Assets, net		701,760					631,928

Cash and cash equivalents		4,700					8,232
Restricted cash		—					146
Rents and other receivables, net		13,016					11,943
Acquired intangibles, net		7,721					9,145
Deferred costs, net		18,564					15,062
Prepaid expenses		2,003					1,011
Other assets, net		10,668					7,976

TOTAL ASSETS	$	758,432		$		$	685,443


LIABILITIES
Mortgage notes payable	$	89,903		$		$	171,291
Secured credit facility		—					316,500
Unsecured credit facility		469,000					—
Capital lease obligations		2,163					2,491
Distribution payable		—			7,675		—
Accounts payable and accrued liabilities		57,383					36,001
Advance rents, security deposits and other liabilities		3,174					3,011
Deferred income		6,874					6,745
Derivative liability		555					767
Member advances and notes payable		—					26,958

TOTAL LIABILITIES		629,052			636,727		563,764

PARTNERS' CAPITAL
Partners’ capital		129,380			121,705		121,679

TOTAL LIABILITIES AND PARTNERS’ CAPITAL	$	758,432		$	758,432	$	685,443

See accompanying notes to financial statements.

F-13

QUALITYTECH, LP

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

For the Three and Six Months Ended June 30, 2013 and 2012 (in thousands)


	Three Months Ended June 30, (unaudited)						Six Months Ended June 30, (unaudited)
	2013			2012			2013			2012
Revenues:
Rental	$	34,783		$	30,725		$	68,589		$	59,516
Recoveries from customers		3,456			2,283			6,322			4,489
Cloud and managed services		4,325			3,459			8,435			6,883
Other		376			222			1,092			444

Total revenues		42,940			36,689			84,438			71,332


Operating expenses:
Property operating costs		14,884			12,441			29,292			25,556
Real estate taxes and insurance		1,090			762			2,203			1,525
Depreciation and amortization		11,246			8,643			22,061			16,394
General and administrative		9,696			8,829			19,290			17,187
Transaction costs		—			—			—			—
Restructuring charge		—			—			—			3,291

Total operating expenses		36,916			30,675			72,846			63,953


Operating income		6,024			6,014			11,592			7,379

Other income and expense:
Interest income		7			11			13			46
Interest expense		(5,084	)		(6,291	)		(11,634	)		(12,393	)
Other expense, net		(2,179	)		—			(3,277	)		(1,434	)

Net loss		(1,232	)		(266	)		(3,306	)		(6,402	)
Unrealized gain (loss) on swap		140			(432	)		212			(352	)

Comprehensive loss	$	(1,092	)	$	(698	)	$	(3,094	)	$	(6,754	)

See accompanying notes to financial statements.

F-14

QUALITYTECH, LP

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS OF CHANGES IN PARTNERS’ (DEFICIT) CAPITAL (UNAUDITED)


	Partnership Units (in thousands)				Capital Accounts ($ in thousands)
	LP Units		GP Units		LP Units			GP Units		Total
Balance, December 31, 2012		22,173		1	$	121,679		$	—	$	121,679

Equity-based compensation expense		—		—		795			—		795
Member advances exchange for LP units		400		—		10,000			—		10,000
Net loss		—		—		(3,306	)		—		(3,306	)
Other comprehensive income		—		—		212			—		212

Balance, June 30, 2013		22,573		1	$	129,380		$	—	$	129,380

See accompanying notes to financial statements.

F-15

QUALITYTECH, LP

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Six Months Ended June 30, 2013 and 2012 (in thousands)


	2013			2012
Cash flow from operating activities:
Net loss	$	(3,306	)	$	(6,402	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization		21,003			15,884
Amortization of deferred loan costs		1,605			1,754
Equity-based compensation expense		795			179
Change in fair value of derivatives		—			322
Write off of deferred loan costs		2,031			1,434
Restructuring charge		—			3,291
Changes in operating assets and liabilities
Rents and other receivables, net		(1,073	)		755
Accrued interest on member advances		—			1,133
Prepaid expenses		(992	)		(577	)
Restricted cash		146			1,008
Other assets		(554	)		(281	)
Accounts payable and accrued liabilities		43			2,148
Advance rents, security deposits and other liabilities		163			(942	)
Deferred income, net		129			977

Net cash provided by operating activities		19,990			20,683

Cash flow from investing activities:
Acquisition of real estate		(21,174	)		—
Capital additions		(65,352	)		(66,503	)

Cash used in investing activities		(86,526	)		(66,503	)

Cash flow from financing activities:
Credit facility proceeds		512,500			366,000
Cash in transit		12,961			—
Debt repayment		(456,994	)		(310,999	)
Payment of swap liability		—			(4,347	)
Payment of deferred financing costs		(3,783	)		(4,587	)
Principal payments on capital lease obligation		(328	)		(157	)
Scheduled mortgage principal debt repayments		(1,352	)		(1,771	)

Net cash provided by financing activities		63,004			44,139

Net decrease in cash and cash equivalents		(3,532	)		(1,681	)
Cash and cash equivalents, beginning of period		8,232			7,342

Cash and cash equivalents, end of period	$	4,700		$	5,661

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest (excluding deferred financing costs)	$	14,755		$	10,848

Noncash investing and financing activites:
Accrued capital additions	$	27,260		$	11,596

Member advances exchange for LP units	$	10,000		$	—

See accompanying notes to financial statements.

F-16

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business

QualityTech, LP (the “Operating Partnership” or the “Company”) was formed in October 2009 as a Delaware limited partnership among Chad L. Williams, the Company’s Chairman and Chief Executive Officer, certain other partners and a subsidiary of General Atlantic LLC to own and operate data center properties and the managed service business previously owned by entities controlled by Chad L. Williams.

QualityTech GP, LLC (the “General Partner”) is the Company’s general partner. The General Partner was formed in October 2009 as a Delaware limited liability company and is wholly owned by Chad L. Williams. Certain of the Company’s partners, including the General Partner, are parties to a unit holders’ agreement that provides for certain matters regarding transfer of partnership interests in the Company, the Company’s governance and the Company’s ownership, including requiring specified approvals for certain major decisions.

The Company will continue indefinitely until dissolved as provided in the Partnership Agreement. Each of the subsidiary limited liability companies owned by the Company will continue indefinitely until dissolved as provided by their respective limited liability company agreements.

2. Summary of Significant Accounting Policies

Supplemental Pro Forma Balance Sheet Information —The supplemental pro forma balance sheet information has been presented in accordance with SEC Staff Accounting Bulletin Topic 1B.3. The supplemental pro forma balance sheet information gives effect to the distribution of approximately $7.7 million which was paid on August 15, 2013. The distribution is comprised of $7.7 million funded with borrowings under the Company’s unsecured credit facility. The distribution payable is not reflected in the balance sheet as of June 30, 2013. Accordingly, the Company is reporting a distribution payable in the supplemental pro forma balance sheet information.

Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts and deferred tax assets; and the valuation of derivatives, fixed assets, acquired intangible assets and certain accruals.

Principles of Consolidation —The consolidated financial statements include the accounts of QualityTech, LP and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the financial statements.

Real Estate Assets —Real estate assets are reported at cost. All capital improvements for the income-producing properties that extend their useful life are capitalized to individual property improvements and depreciated over their estimated useful lives. Depreciation is generally provided on a straight-line basis over 40 years from the date the property was placed in service. Property improvements are depreciated on a straight-line basis over the life of the respective improvement ranging from 20 to 40 years from the date the components were placed in service. Leasehold improvements are depreciated over the lesser of 20 years or through the end of the respective life of the lease. Repairs and maintenance costs are expensed as incurred. The aggregate depreciation charged to operations was $9.0 million and $7.3 million for the three months ended June 30, 2013 and 2012, respectively, and $17.5 million and $13.9 million for the six months ended June 30, 2013 and 2012, respectively.

F-17

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

The Company capitalizes certain development costs, including internal costs, incurred in connection with redevelopment of data center facilities. The capitalization of costs during the construction period (including interest and related loan fees, property taxes and other direct and indirect costs) begins when redevelopment efforts commence and ends when the asset is ready for its intended use. Capitalization of such costs, excluding interest, aggregated to $2.2 million and $1.7 for the three months ended June 30, 2013 and 2012, respectively, and $3.9 million and $3.2 million for the six months ended June 30, 2013 and 2012, respectively.

Interest is capitalized during the period of development by first applying the Company’s actual borrowing rate on the related asset and second, to the extent necessary, by applying the Company’s weighted average effective borrowing rate to the actual redevelopment and other costs expended during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $1.1 million and $0.5 million for the three months ended June 30, 2013 and 2012, respectively, and $2.1 million and $1.1 million for the six months ended June 30, 2013 and 2012, respectively.

Acquisition of Real Estate —Purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance to the accounting requirements of ASC 805, Business Combinations, which requires the recording of net assets of acquired businesses at fair value. The fair value of the real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, building and improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases and value of customer relationships.

In developing estimates of fair value of acquired assets and assumed liabilities, management analyzed a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets.

Intangible assets and liabilities include acquired above-market leases, below-market leases, in-place leases and customer relationships.

Acquired in-place lease costs are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Amortization of acquired in place lease costs, including write-offs for terminated leases, totaled $0.4 million and $1.0 million for the three and six months ended June 30, 2013, respectively, with no material amortization during the three and six months ended June 30, 2012.

Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. Amortization of acquired customer relationships, including write-offs for terminated leases, totaled $0.4 million and $0.2 million for the three months ended June 30, 2013 and 2012, respectively, and $0.8 million and $0.4 million for the six months ended June 30, 2013 and 2012, respectively.

Should a customer terminate its lease, the unamortized portions of the acquired above-market leases, below-market leases, in-place leases and customer relationships associated with that customer are written off to amortization expense or rental revenue, as indicated above.

F-18

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

Impairment of Long-Lived and Intangible Assets —The Company reviews its long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is generally measured by comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset group. If the net carrying value of the asset exceeds the value of the undiscounted cash flows, the fair value of the asset is assessed and may be considered impaired. An impairment loss is recognized based on the excess of the carrying amount of the impaired asset over its fair value. No impairment losses were recorded for any of the three and six months ended June 30, 2013 and 2012, respectively.

As of June 30, 2013, the Company had $13.0 million in cash in transit related to the payoff of a loan from Chad L. Williams and entities controlled by Mr. Williams. As a result of this transaction, the Company recorded $13.0 million in accrued liabilities as of June 30, 2013 and drew funds for the transaction using the revolving credit facility on July 3, 2013.

Restricted Cash —Restricted cash includes accounts restricted by the Company’s loan agreements and escrow deposits for interest, insurance, taxes and capital improvements held by the various banks and financial institutions as required by the loan agreements. Such deposits are held in bank checking or investment accounts with original maturities of three months or less.

Deferred Costs —Deferred costs, net, on the Company’s balance sheets include both financing costs and leasing costs.

Deferred financing costs represent fees and other costs incurred in connection with obtaining debt and are amortized over the term of the loan and are included in interest expense. Amortization of the deferred financing costs was $0.7 million and $0.8 million for the three months ended June 30, 2013 and 2012, respectively, and $1.6 million and $1.7 million for the six months ended June 30, 2013 and 2012, respectively. During the three months ended June 30, 2013, the Company wrote off unamortized financing costs of $2.0 million in connection with the expansion of its revolving and term credit facilities. In addition, during the six months ended June 30, 2013, the Company wrote off unamortized financing costs of $1.3 million in connection with an asset securitization which the Company is no longer pursuing due to the expansion of the credit facility. During the six months ended

F-19

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

June 30, 2012, the Company wrote off unamortized financing costs of $1.4 million, primarily relating to the Suwanee, GA and Richmond, VA loans that were repaid during the quarter. Deferred financing costs, net of accumulated amortization, are as follows:


	June 30, 2013			December 31, 2012
	(unaudited)
	(dollars in thousands)
Deferred financing costs	$	27,496			$	23,713
Accumulated amortization		(19,077	)			(16,857	)

Deferred financing costs, net	$	8,419			$	6,856

Deferred leasing costs consist of external fees and internal costs incurred in the successful negotiations of leases and are deferred and amortized over the terms of the related leases on a straight-line basis. If an applicable lease terminates prior to the expiration of its initial term, the carrying amount of the costs are written off to amortization expense. Amortization of deferred leasing costs totaled $2.1 million and $1.6 million for the six months ended June 30, 2013 and 2012, respectively. Deferred leasing costs, net of accumulated amortization are as follows:


	June 30, 2013			December 31, 2012
	(unaudited)
	(dollars in thousands)
Deferred leasing costs	$	22,130		$	18,139
Accumulated amortization		(11,985	)		(9,933	)

Deferred leasing costs, net	$	10,145		$	8,206

Advance Rents and Security Deposits —Advance rents, typically prepayment of the following month’s rent, consist of payments received from customers prior to the time they are earned and are recognized as revenue in subsequent periods when earned. Security deposits are collected from customers at the lease origination and are generally refunded to customers upon lease expiration.

Deferred Income —Deferred income generally results from non-refundable charges paid by the customer at lease inception to prepare their space for occupancy. The Company records this initial payment, commonly referred to as set-up fees, as a deferred income liability which amortizes into rental revenue over the term of the related lease on a straight-line basis. Deferred income was $6.9 million and $6.8 million as of June 30, 2013 and December 31, 2012, respectively. Additionally, $1.1 million and $1.0 million of deferred income were amortized into revenue for the three months ended June 30, 2013 and 2012, respectively, and $2.2 million and $1.9 million for the six months ended June 30, 2013 and 2012, respectively.

Interest Rate Derivative Instruments —The Company utilizes derivatives to manage its interest rate exposure. The interest rate swaps entered into in September 2006 did not meet the criteria for hedge accounting and accordingly, the Company reported the change in the fair value of the derivative reported in interest expense in the accompanying Statements of Operations and Comprehensive Loss.

During February 2012, the Company entered into interest rate swaps with a notional amount of $150 million which are cash flow hedges and qualify for hedge accounting. For these hedges, the effective portion of the change in fair value is recognized through other comprehensive income or loss.

F-20

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

Amounts are reclassified out of other comprehensive income (loss) as the hedged item is recognized in earnings, either for ineffectiveness or for amounts paid relating to the hedge. As there was no ineffectiveness recorded in the periods presented, the Company has accordingly reflected the change in the fair value of the instrument in other comprehensive income (loss).

For derivative instruments that are not accounted for using hedge accounting, or for the ineffective portions of qualifying hedges, the change in fair value is recorded through interest expense in the respective period.

Equity-based Compensation —The Company may issue Class RS units of limited partnership interest (“Class RS Units”) or Class O units of limited partnership interest (“Class O Units”) to an affiliated company, QualityTech Employee Pool, LLC (“Employee Pool”), on behalf of employees and non-employee directors who are granted an award under the QualityTech, LP 2010 Equity Incentive Plan. All equity-based compensation is measured at fair value on the grant date or date of modification, as applicable, and recognized in earnings over the requisite service period. Depending upon the settlement terms of the awards, all or a portion of the fair value of equity-based awards may be presented as a liability or as equity in the consolidated balance sheets. Equity-based compensation costs associated with the portion of awards classified as equity are measured based upon their estimated fair value on the date of grant or modification. Equity-based compensation costs associated with the portion of awards classified as liabilities are measured based upon their estimated fair value at the grant date and re-measured as of the end of each period. The Company recorded equity-based compensation expense net of repurchased awards acquired of $0.4 million and $0.1 million for the three months ended June 30, 2013, and 2012, respectively, and $0.8 million and $0.2 million for the six months ended June 30, 2013 and 2012, respectively.

Rental Revenue —The Company, as a lessor, has retained substantially all the risks and benefits of ownership and accounts for its leases as operating leases. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases, which commences when control of the space has been provided to the customer. The amount of the straight-line rent receivable on the balance sheets included in rents and other receivables, net, was $2.6 million and $2.4 million as of June 30, 2013 and December 31, 2012, respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed above.

Allowance for Uncollectible Accounts Receivable— Rents receivable are recognized when due and are carried at cost, less an allowance for doubtful accounts. The Company records a provision for losses on rents receivable equal to the estimated uncollectible accounts, which is based on management’s historical experience and a review of the current status of the Company’s receivables. As necessary, the Company also establishes an appropriate allowance for doubtful accounts for receivables arising from the straight-lining of rents. The aggregate allowance for doubtful accounts was $0.5 million and $0.5 million as of June 30, 2013 and December 31, 2012, respectively.

Capital Lease —The Company evaluates leased real estate to determine whether the lease should be classified as a capital or operating lease in accordance with U.S GAAP.

In 2011, the Company entered into capital leases for certain equipment. The outstanding liabilities for the capital leases were $2.2 million and $2.5 million as of June 30, 2013 and December 31, 2012, respectively. Depreciation related to the associated assets is included in depreciation and amortization expense in the Statements of Operations and Comprehensive Loss.

F-21

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

Recoveries from Customers —Certain customer leases contain provisions under which the customers reimburse the Company for a portion of the property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling-related charges. The reimbursements are included in revenue as recoveries from customers in the Statements of Operations and Comprehensive Loss in the period the applicable expenditures are incurred. Certain customer leases are structured to provide a fixed monthly billing amount that includes an estimate of various operating expenses, with all revenue from such leases included in rental revenues.

Cloud and Managed Services Revenue —The Company may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided.

Segment Information —The Company manages business as one operating segment and thus one reportable segment consisting of a portfolio of investments in data centers located in the United States.

Restructuring —In March 2012, the Company decided to consolidate its New York area operations into the New Jersey data center facility. The Company transferred certain customers from the New York City facility to the New Jersey facility. As of June 30, 2012, the Company had not exited the facility but reserved $3.3 million for the cost of this consolidation. As this consolidation was completed in 2012, there were no restructuring costs incurred during the six months ended June 30, 2013.

Customer Concentrations —As of June 30, 2013, the Company was receiving approximately 7% of its monthly rental revenue from one customer. No other customers exceeded 5% of total monthly rental revenue.

As of June 30, 2013, two of our customers represented 7.3% and 6.9% of total accounts receivable. No other customers exceeded 5% of total accounts receivable.

Income Taxes —The Operating Partnership is obligated to comply with Internal Revenue Service real estate investment trust (“IRS REIT”) tax regulations in accordance with the unit holders’ agreement. In order to comply with this obligation, the Company elected for one of its existing subsidiaries to be taxed as a taxable REIT subsidiary under the IRS REIT tax regulations. The taxable REIT subsidiary is allocated income and expense based on IRS REIT tax regulations.

For the taxable REIT subsidiary, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company’s tax provision has not changed materially subsequent to December 31, 2012.

Fair Value Measurements –ASC Topic 820 emphasizes that fair-value is a market-based measurement, not an entity-specific measurement. Therefore, a fair-value measurement should be

F-22

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, a fair-value hierarchy is established that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the level in the fair-value hierarchy within which the entire fair- value measurement falls is based on the lowest level input that is significant to the fair-value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Financial assets and liabilities measured at fair value in the financial statements on a recurring basis consist of the Company’s derivatives. The fair values of the derivatives are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded as of June 30, 2013 and December 31, 2012 that the fair value associated to “significant unobservable inputs” for risk of non-performance was insignificant to the overall fair value of the derivative agreements and, as a result, have determined that the relevant inputs for purposes of calculating the fair value of the derivative agreements, in their entirety, were based upon “significant other observable inputs.” The Company determined the fair value of derivatives using level 2 inputs. These methods of assessing fair value result in a general approximation of value, and such value may never be realized.

F-23

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

The Company’s financial instruments held at fair value are presented below as of June 30, 2013 and December 31, 2012:


			Fair Value Measurements
	Carrying Value		Level 1		Level 2		Level 3
	(dollars in thousands)
June 30, 2013
Financial Liabilities:
Interest rate swap liability(1)	$	555	$	—	$	555	$	—
December 31, 2012
Financial Assets:
Restricted deposits, held at fair value	$	146	$	146	$	—	$	—
Financial Liabilities:
Interest rate swap liability(1)	$	767	$	—	$	767	$	—

(1)	The Company used inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable relating to the measurement of the interest rate swap. The fair value measurement of the interest rate swap has been classified as Level 2.

Recent Accounting Pronouncements —In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Loss. The amendments in this update require an entity to provide information about the amounts reclassified from accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the income statement or in the notes, significant amounts reclassified from accumulated other comprehensive income by the net income line item. The adoption of this amended guidance on January 1, 2013 did not have a material impact on the Company's consolidated results of operations, financial position and cash flows.

In February 2013, the FASB issued ASU No. 2013-03, "Clarifying the Scope and Applicability of a Particular Disclosure to Nonpublic Entities" ("ASU 2013-03"). The amendment clarifies that the requirement to disclose the level of the fair value hierarchy within which the fair value measurements are categorized in their entirety (as Level 1, Level 2 or Level 3) does not apply to private companies and nonpublic not-for-profits for items that are not measured at fair value in the statement of financial position, but for which fair value is disclosed. The amendments are effective upon issuance. Management does not expect the adoption of this standard will have a significant effect on the Company's consolidated financial position or results of operations.

3. Acquisitions of Real Estate

In February 2013, the Company completed its acquisition of a site in Dallas, Texas. The Company paid cash of $10.25 million for the Dallas facility. In connection with the transaction, the Company obtained $10.25 million of seller-financed debt that was repaid in June 2013 as outlined in Note 5. Additionally, the Company incurred transaction costs of $0.6 million, which were capitalized, providing an aggregate cost of $21.2 million. Upon completion of the redevelopment, the former 700,000 square foot semiconductor plant will be converted into a data center facility on the existing campus. In accordance with ASC 805, the Company accounted for this acquisition as an asset purchase.

In December 2012, the Company purchased a data center facility located in Sacramento, California for which the Company paid approximately $63.3 million. The preliminary purchase price allocation was

F-24

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

based on an assessment of the fair value of the assets acquired. The preliminary purchase price allocation recorded for the year ended December 31, 2012, was adjusted in 2013 as the valuation analysis progressed. The following table summarizes the consideration for the Sacramento facility and the adjusted preliminary allocation of the fair value of assets acquired as of June 30, 2013:


	Adjusted Sacramento facility as of June 30, 2013		Original Sacramento facility as of December 31, 2012		Adjustment			Weighted average useful life
	(in thousands)
Working capital	$	—	$	—	$	—
Buildings		52,439		52,753		(314	)		40
Land		1,481		1,485		(4	)
Tenant relationship		5,366		5,029		337			4
In place leases		3,964		3,202		762			2
Above (below) market leases		—		781		(781	)		1

Total purchase price	$	63,250	$	63,250	$	—

The purchase price allocation remains provisional pending completion of further valuation analysis. Any further revisions will be recorded as adjustments to the final purchase price allocation.

4. Real Estate Assets and Construction in Progress

The following is a summary of properties owned by the Operating Partnership as of June 30, 2013 and December 31, 2012 (in thousands):

As of June 30, 2013 (unaudited)


Property Location	Land		Buildings and Improvements		Construction in Progress		Total Cost
	(dollars in thousands)
Owned Properties
Suwanee, Georgia	$	3,521	$	116,875	$	3,104	$	123,500
Atlanta, Georgia		15,314		270,557		22,352		308,223
Santa Clara, California*		—		85,630		599		86,229
Richmond, Virginia		2,179		77,796		87,111		167,086
Sacramento, California		1,481		52,588		1,689		55,758
Dallas, Texas		5,808		15,366		2,550		23,724
Miami, Florida		1,777		27,401		—		29,178
Lenexa, Kansas		437		3,317		—		3,754
Wichita, Kansas		—		1,407		—		1,407

		30,517		650,937		117,405		798,859

Leased Properties
Jersey City, New Jersey		—		19,117		2,620		21,737
Overland Park, Kansas		—		729		11		740

		—		19,846		2,631		22,477

	$	30,517	$	670,783	$	120,036	$	821,336

*	Owned facility subject to long-term ground sublease.

F-25

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

As of December 31, 2012


Property Location	Land		Buildings and Improvements		Construction in Progress		Total Cost
	(dollars in thousands)
Owned Properties
Suwanee, Georgia	$	3,521	$	103,438	$	3,572	$	110,531
Atlanta, Georgia		15,314		263,192		6,658		285,164
Santa Clara, California*		—		83,536		245		83,781
Richmond, Virginia		2,179		71,629		71,986		145,794
Sacramento, California		1,485		52,753		—		54,238
Miami, Florida		1,777		27,111		—		28,888
Lenexa, Kansas		437		54		3,260		3,751
Wichita, Kansas		—		1,408		—		1,408

		24,713		603,121		85,721		713,555

Leased Properties
Jersey City, New Jersey		—		18,666		1,888		20,554
Overland Park, Kansas		—		719		—		719

		—		19,385		1,888		21,273

	$	24,713	$	622,506	$	87,609	$	734,828

*	Owned facility subject to long-term ground sublease.

5. Credit Facilities and Mortgages Payable

Below is a listing of our outstanding debt as of June 30, 2013 and December 31, 2012 (in thousands):


	June 30, 2013		December 31, 2012
	(unaudited)
Unsecured Credit Facility	$	469,000	$	—
Secured Credit Facility		—		316,500
Richmond Credit Facility		70,000		70,000
Atlanta Metro Equipment Loan		19,903		20,931
Miami Loan		—		26,048
Suwanee Land Loan		—		1,600
Lenexa Loan		—		2,712
Santa Clara Bridge Loan		—		50,000

Total	$	558,903	$	487,791

(a) Unsecured Credit Facility —On May 1, 2013, the Company entered into an unsecured credit facility agreement with KeyBank National Association (the “Unsecured Credit Facility”) and has used the proceeds from the Unsecured Credit Facility to repay the Secured Credit Facility (as defined below). This new unsecured credit facility has a term loan of $225 million, which has a term of five years, and a revolving credit facility of $350 million, which has a term of four years, for an aggregate borrowing capacity of $575 million.

F-26

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

During the second quarter of 2013, the Company used proceeds from the Unsecured Credit Facility to pay the outstanding balances under the Secured Credit Facility, loans secured by the Miami and Santa Clara data centers, seller financing to acquire the Lenexa and Dallas facilities, a loan agreement for the purchase of land near or adjacent to the Suwanee facility and a loan from Chad L. Williams and entities controlled by Mr. Williams.

The Unsecured Credit Facility requires monthly interest payments and requires the Company to comply with various quarterly covenant requirements relating to debt service coverage ratio, fixed charge, leverage ratio and tangible net worth and various other operational requirements. In connection with the Unsecured Credit Facility, the Company has an additional $3.5 million letter of credit outstanding.

(b) Secured Credit Facility —On September 28, 2010, the Company entered into a secured credit facility agreement with KeyBank National Association (the “Secured Credit Facility”) and various other lenders with a total borrowing capacity of $125 million. During 2011, the Company expanded the facility, increasing the borrowing capacity to $170 million. On February 8, 2012, the Company increased the capacity of its credit facility by $270 million and extended the maturity date to September 28, 2014. The amended and extended credit facility, which then totaled $440 million, was secured by the Atlanta Metro and Suwanee data center facilities. Of the $440 million credit facility, $125 million was a term loan and $315 million was a revolving credit facility. The credit facility also provided a $100 million accordion feature that could increase the amount of the facility up to $540 million.

Concurrently with the closing of the amended and extended credit facility, the Company entered into an interest rate cap agreement with a notional amount of $150 million. This instrument provided a one month LIBOR cap of 2.05% and had an effective date of February 8, 2012 and a termination date of February 8, 2013. The Company also entered into two interest rate swaps with an aggregate $150 million notional amount and an effective date of February 8, 2013 to succeed the interest rate caps. These swaps have a maturity date of September 28, 2014, provide for a fixed one month LIBOR rate of 0.5825% from February 8, 2013 through September 28, 2014 and qualify for cash flow hedge accounting.

As discussed above, the Secured Credit Facility was repaid with proceeds of the Unsecured Credit Facility the Company entered into on May 1, 2013.

(c) Richmond Credit Facility —In December 2012, the Company entered into a credit facility secured by the Company’s Richmond data center (the “Richmond Credit Facility”). This credit facility had a total borrowing capacity of $80 million at December 31, 2012, which was increased to $100 million in January 2013. This credit facility also includes an accordion feature that allows the Company to increase the size of the credit facility up to $125 million. This credit facility bears interest at variable rates ranging from LIBOR plus 4.0% to LIBOR plus 4.5% (rate at June 30, 2013 was LIBOR plus 4.25%, or 4.44% per annum) based on the Company’s overall leverage ratio as defined, and the loan has a stated maturity date of December 18, 2015 with an option to extend for one additional year.

(d) Atlanta Metro Equipment Loan —On April 9, 2010, the Company entered into a $25 million loan to finance equipment related to an expansion project at the Company’s Atlanta Metro data center (“the Atlanta Metro Equipment Loan”). The loan originally featured monthly interest-only payments but now requires monthly interest and principal payments. The loan bears interest at 6.85%, amortizes over ten years and matures on June 1, 2020.

F-27

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

(e) Miami Loan —In March 2008, the Company obtained a mortgage loan with a maximum borrowing capacity of $32.8 million secured by the Company’s Miami data center (“Miami Loan”). In December 2012, the Company extended the maturity date to allow repayment using proceeds from the Unsecured Credit Facility and also fixed the interest rate at 7%. As discussed above, this loan was repaid with proceeds of the Unsecured Credit Facility the Company entered into on May 1, 2013.

(f) Suwanee Land Loan— In 2011, the Company executed a $1.6 million loan agreement for the purchase of land near or adjacent to the Suwanee facility (the “Suwanee Land Loan”). The interest rate on the loan was 10% and the loan matured September 26, 2013. In June 2013, the Company repaid the outstanding balance of the Suwanee Land Loan.

(g) Lenexa Loan —In June 2011, the Company entered into a $2.8 million seller financing to acquire the Lenexa facility (the “Lenexa Loan”). The interest rate on this loan was 5.43% and it matured on May 26, 2013. This loan was repaid at maturity.

(h) Santa Clara Bridge Loan —In November 2012, the Company entered into a $50 million bridge loan with Key Bank (the “Santa Clara Bridge Loan”). The loan had an interest rate of LIBOR plus 3.50% and a maturity date of February 11, 2013 with a three month extension option, which the Company exercised. As discussed above, this loan was repaid with proceeds of the Unsecured Credit Facility the Company entered into on May 1, 2013.

(i) Dallas Note —In connection with the Dallas acquisition, the Company obtained $10.25 million of seller-financed debt (the “Dallas Note”) which was due no later than December 31, 2013 and carried an escalating interest rate between 2.5% and 10% based on the repayment date of the loan. In June 2013, the Company repaid the outstanding balance of the seller-financed debt.

The weighted average interest rate of the Company’s debt, which includes the effect of deferred financing costs and swap derivatives, was 3.32% as of June 30, 2013.

The annual remaining principal payment requirements as of June 30, 2013 per the contractual maturities and excluding extension options are as follows (in thousands):


2013	$	1,064
2014		2,239
2015		72,397
2016		2,567
2017		246,748
Thereafter		233,888

Total	$	558,903

As of June 30, 2013, the Company was in compliance with all of its covenants.

6. Interest Rate Derivative Instruments

As discussed in Note 5, the Company entered into interest rate cap and swap agreements with a notional amount of $150 million on February 8, 2012. Derivatives that were entered into in September 2006 did not qualify for hedge accounting treatment, and therefore were not accounted for as hedges. Those derivative instruments were settled in February 2012 and were replaced by derivative instruments designated as cash flow hedges for hedge accounting.

F-28

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

For derivative instruments that are accounted for as hedges, or for the effective portions of qualifying hedges, the change in fair value is recorded through other comprehensive income (loss). The total amount of unrealized gains recorded in other comprehensive income (loss) for the three months ended June 30, 2013 were $0.1 million, compared to the total amount of unrealized losses of $0.4 million for the three months ended June 30, 2012. The total amount of unrealized gains recorded in other comprehensive income (loss) for the six months ended June 30, 2013 were $0.2 million, compared to the total amount of unrealized losses of $0.4 million for the six months ended June 30, 2012.

Interest expense related to payments on interest rate swaps for the three and six months ended June 30, 2013 were $0.1 and $0.2 million, respectively, and $0.5 million for the six months ended June 30, 2012. There were no such interest payments for the three months ended June 30, 2012.

As of June 30, 2013 and December 31, 2012, the value of the interest rate swaps was a liability of $0.6 million and $0.8 million, respectively. These values were determined using Level 2 inputs within the valuation hierarchy.

7. Member Advances and Notes Payable

In October 2009, the Company amended and restated its outstanding loans with Chad L. Williams and entities controlled by Chad L. Williams into a loan in the original principal amount of $20.4 million (the “Member Advances”). The Member Advances were unsecured and had a maturity date of the earliest of December 31, 2013 or upon certain specified transactions. The Member Advances were subordinate in priority to the Company’s mortgage notes payable. Interest under the Member Advances accrued monthly at the rate of 9% per annum, which was added to the principal balance of the Member Advances if not paid. The balance of the Member Advances is separately disclosed on the face of the financial statements. On May 1, 2013, the lender under the Member Advances exercised an option to purchase $10 million of Class D units in exchange for the cancellation of $10 million of the outstanding balance under the Member Advances. Additionally, the Company repaid the remaining outstanding balance of the Member Advances in the second quarter of 2013.

As of June 30, 2013, the Company had $13.0 million in cash in transit related to the payoff of the Member Advances as outlined in Note 2.

8. Commitments and Contingencies

The Company is subject to various routine legal proceedings and other matters in the ordinary course of business. While resolution of these matters cannot be predicted with certainty, management believes, based upon information currently available, that the final outcome will not have a material adverse impact on the Company’s financial statements.

The Company previously entered into a master service agreement with a third party Internet service provider. The Company was not receiving industry-standard quality of Internet and connectivity services and terminated the contract. The third party Internet service provider challenged the grounds for the Company’s termination and sued the Company in Georgia state court seeking the fees the Company owed prior to the termination plus a termination fee equal to the amount the Company would have paid had it not terminated the agreement. The Georgia state court ruled to limit damages, if any, to six months of unpaid fees. The Company has established an accrual associated with this matter which is recorded as a component of accrued liabilities.

F-29

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

9. Partners’ Capital and Incentive Compensation Plans

The General Partner has the full power and authority to do all the things necessary to conduct the business of the Operating Partnership. At June 30, 2013, the General Partner had no balance in its reported capital account. Other than equity incentive plan activity, there was no activity in the Company’s capital structure in the three months ended June 30, 2013.

The Company has five classes of limited partnership units outstanding: Class A units of limited partnership interest (“Class A Units”), Class C units of limited partnership interest (“Class C Units”), Class D units of limited partnership interest (“Class D Units”), Class RS units and Class O units.

The Class A Units are redeemable at fair value at any time on or after one year following the later of the beginning of the first full calendar month following the first date on which the common shares of the General Partner (or its successor general partner) are publicly traded or the date of initial issuance of the units. The General Partner may in its sole discretion elect to assume and satisfy the redemption amount with cash or its shares.

Class C Units and Class D Units are preferred units that are pari pasu with each other and senior to the Class A Units, Class RS Units and Class O Units. Class C Units and Class D Units generally have the same designation, preferences, rights, powers and duties as Class A Units; however, in accordance with the provisions of the Company’s partnership agreement (the “Partnership Agreement”), upon certain liquidity events (as defined in the Partnership Agreement), Class C Units and Class D Units rank senior to Class A units and are entitled to a liquidation preference equal the greater of (i) $20 for Class C Units and $25 for Class D Units, in each case plus declared but unpaid distributions, subject to anti-dilution adjustments, or (ii) the amount the holder would have been entitled to receive in respect of each such Class C Unit or Class D Unit if, immediately prior to the applicable Liquidity Event, such units were converted into Class A Units at a conversion ratio equal to the amount in clause (i) divided by $20 for Class C Units and $25 for Class D Units. In addition, immediately prior to the consummation of an initial public offering, Class C Units and Class D Units automatically convert into Class A units on the terms and conditions set out in the Partnership Agreement at the conversion ratio set forth in clause (ii) above.

Class RS Units or Class O Units may be issued upon grants made under the QualityTech, LP 2010 Equity Incentive Plan. Class RS Units and Class O Units may be subject to vesting and are pari passu with Class A Units. Vested Class RS Units and Class O Units are convertible into Class A Units based on formulas contained in the Partnership Agreement.

The Company sponsors an equity incentive plan for its employees. Awards generally vest over a defined service period. For the six months ended June 30, 2013, 224,000 awards were granted, 27,000 units were forfeited and 2,500 RS Units were converted to Class A Units.

F-30

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

The following table summarizes information about awards outstanding as of June 30, 2013.


	Awards Outstanding
	Exercise prices		Awards outstanding		Weighted remaining contractual life (years)
RS units	$	—		176,250		3
O units	$	20-25		1,669,268		3

Total				1,845,518

All nonvested LTIP unit awards are valued as of the grant date and generally vest ratably over a defined service period. Certain nonvested LTIP unit awards vest on an accelerated basis based upon the Company meeting various performance goals. As of June 30, 2013 nonvested awards outstanding were 1.4 million and 0.2 million for the Class O and Class RS units, respectively. The number of Class O units outstanding were not included in the Statements of Changes in Partners’ (Deficit) Capital.

All of the vested units are exercisable and thus convertible into Class A units.

10. Related Party Transactions

In addition to the member advances and notes payable and the repayment there of discussed in Note 7, the Company executed transactions with entities in which one of the Company’s partners had an ownership interest or with one of the Company’s partners directly. Such transactions include automobile, furniture and equipment purchases as well as building operating lease payments, an allocation of insurance expense and reimbursement at the related party’s cost for the use of a private aircraft service by our officers and directors.

The transactions which occurred during the three and six months ended June 30, 2013 and 2012 are outlined below (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2013		2012		2013		2012
	(dollars in thousands)
Tax, utility, insurance and other reimbursement	$	10	$	7		103		19
Rent expense		305		143		448		286
Capital assets acquired		15		289		15		844

Total	$	330	$	439		566		1,149

In the third quarter of 2012, the Company revised its related party capital asset purchasing arrangement. The Company now pays vendors directly for such purchases and pays only an agent fee to the related party. Only the agent fee is recognized as a related party transaction subsequent to August 2012.

Certain employees of the Company provide services to companies outside the consolidated group for which the Company is not reimbursed. These amounts were not material for the three and six months ended June 30, 2013 and 2012, and this practice has been discontinued by the Company.

F-31

QUALITYTECH, LP

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

11. Customer Leases, as Lessor

Future minimum lease payments to be received under non-cancelable operating customer leases (exclusive of recoveries from customers) are as follows for the periods ending December 31 (in thousands):


Period Ending December 31,
2013 (July—December)	$	69,395
2014		108,395
2015		80,797
2016		55,798
2017		38,685
Thereafter		48,335

Total	$	401,405

12. Fair Value of Financial Instruments

ASC Topic 825 requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based upon the application of discount rates to estimated future cash flows based upon market yields or by using other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, fair values are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value amounts.

Short-term instruments: The carrying amounts of cash and cash equivalents, restricted cash, rents and other receivables, prepaid expenses, other assets, accounts payable and accrued liabilities approximate fair value.

Credit facilities and mortgage notes payable: The fair value of the Company’s floating rate mortgage loans was estimated using Level 2 “significant other observable inputs” such as available market information and discounted cash flows analyses based on borrowing rates that the Company believes it could obtain with similar terms and maturities. Because each of these loans were either near maturity as of June 30, 2013 or were entered into during the last 60 days, they did not have interest rates which were materially different than current market conditions and therefore, the fair value of each of the mortgage notes payable approximated the carrying value of each note.

Other debt instruments: The fair value of the Company’s other debt instruments (including capital leases) were estimated in the same manner as the credit facilities and mortgage notes payable above. Similarly, because each of these instruments did not have interest rates which were materially different than current market conditions and therefore, the fair value of each instrument approximated the respective carrying values.

13. Subsequent Event

On August 15, 2013, the Company made a distribution to its members in an aggregate amount of $7.7 million.

F-32

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Partners of QualityTech, LP

We have audited the accompanying consolidated balance sheets of QualityTech, LP and subsidiaries (the Partnership) as of December 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive income, partners’ capital, and cash flows for each of the three years in the period ended December 31, 2012. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule. These consolidated financial statements and financial statement schedule are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of QualityTech, LP and subsidiaries at December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles . Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects, the information set forth therein.

/s/ Ernst and Young, LLP

Kansas City, MO

March 6, 2013, except for footnote 16 as to which the date is August 15, 2013

F-33

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

BALANCE SHEETS

As of December 31, 2012 and 2011 (in thousands)


	December 31,
	2012			2011
ASSETS
Real estate assets
Land	$	24,713		$	20,604
Buildings and improvements		622,506			454,785
Less: Accumulated depreciation		(102,900	)		(74,536	)

		544,319			400,853

Construction in progress		87,609			80,197

Real estate assets, net		631,928			481,050


Cash and cash equivalents		8,232			7,342
Restricted cash		146			1,440
Rents and other receivables, net		11,943			11,345
Acquired intangibles, net		9,145			703
Deferred costs, net		15,062			10,782
Prepaid expenses		1,011			1,069
Other assets, net		7,976			7,325

TOTAL ASSETS	$	685,443		$	521,056


LIABILITIES
Mortgage notes payable	$	171,291		$	271,406
Secured credit facility		316,500			136,500
Capital lease obligations		2,491			1,720
Accounts payable and accrued liabilities		36,001			32,383
Advance rents, security deposits and other liabilities		3,011			4,597
Deferred income		6,745			5,582
Derivative liability		767			4,377
Member advances and notes payable		26,958			24,626

TOTAL LIABILITIES		563,764			481,191

PARTNERS’ CAPITAL

Partners’ capital		121,679			39,865

TOTAL LIABILITIES AND PARTNERS’ CAPITAL	$	685,443		$	521,056

See accompanying notes to financial statements.

F-34

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 31, 2012, 2011 and 2010 (in thousands)


	Year Ended December 31,
	2012			2011			2010
Revenues:
Rental	$	120,758		$	104,051		$	92,800
Recoveries from customers		9,294			12,154			12,506
Cloud and managed services		14,497			12,173			9,054
Other		1,210			2,018			5,795

Total revenues		145,759			130,396			120,155


Operating expenses:

Property operating costs		51,506			57,900			60,408
Real estate taxes and insurance		3,632			2,621			2,378
Depreciation and amortization		34,932			26,165			19,086
General and administrative		35,986			28,470			22,844
Transaction costs		897			—			—
Gain on legal settlement		—			(3,357	)		—
Restructuring charge		3,291			—			—

Total operating expenses		130,244			111,799			104,716

Operating income		15,515			18,597			15,439

Other income and expenses:
Interest income		61			71			233
Interest expense		(25,140	)		(19,713	)		(23,502	)
Other (expense) income, net		(1,151	)		136			22,214

Income (loss) before gain on sale of real estate		(10,715	)		(909	)		14,384
Gain on sale of real estate		948			—			—

Net income (loss)		(9,767	)		(909	)		14,384
Unrealized loss on swap		(766	)		—			—

Comprehensive income (loss)	$	(10,533	)	$	(909	)	$	14,384

See accompanying notes to financial statements.

F-35

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS OF CHANGES IN PARTNERS’ (DEFICIT) CAPITAL


	Partnership Units (in thousands)				Capital Accounts ($ in thousands)
	LP Units		GP Units		LP Units			GP Units			Total

Balance, January 1, 2010		14,749		1	$	293		$	—		$	293
Warrant exercise of Class C units		1,250		—		25,000			—			25,000
Issuance of RS LTIP Units		50		—		—			—			—
Equity-based compensation expense		—		—		332			—			332
Net income		—		—		14,382			2			14,384

Balance, December 31, 2010		16,049		1		40,007			2			40,009

Equity-based compensation expense		—		—		765			—			765
Net loss		—		—		(908	)		(1	)		(909	)

Balance, December 31, 2011		16,049		1		39,864			1			39,865

Issuance of RS LTIP Units		150		—		—			—			—
Equity-based compensation expense		—		—		412			—			412
Net loss		—		—		(9,766	)		(1	)		(9,767	)
Equity investment in Class D units, net of costs		3,680		—		91,935			—			91,935
PIK settlement		2,294		—		—			—			—
Other comprehensive loss		—		—		(766	)		—			(766	)

Balance, December 31, 2012		22,173		1	$	121,679		$	—		$	121,679

See accompanying notes to financial statements.

F-36

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2012, 2011 and 2010 (in thousands)


	Year Ended December 31,
	2012			2011			2010

Cash flow from operating activities:

Net income (loss)	$	(9,767	)	$	(909	)	$	14,384
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization		33,688			25,077			17,948
Amortization of deferred loan costs		3,384			3,441			4,737
Write off of deferred loan costs relating to retired debt		1,434			—			—
Equity-based compensation expense		412			765			332
Change in fair value of derivatives		(307	)		(4,830	)		(2,774	)
Amortization of acquired above and below-market leases, net		—			(960	)		(4,844	)
Gain on debt repurchase		—			—			(22,131	)
(Gain) loss on sale/disposal of property		(948	)		544			—
Other		—			(99	)		82
Changes in operating assets and liabilities
Rents and other receivables, net		(598	)		(2,110	)		93
Accrued interest on member advances		2,332			2,125			1,941
Prepaid expenses		58			(188	)		471
Restricted cash		1,294			(679	)		1,012
Other assets		(783	)		(540	)		(856	)
Accounts payable and accrued liabilities		5,322			2,574			2,349
Advance rents, security deposits and other liabilities		(1,586	)		(163	)		600
Deferred income		1,163			327			(67	)

Net cash provided by operating activities		35,098			24,374			13,277

Cash flow from investing activities:
Change in restricted cash		—			—			50,892
Proceeds from sale of property		1,549			—			—
Acquisition of Sacramento facility		(63,250	)		—			—
Additions to property and equipment		(133,226	)		(118,746	)		(107,466	)

Net cash used for investing activities		(194,927	)		(118,746	)		(56,574	)

Cash flow from financing activities:
Credit facility proceeds, net		180,000			54,000			82,500
Warrant exercise		—			—			25,000
Debt proceeds		120,000			50,000			25,000
Debt repayment		(216,637	)		—			(108,485	)
Payment of swap liability		(4,070	)		(4,120	)		(7,884	)
Payment of deferred financing costs		(6,243	)		(1,920	)		(5,577	)
Principal payments on capital lease obligation		(790	)		(76	)		—
Scheduled mortgage principal debt repayments		(3,476	)		(3,215	)		(4,944	)
Equity proceeds, net of costs		91,935			—			—

Net cash provided by financing activities		160,719			94,669			5,610

Net increase (decrease) in cash and cash equivalents		890			297			(37,687	)
Cash and cash equivalents, beginning of period		7,342			7,045			44,731

Cash and cash equivalents, end of period	$	8,232		$	7,342		$	7,045

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest (excluding deferred financing costs)	$	21,291		$	18,804		$	20,198

Accrued capital additions	$	18,789		$	20,493		$	14,066

See accompanying notes to financial statements.

F-37

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business

QualityTech, LP (the “Operating Partners” or the “Company”) was formed in October 2009 as a Delaware limited partnership among Chad L. Williams, the Company’s Chairman and Chief Executive Officer, certain other partners and a subsidiary of General Atlantic LLC to own and operate data center properties and the managed service business previously owned by entities controlled by Chad L. Williams.

QualityTech GP, LLC (the “General Partner”) is the Company’s general partner. The General Partner was formed in October 2009 as a Delaware limited liability company and is wholly owned by Chad L. Williams. Certain of the Company’s partners, including the General Partner, are parties to a unitholders agreement that provides for certain matters regarding transfer of partnership interests in the Company, the Company’s governance and the Company’s ownership, including requiring specified approvals for certain specified major decisions.

2. Summary of Significant Accounting Policies

Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts and deferred tax assets; and the valuation of derivatives, fixed assets, acquired intangible assets and certain accruals.

Real Estate Assets —Real estate assets are reported at cost. All capital improvements for the income-producing properties that extend their useful life are capitalized to individual property improvements and depreciated over their estimated useful lives. Depreciation is generally provided on a straight-line basis over 40 years from the date the property was placed in service. Property improvements are depreciated on a straight-line basis over the life of the respective improvement ranging from 20 to 40 years from the date the components were placed in service. Leasehold improvements are depreciated over the lesser of 20 years or through the end of the respective life of the lease. Repairs and maintenance costs are expensed as incurred. The aggregate depreciation charged to related operations was $29.8 million, $22.1 million and $15.1 million for the years ended December 31, 2012, 2011 and 2010, respectively.

F-38

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

The Company capitalizes certain development costs, including internal costs incurred in connection with development. The capitalization of costs during the construction period (including interest and related loan fees, property taxes and other direct and indirect costs) begins when development efforts commence and ends when the asset is ready for its intended use. Capitalization of such costs, excluding interest, aggregated to $6.7 million, $6.1 million and $1.6 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Interest is capitalized during the period of development by first applying the Company’s actual borrowing rate on the related asset and second, to the extent necessary, by applying the Company’s weighted average effective borrowing rate to the actual development and other costs expended during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $2.2 million, $2.6 million and $4.0 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Acquisition of Real Estate —Purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance with the accounting requirements of ASC 805, Business Combinations, which requires the recording of net assets of acquired businesses at fair value. The fair value of the real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, building and improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases and value of customer relationships.

Intangible assets and liabilities include acquired above-market leases, below-market leases, in-place leases and customer relationships.

Acquired above-market leases are amortized on a straight-line basis as a decrease to rental revenue over the remaining term of the underlying leases. Amortization of acquired above-market leases, including write-offs for terminated leases, totaled $0.2 million for the year ended 2010, with no material amortization during the years ended December 31, 2012 or 2011.

Acquired below-market leases are amortized on a straight-line basis as an increase to rental revenue over the remaining term of the underlying leases, including fixed option renewal periods, if any. Accretion of acquired below-market leases, including write-offs for terminated leases, totaled $1.0 million and $5.1 million, for the years ended December 31, 2011 and 2010, respectively, with no material accretion for the year ended December 31, 2012.

Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Amortization of acquired in-place leases, including write-offs for terminated leases, totaled $0.1 million and $0.2 million, for the years ended December 31, 2011 and 2010, respectively, with no material accretion for the year ended December 31, 2012.

Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. Amortization of acquired customer relationships,

F-39

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

including write-offs for terminated leases, totaled $0.6 million, $1.2 million and $2.0 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Should a customer terminate its lease, the unamortized portions of the acquired above-market or below-market leases, acquired in-place lease costs and acquired customer relationships associated with that customer are written off to amortization expense or rental revenue, as indicated above.

Impairment of Long-Lived and Intangible Assets —Whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable, the Company assesses whether there has been an impairment in the value of long-lived assets. Recoverability of assets to be held and used is generally measured by comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset group. If the net carrying value of the asset exceeds the value of the undiscounted cash flows, the fair value of the asset is assessed and may be considered impaired. An impairment loss is recognized based on the excess of the carrying amount of the impaired asset over its fair value. No impairment losses were recorded for any of the years ended December 31, 2012, 2011 and 2010, respectively.

Deferred Costs —Deferred costs, net on the Company’s balance sheets include both financing costs and leasing costs.

Deferred financing costs represent fees and other costs incurred in connection with obtaining debt and are amortized over the term of the loan and are included in interest expense. Amortization of the deferred financing costs was $3.4 million, $3.4 million and $4.7 million for the years ended December 31, 2012, 2011 and 2010, respectively. During the year ended December 31, 2012, the Company wrote off unamortized financing costs of $1.4 million, primarily relating to loans secured by the Richmond and Suwanee data center facilities that were repaid during the first quarter of 2012. Deferred financing costs, net of accumulated amortization are as follows:


	December 31,
	2012			2011
	(dollars in thousands)
Deferred financing costs	$	23,713		$	17,470
Accumulated amortization		(16,857	)		(12,039	)

Deferred financing costs, net	$	6,856		$	5,431

F-40

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

Deferred leasing costs consist of external fees and internal costs incurred in the successful negotiations of leases and are deferred and amortized over the terms of the related leases on a straight-line basis. If an applicable lease terminates prior to the expiration of its initial term, the carrying amount of the costs are written off to amortization expense. Amortization of deferred leasing costs totaled $3.4 million, $2.3 million and $1.5 million for the years ended December 31, 2012, 2011 and 2010, respectively. Deferred leasing costs, net of accumulated amortization are as follows:


	December 31,
	2012			2011
	(dollars in thousands)

Deferred leasing costs		$18,139			$11,936
Accumulated amortization		(9,933	)		(6,585	)

Deferred leasing costs, net	$	8,206		$	5,351

Deferred Income —Deferred income generally results from non-refundable charges paid by the customer at lease inception to prepare their space for occupancy. The Company records this initial payment, commonly referred to as set-up fees, as a deferred income liability which amortizes into rental revenue over the term of the related lease on a straight-line basis. Deferred income was $6.8 million and $5.6 million as of December 31 2012 and 2011, respectively. Additionally, $4.3 million $3.0 million and $2.7 million were amortized into revenue for the years ended December 31, 2012, 2011 and 2010, respectively.

Interest Rate Derivative Instruments —The Company utilizes derivatives to manage its interest rate exposure. Prior to 2012, the derivative instruments entered into did not meet the criteria for hedge accounting and, accordingly, the Company reported the fair value of the derivative on its balance sheets with the change in the fair value of the derivative reported in interest expense in the accompanying Statements of Operations and Comprehensive Income (Loss). During February 2012, the Company entered into interest rate swaps with a notional amount of $150 million which did qualify for hedge accounting. The Company performs an assessment of hedging effectiveness, and any ineffectiveness is recorded in interest expense. There was no ineffectiveness for the period ended December 31, 2012. The Company has accordingly reflected the change in the fair value of the instrument in Other Comprehensive Income (Loss). Amounts are reclassified out of other comprehensive income as the hedged item is recognized in earnings.

Equity-based Compensation —The Company may issue Class RS units of limited partnership interest (“Class RS Units”) and Class O units of limited partnership interest (“Class O Units”) to an affiliated company, QualityTech Employee Pool, LLC (“Employee Pool”), on behalf of employees and non-employee directors who are granted an award under the QualityTech, LP 2010 Equity Incentive Plan. All equity-based compensation is measured at fair value on the grant date or date of modification, as applicable, and recognized in earnings over the requisite service period. Depending upon the settlement terms of the awards, all or a portion of the fair value of equity-based awards may be presented as a liability or as equity in the consolidated balance sheets. Equity-based compensation

F-41

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

costs associated with the portion of awards classified as equity are measured based upon their estimated fair value on the date of grant or modification. Equity-based compensation costs associated with the portion of awards classified as liabilities are measured based upon their estimated fair value at the grant date and re-measured as of the end of each period. The Company recorded equity-based compensation expense net of repurchased awards acquired of $0.4 million, $0.8 million and $0.3 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Rental Revenue —The Company, as a lessor, has retained substantially all of the risks and benefits of ownership and accounts for its leases as operating leases. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases, which commences when control of the space has been provided to the customer. The amount of the straight-line rent receivable on the balance sheets included in rents and other receivables, net was $2.4 million and $2.4 million as of December 31, 2012 and 2011, respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed above.

Allowance for Uncollectible Accounts Receivable —Rents receivable are recognized when due and are carried at cost, less an allowance for doubtful accounts. The Company records a provision for losses on rents receivable equal to the estimated uncollectible accounts, which is based on management’s historical experience and a review of the current status of the Company’s receivables. As necessary, the Company also establishes an appropriate allowance for doubtful accounts for receivables arising from the straight-lining of rents. The aggregate allowance for doubtful accounts was $0.5 million and $0.3 million as of December 31, 2012 and 2011, respectively.

Capital Lease —The Company evaluates leased real estate to determine whether the lease should be classified as a capital or operating lease. One of the following four characteristics must be present to classify a lease as a capital lease: (i) the lease transfers ownership of the property to the lessee by the end of the lease term, (ii) the lease contains a bargain purchase option, (iii) the lease term is equal to 75% or more of the estimated economic life of the leased property or (iv) the net present value of the lease payments are at least 90% of the fair value of the leased property.

In 2011, the Company entered into capital leases for various equipment. The outstanding liabilities for the capital leases were $2.5 million and $1.7 million as of December 31, 2012 and 2011, respectively. Depreciation related to the associated assets is included in depreciation and amortization expense in the Statements of Operations and Comprehensive Income (Loss).

Recoveries from Customers —Certain customer leases contain provisions under which the customers reimburse the Company for a portion of the property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling-related charges. The reimbursements are included in revenue as recoveries from customers in the Statements of Operations and Comprehensive Income (Loss) in the period the applicable expenditures are incurred. Certain customer leases are structured to provide a fixed monthly billing amount that includes an estimate of various operating expenses, with all revenue from such leases included in rental revenues.

Cloud and Managed Services Revenue —The Company may provide both its cloud product and access to its managed services to its customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided.

F-42

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

Segment Information —The Company manages its business as one operating segment and one reportable segment consisting of a portfolio of investments in data centers located in the United States.

Restructuring —In March 2012, the Company decided to consolidate its New York area operations into the Jersey City data center facility. The Company transferred certain customers from the New York facility to the Jersey City facility. As of December 31, 2012, the Company had completed the consolidation of its operations into the Jersey City facility and recognized $3.3 million in expense primarily related to terminating the New York facility lease.

Tenant Concentrations —As of December 31, 2012, the Company was receiving approximately 8% of its monthly rental revenue from one customer. No other customers exceeded 5% of total monthly rental revenue. As of December 31, 2012, no customers exceeded 5% of total accounts receivable.

Income Taxes— The Operating Partnership is obligated to comply with Internal Revenue Service real estate investment trust (“IRS REIT”) tax regulations in accordance with the unitholders agreement. In order to comply with this obligation, the Company elected for one of its existing subsidiaries to be taxed as a taxable REIT subsidiary under the IRS REIT tax regulations. The taxable REIT subsidiary is allocated income and expense based on IRS REIT tax regulations.

The taxable REIT subsidiary offsets a valuation allowance against deferred tax assets if, based on management’s assessment of operating results and other available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The taxable subsidiary did not generate taxable income for the years ended December 31, 2012, 2011 or 2010. Accordingly, no provision for income taxes was recorded nor was an income tax benefit recorded for the last three years. Due to the lack of sufficient historical evidence to indicate it is more likely than not that the deferred tax assets will be utilized, the valuation allowance relating to deferred tax assets continued to be recorded at December 31, 2012. The change in valuation allowance during 2012 was an increase of $1.7 million, primarily attributable to an increase in net operating loss carryforwards.

F-43

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

Temporary differences and carryforwards which give rise to the deferred tax assets and liabilities are as follows:


	For the year ended December 31,
	2012			2011			2010
	(in thousands)
Deferred tax liabilities
Property and equipment	$	(4,852	)	$	(3,533	)	$	(1,597	)
Other		(551	)		(287	)		(162	)

Gross deferred tax liabilities		(5,403	)		(3,820	)		(1,759	)

Deferred tax assets
Net operating loss carryforwards		6,694			3,410			1,772
Deferred revenue and set-up charges		467			372			723
Derivative liability		—			81			152
Other		113			101			358

Gross deferred tax assets		7,274			3,964			3,005

Net deferred tax assets		1,871			144			1,246
Valuation allowance		(1,871	)		(144	)		(1,246	)

Net deferred	$	—		$	—		$	—

The taxable REIT subsidiary currently has $17.9 million of net operating loss carryforwards related to federal income taxes that expire in 17-20 years. The taxable REIT subsidiary also has $12.6 million of net operating loss carryforwards relating to state income taxes that expire in 12-20 years.

As of December 31, 2012 and 2011, the Company had no uncertain tax positions. If the Company incurs any interest or penalties on tax liabilities from significant uncertain tax positions, those items will be classified as interest expense and general and administrative expense, respectively, in the Statements of Operations and Comprehensive Income (Loss). For the years ended December 31, 2012, 2011 and 2010, the Company had no such interest or penalties.

The Company is not currently under examination by the Internal Revenue Service.

Fair Value Measurements —ASC Topic 820 emphasizes that fair-value is a market-based measurement, not an entity-specific measurement. Therefore, a fair-value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, a fair-value hierarchy is established that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

F-44

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the level in the fair-value hierarchy within which the entire fair- value measurement falls is based on the lowest level input that is significant to the fair-value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Financial assets and liabilities measured at fair value in the financial statements on a recurring basis consist of the Company’s derivatives. The fair values of the derivatives are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded as of December 31, 2012 and December 31, 2011 that the fair value associated to “significant unobservable inputs” for risk of non-performance was insignificant to the overall fair value of the derivative agreements and, as a result, has determined that the relevant inputs for purposes of calculating the fair value of the derivative agreements, in their entirety, were based upon “significant other observable inputs.” The Company determined the fair value of derivatives using Level 2 inputs. These methods of assessing fair value result in a general approximation of value, and such value may never be realized.

Assets and liabilities measured at fair value in the financial statements on a nonrecurring basis consist of the Company’s acquisition. The fair value of the acquisition was determined using Level 3 inputs.

Recent Accounting Pronouncements —In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. This ASU amends the FASB Accounting Standards Codification (Codification) to allow an entity the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments to the Codification in the ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income and should be applied retrospectively.

The FASB then issued ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. The amendments to the Codification in ASU No. 2011-12 are effective at the same time as the amendments in ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, so that entities will not be

F-45

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

required to comply with the presentation requirements in ASU No. 2011-05 that ASU No. 2011-12 is deferring. In order to defer only those changes in ASU No. 2011-05 that relate to the presentation of reclassification adjustments, the paragraphs in ASU No. 2011-12 supersede certain pending paragraphs in ASU No. 2011-05.

While FASB is considering the operational concerns about the presentation requirements for reclassification adjustments and the needs of financial statement users for additional information about reclassification adjustments, entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements.

During 2011, FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU represents the converged guidance of FASB and IASB (the Boards) on fair value measurement. The collective efforts of the Boards and their staffs, reflected in ASU 2011-04, have resulted in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term “fair value.” The Boards have concluded that the common requirements will result in greater comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRS. The amendments to the FASB ASU (Codification) in this ASU are to be applied prospectively.

The adoption of these ASUs did not have a material effect on our financial statements.

3. Acquisitions of Real Estate

In December 2012, the Company purchased a data center facility located in Sacramento, California. This facility was previously and continues to operate as a data center with approximately 200 customers. The Company paid approximately $63.3 million for the data center facility. The allocation of the purchase price is subject to completion of related valuation of the assets acquired. The following table summarizes the consideration for the Sacramento facility and the preliminary allocation of the fair value of assets acquired as of December 31, 2012:


	Sacramento facility		Weighted average useful life
	(in thousands)
Working capital	$	—
Buildings		52,753	40
Land		1,485
Customer relationship		5,029	4
In-place leases		3,202	2
Above-market leases, net		781	1

Total purchase price	$	63,250

F-46

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

As a result of this acquisition, the assets and liabilities as well as the results of operations of the purchased data center facility have been included in the Company’s Consolidated Balance Sheet and Consolidated Statement of Operations and Comprehensive Income (Loss) since the date of the acquisition.

4. Real Estate Assets and Construction in Progress

The following is a summary of properties owned by the Company as of December 31, 2012 and 2011:

As of December 31, 2012


Property Location	Land		Buildings and Improvements		Construction in Progress		Total Cost
	(dollars in thousands)

Owned Properties:
Suwanee, Georgia	$	3,521	$	103,438	$	3,572	$	110,531
Atlanta, Georgia (Metro)		15,314		263,192		6,658		285,164
Santa Clara, California*		—		83,536		245		83,781
Richmond, Virginia		2,179		71,629		71,986		145,794
Sacramento, California		1,485		52,753		—		54,238
Miami, Florida		1,777		27,111		—		28,888
Lenexa, Kansas		437		54		3,260		3,751
Wichita, Kansas		—		1,408		—		1,408

		24,713		603,121		85,721		713,555


Leased Properties:
Jersey City, New Jersey		—		18,666		1,888		20,554
Overland Park, Kansas		—		719		—		719

		—		19,385		1,888		21,273

Total	$	24,713	$	622,506	$	87,609	$	734,828

*	Owned facility subject to long-term ground sublease.

F-47

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

As of December 31, 2011


Property Location	Land		Buildings and Improvements		Construction in Progress		Total Cost
	(dollars in thousands)

Owned Properties:
Suwanee, Georgia	$	3,521	$	100,038	$	230	$	103,789
Atlanta, Georgia (Metro)		12,689		220,207		17,174		250,071
Santa Clara, California*		—		78,181		456		78,637
Richmond, Virginia		2,180		9,135		57,687		69,002
Miami, Florida		1,777		26,773		—		28,550
Topeka, Kansas		—		795		—		795
Lenexa, Kansas		437		59		3,113		3,609
Wichita, Kansas		—		1,279		—		1,279

		20,604		436,467		78,660		535,731


Leased Properties:
Jersey City, New Jersey		—		17,562		1,537		19,099
New York, New York		—		81		—		81
Overland Park, Kansas		—		675				675

		—		18,318		1,537		19,855

Total	$	20,604	$	454,785	$	80,197	$	555,586

*	Owned facility subject to long-term ground sublease.

5. Credit Facility and Mortgages Payable

Below is a listing of our outstanding debt as of December 31, 2012 and 2011 (in thousands):


	December 31,
	2012		2011
Secured Credit Facility	$	316,500	$	136,500
Atlanta Metro Equipment Loan		20,931		22,884
Suwanee Loans		—		114,999
Santa Clara Loans		—		52,367
Miami Loan		26,048		26,800
Suwanee Land Loan		1,600		1,600
Lenexa Loan		2,712		2,756
Santa Clara Bridge Loan		50,000		—
Richmond Credit Facility		70,000		—
Richmond Bridge Loan		—		50,000

Total	$	487,791	$	407,906

F-48

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

(a) Secured Credit Facility

On September 28, 2010, the Company entered into a revolving credit facility with KeyBank National Association (the “Secured Credit Facility”) and various other lenders with a total borrowing capacity of $125 million. The Secured Credit Facility allowed for a swing loan in the amount of $10 million and also included an accordion feature that allowed the Company to increase the size of the Secured Credit Facility up to $250 million. The Secured Credit Facility had a stated maturity date of September 28, 2013 and was secured by the Company’s Atlanta Metro data center. During 2011, the Company exercised the accordion feature and increased the borrowing capacity under the Secured Credit Facility to $170 million.

On February 8, 2012, the Company amended and extended the Secured Credit Facility to increase its borrowing capacity by $270 million and extend the maturity date to September 28, 2014. The amended and extended Secured Credit Facility was secured by the Company’s Atlanta Metro and Suwanee data center facilities. Of the $440 million Secured Credit Facility, $125 million was a term loan and $315 million was a revolving credit facility. The amended and extended Secured Credit Facility also provided a $100 million accordion feature.

Concurrently with the closing of the amended and extended Secured Credit Facility, the Company entered into an interest rate cap agreement with a notional amount of $150 million relating to the amended and extended Secured Credit Facility. This instrument provided a one month LIBOR cap of 2.05% and had an effective date of February 8, 2012 and a termination date of February 8, 2013. The Company also entered into two interest rate swaps with an aggregate $150 million notional amount and an effective date of February 8, 2013 to succeed the interest rate caps. These interest rate swaps had a maturity date of September 28, 2014. These interest rate swaps provide for a fixed one month LIBOR rate of 0.5825% from February 8, 2013 through September 28, 2014 and qualified for cash flow hedge accounting.

Borrowings under the amended and extended Secured Credit Facility were utilized to pay off the Richmond Loan and the Suwanee Loans (each as defined below) and retire the associated interest rate swaps. The swaps and loans were retired at a value which approximated the carrying value as of December 31, 2011. The Company used the remaining capacity on the amended and extended Secured Credit Facility to fund ongoing operations, expansions, developments and acquisitions.

The amended and extended Secured Credit Facility required monthly interest payments and required the Company to comply with various quarterly covenant requirements relating to debt yield, debt service coverage ratio, fixed charge, leverage ratio and tangible net worth and various other operational requirements. In connection with the amended and extended Secured Credit Facility, the Company obtained an additional $3.5 million letter of credit.

As detailed in Note 16, the amended and extended Secured Credit Facility was prepaid in full with proceeds of a new unsecured credit facility entered into by the Company on May 1, 2013.

(b) Suwanee Loans

As of December 31, 2011, the Company had outstanding an $80 million mortgage loan secured by the Suwanee property and a $15 million junior mezzanine loan, together with a $20 million earn out advance, which provided an aggregate total loan amount of approximately $115 million (collectively,

F-49

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

the “Suwanee Loans”). The Suwanee Loans were repaid in February 2012 with proceeds of the amended and extended Secured Credit Facility.

In 2011, the Company entered into a $1.6 million loan agreement for the purchase of land adjacent to the Suwanee facility (the “Suwanee Land Loan”). The interest rate on the loan is 10% per annum, and the loan matures on September 26, 2013.

As discussed in Note 16, the Company repaid the outstanding balance of the Suwanee Land Loan in June 2013.

(c) Atlanta Metro Equipment Loan —On April 9, 2010, the Company entered into a $25 million loan to finance equipment related to an expansion project at the Company’s Atlanta Metro data center (the “Atlanta Metro Equipment Loan”). The loan originally featured monthly interest-only payments, but now requires monthly interest and principal payments. The loan bears interest at 6.85% per annum, amortizes over ten years and matures on June 1, 2020.

(d) Santa Clara Loans —As of December 31, 2012, the Company had outstanding two separate mortgage loans related to the Company’s Santa Clara data center (collectively the “Santa Clara Loans”). The Santa Clara Loans originally totaled $54.4 million. The Santa Clara Loans required monthly interest-only payments through May 2009, at which time monthly principal and interest payments commenced based on a 25-year amortization schedule. The Santa Clara Loans had a stated maturity date of November 9, 2012. On that date, the Company paid off the remaining balance of the Santa Clara Loans and substantially replaced a portion of the loan balance on a temporary basis with the Santa Clara Bridge Loan outlined below.

(e) Miami Loan —In March 2008, the Company obtained a mortgage loan with a maximum borrowing capacity of $32.8 million secured by the Company’s Miami data center (“Miami Loan”). In October 2009, the Company amended the Miami Loan to extend the maturity date to December 31, 2010, with two options to extend for consecutive one-year periods at the Company’s option, subject to meeting certain debt service requirements. The Company subsequently exercised both of those options. The amendment also modified the interest rate so that it bore interest at the greater of 7% per annum or prime plus 1.0% through December 31, 2012. In addition, the amendment released certain collateral owned by a member of the Company. The Miami Loan was personally guaranteed by Chad L. Williams for up to $15.5 million of the outstanding balance. As discussed in Note 16, this loan was repaid with proceeds of the unsecured credit facility the Company entered into on May 1, 2013.

(f) Richmond Bridge Loan —On October 18, 2011, the Company entered into a $50 million bridge loan with Key Bank (the “Richmond Loan”). The Richmond Loan had an interest rate of LIBOR plus 6.00% and a maturity date of October 18, 2012. As discussed in Note 16, this loan was repaid with proceeds of the unsecured credit facility the Company entered into on May 1, 2013.

(g) Lenexa Loan —In June 2011, the Company entered into a $2.8 million seller financing to acquire the Lenexa facility (the “Lenexa Loan”). The interest rate on this loan is 5.43% per annum, and it matures on May 26, 2013. As discussed in Note 16, the loan was repaid at maturity.

(g) Richmond Credit Facility —In December 2012, the Company entered into a credit facility secured by the Company’s Richmond data center (the “Richmond Credit Facility”). This facility had a total borrowing capacity of $80 million at December 31, 2012, which was increased to $100 million in

F-50

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

January 2013. This facility also includes an accordion feature that allows the Company to increase the size of the credit facility up to $125 million under certain circumstances. This facility bears interest at variable rates ranging from LIBOR plus 4.0% to LIBOR plus 4.5% (rate at December 31, 2012 was LIBOR plus 4.25%, or 4.46% per annum) based on the Company’s overall leverage ratio. This facility has a stated maturity date of December 18, 2015 with an option to extend for one additional year.

(g) Santa Clara Bridge Loan —In November 2012, the Company entered into a $50 million bridge loan with Key Bank (the “Santa Clara Bridge Loan”). The loan had an interest rate of LIBOR plus 3.50% and a maturity date of February 11, 2013 with a three month extension option, which the Company exercised. As discussed in Note 16, this loan was repaid with proceeds of the unsecured credit facility the Company entered into on May 1, 2013.

The weighted average interest rate of the Company’s secured debt, which includes the effect of deferred financing costs and swap derivatives, was 5.13% per annum as of December 31, 2012.

The annual remaining principal payment requirements as of December 31, 2012 per the contractual maturities and excluding extension options are as follows (in thousands):


2013	$	81,730
2014		317,722
2015		71,065
2016		897
2017		717
Thereafter		15,660

Total	$	487,791

As of December 31, 2012, the Company was in compliance with all of its covenants.

6. Interest Rate Derivative Instruments

In connection with the Suwanee Loans, the Company entered into three separate interest rate swap agreements with notional values totaling $95 million that effectively fixed the variable portion of the interest rate at 5.29% per annum, which were set to expire on October 15, 2012. The Company subsequently entered into an interest rate swap agreement with a notional value of $20 million that effectively fixed a variable portion of the interest rate on the Suwanee Loans at 5.13% per annum, which swap was scheduled to expire on October 15, 2012. These swaps were settled in connection with the amendment and restatement of the Credit Facility on February 8, 2012, which is outlined in Note 5. As discussed in Note 5, the Company entered into new interest rate cap and swap agreements with a notional amount of $150 million. Derivatives that were entered into prior to February 2012 were not accounted for as hedges. Subsequent to February 2012, derivatives were designated as cash flow hedges.

The Company recognized realized and unrealized gains in the years ended December 31, 2012, 2011 and 2010 based on the change in fair value of these swaps. The realized and unrealized gains relating to these instruments, which were included in interest expense in the accompanying Statements of Operations and Comprehensive Income (Loss), aggregated to $0.3 million, $4.8 million and $2.8 million for the years ended December 31, 2012, 2011 and 2010, respectively.

F-51

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

As of December 31, 2012 and 2011, the Company recorded a derivative liability of $0.8 million and $4.3 million, respectively. These values were determined using Level 2 inputs within the valuation hierarchy and will be reclassified into earnings through the date the contracts mature.

7. Member Advances and Notes Payable

In October 2009, the Company amended and restated its outstanding loans with Chad L. Williams and entities controlled by Chad L. Williams into a loan in the original principal amount of $20.4 million (the “Member Advances”). The Member Advances are unsecured and have a maturity date of the earliest of December 31, 2013 or upon certain specified transactions. The Member Advances are subordinate in priority to the Company’s mortgage notes payable. Interest under the Member Advances accrues monthly at the rate of 9% per annum and is added to the principal balance of the Member Advances if not paid. The balance of the Member Advances is separately disclosed on the face of the financial statements. On May 1, 2013, the lender under the Member Advances exercised an option to purchase an additional $10 million Class D units in exchange for the cancellation of $10 million of the outstanding balance under the Member Advances.

As discussed in Note 16, the Company repaid the remaining outstanding balance of the member advances on June 28, 2013.

8. Commitments and Contingencies

The Company previously entered into a master service agreement with a third party Internet service provider. The Company was not receiving industry-standard quality of Internet and connectivity services and terminated the contract. The third party Internet service provider challenged the grounds for the Company’s termination and sued the Company in Georgia state court seeking the fees the Company owed prior to the termination plus a termination fee equal to the amount the Company would have paid had it not terminated the agreement. The Georgia state court ruled to limit damages, if any, to six months of unpaid fees . The Company has established an accrual associated with this matter which is recorded as a component of accrued liabilities.

9. Partners’ Capital and Incentive Compensation Plans

The General Partner has the full power and authority to do all the things necessary to conduct the business of the Operating Partnership. At December 31, 2012, the General Partner had no balance in its reported capital account. As of December 31, 2012, the Company had 7.27 million Class A units, 11.04 million Class C units, and 3.68 million Class D units outstanding. As of December 31, 2011, the Company had 7.25 million Class A units and 8.75 million Class C units outstanding.

F-52

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

The Class A Units are redeemable at fair value at any time on or after one year following the later of the first date on which the common shares of the General Partner (or its successor general partner) are publicly traded or the date of initial issuance of the units. The General Partner may, at its sole discretion, elect to assume and satisfy the redemption amount with cash or its shares.

Class C Units and Class D Units are preferred units that are pari passu with each other and senior to the Class A Units, Class RS Units and Class O Units. Class C Units and Class D Units generally have the same designation, preferences, rights, powers and duties as Class A Units; however, in accordance with the provisions of the Company’s partnership agreement (the “Partnership Agreement”), upon certain liquidity events (as defined in the Partnership Agreement), Class C Units and Class D Units rank senior to Class A units and are entitled to a liquidation preference. In addition, immediately prior to the consummation of an initial public offering, Class C Units and Class D Units automatically convert into Class A units on the terms and conditions set out in the Partnership Agreement.

In October 2009, 7.5 million Class A Units were issued to Chad L. Williams and Mark D. Waddington in exchange for the contribution to the Operating Partnership of their ownership interests in various limited liability companies. Immediately following such issuance, 7.5 million Class C Units were issued to General Atlantic REIT, Inc., a subsidiary of General Atlantic, in exchange for a contribution of $150 million (initially representing a 50% ownership interest in the Company) and a warrant to purchase an additional 1.25 million Class C Units at $20 per unit (the “Warrant”). The Operating Partnership subsequently repurchased 250,000 Class A Units held by Chad Williams and Mark Waddington for $5 million and, in April 2010, issued 1.25 million Class C Units to General Atlantic in exchange for $25 million upon exercise of its Warrant. On September 28, 2012, the Company issued an additional 2.4 million Class D Units to General Atlantic in exchange for a contribution of $60 million. At the same time, the Company issued an additional 2.3 million Class C Units to General Atlantic to settle the amount owed to General Atlantic under the paid-in-kind feature of the Class C Units, which simultaneously was eliminated from the terms of the Class C Units. In December 2012, the Company issued an additional 1.2 million Class D Units to General Atlantic for a contribution of $30 million. Accordingly, General Atlantic’s aggregate economic ownership interest increased to approximately 67% (excluding outstanding LTIP Units) at December 31, 2012. As a result of the above transactions, Chad L. Williams and Mark D. Waddington indirectly or directly in aggregate owned 7.25 million Class A Units, and General Atlantic owned 14.64 million Class C and Class D Units in the Operating Partnership as of December 31, 2012. In addition to the above transaction, during the second half of 2012, certain directors and officers of the Company contributed an aggregate of $2.0 million in exchange for 80,000 Class D Units and 21,250 RS Units were converted to Class A Units.

Net income and net loss of the Operating Partnership are allocated with respect to each fiscal year of the Operating Partnership in accordance with the terms of the Partnership Agreement. Prior to the September 2012 Class D Unit and Class C Unit issuance noted above, due to the paid-in-kind feature of the Class C Units and subject to certain special allocations, net income was generally first allocated to the Class C Units to the extent of their rights to a cumulative preferred return of 9%, with

F-53

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

the remaining balance allocated to the Class A Units. Net loss for the nine months ended September 30, 2012 was allocated to the Class A units in accordance with the Partnership Agreement. Subsequent to September 30, 2012, however, both net income and net loss were proportionally allocated to Class A, Class C, and Class D units.

General Atlantic and Chad L. Williams the Company’s Chairman and Chief Executive Officer, each is a party to a separate registration rights agreement. Under those registration rights agreements, beginning six months after the completion of an initial public offering, General Atlantic and Mr. Williams have demand rights to require the Company to file a new registration statement and prospectus providing for the sale by such holders of some or all of their shares.

The Company sponsors the 2010 Equity Incentive Plan for its employees pursuant to which the Company may grant awards from time to time. Awards generally vest over a defined service period. The following is a summary of award activity under the 2010 Equity Incentive Plan and related information for 2012, 2011 and 2010:


	Number of Class O units			Weighted- average exercise price		Number of Class RS units		Weighted- average price

Outstanding at January 1, 2010		—		$	—		—	$	—


Granted		717,443		$	20.00		50,000	$	—
Exercised		—			—		—		—
Released from restriction		—			—		—		—
Cancelled/Expired		(125,375	)		—		—		—

Outstanding at December 31, 2010		592,068		$	20.00		50,000	$	—


Granted		114,676		$	20.00		—	$	—
Exercised		—			—		—		—
Released from restriction		—			—		—		—
Cancelled/Expired		(7,376	)		—		—		—

Outstanding at December 31, 2011		699,368		$	20.00		50,000	$	—


Granted		908,925		$	25.00		150,000	$	—
Exercised		—			—		—		—
Released from restriction		—			—		21,250		—
Cancelled/Expired		(136,350	)		—		—		—

Outstanding at December 31, 2012		1,471,943		$	23.09		178,750	$	—

The Class RS Units and Class O Units are pari passu with Class A units. To estimate the fair value of awards on the grant date or modification date as appropriate, the Company uses a lattice valuation model. Historical stock prices of comparable companies were used to estimate expected volatility. The risk-free rate, using U.S. Treasury yield curves in effect at the time of grant, is selected based on the expected term of each group. The Company does not expect future forfeitures to be material.

F-54

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

The assumptions and fair values for Class O and Class RS units granted for the years ended December 31, 2012 and 2011 is included in the following table on a per unit basis, respectively:


	2012			2011			2010

Fair value of Class RS Units granted	$	7.15		$	6.95		$	8.49
Fair value of Class O Units granted	$	1.99		$	2.94		$	5.16
Expected term (years)		4			4			4
Expected volatility		55	%		60	%		85	%
Dividend yield		0	%		0	%		0	%
Risk-free interest rates		0.17	%		0.61	%		1.04	%

The following table summarizes information about awards outstanding as of December 31, 2012.


	Awards Outstanding
	Exercise prices	Awards outstanding		Weighted average remaining contractual life (years)
Class RS Units	$ —		178,750	3
Class O Units	$20-25		1,471,943	3

Total			1,650,693

All nonvested awards are valued (i) as of the grant date and generally vest ratably over a defined service period, or (ii) based upon the Company meeting various performance goals. As of December 31, 2012, nonvested awards outstanding were 1,261,536 and 175,607 for the Class O and Class RS Units, respectively. As of December 31, 2011, nonvested awards outstanding were 552,487 and 33,750 for the Class O and Class RS Units, respectively.

As of December 31, 2012 vested awards were 210,407 and 3,143 for the Class O and Class RS Units, respectively. As of December 31, 2011 vested awards were 146,881 and 16,250 for the Class O and Class RS Units, respectively. All of the vested shares are exercisable and thus convertible into Class A Units. The number of Class O Units outstanding were not included in the Statements of Changes in Partners’ (Deficit) Capital.

10. Related Party Transactions

In addition to the member advances and notes payable and the repayment thereof discussed in Note 7, the Company executed transactions with entities in which one of the Company’s partners had an ownership interest or with one of the Company’s partners directly. Such transactions include automobile, furniture and equipment purchases as well as building operating lease payments, an allocation of insurance expense, and reimbursement at the related party’s cost for the use of a private aircraft service by our officers and directors.

F-55

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

The transactions which occurred during the years ended December 31, 2012, 2011 and 2010 are outlined below (in thousands):


	December 31,
	(in thousands)
	2012		2011		2010

Tax, utility, insurance and other reimbursement	$	234	$	248	$	—
Rent expense		572		572		575
Capital assets acquired		568		1,807		275

Total	$	1,374	$	2,627	$	850

In the third quarter of 2012, the Company revised its related capital asset purchasing arrangement. The Company now pays vendors directly for such purchases and pays only an agent fee to the related party. Only the agent fee is recognized as a related party transaction.

Certain employees of the Company provide services to companies outside the consolidated group for which the Company is not reimbursed. These amounts were not material for any of the years ended December 31, 2012, 2011 and 2010.

11. Sale of Real Estate Assets

On September 27, 2012, the Company entered into an agreement to sell the Topeka property for $1.5 million. The Company recognized a gain on sale of the property of $0.9 million for the year ended December 31, 2012. Additionally, the Company is providing services to customize the property to the new owner’s specification which were substantially completed as of December 31, 2012. In conjunction with this service, the Company had received an additional $0.6 million as of December 31, 2012.

12. Operating Leases, as Lessee

The Company leases and/or licenses two data center facilities and related equipment through May 2017. In addition, the Company has entered into a long-term ground sublease for its Santa Clara property through October 2052. Rent expense for the aforementioned leases was $5.6 million, $6.2 million and $9.9 million for the years ended December 31, 2012, 2011 and 2010, respectively, and is classified in property operating costs in the accompanying Statements of Operations and Comprehensive Income (Loss). The Company recorded $0.2 million and $0.5 million in capitalized rent for the years ended December 31, 2011 and 2010, respectively with no rent capitalized for the year ended December 31, 2012.

F-56

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

The future non-cancellable minimum rental payments required under operating leases and/or licenses at December 31, 2012 are as follows (in thousands):


2013	$	4,935
2014		4,949
2015		4,955
2016		5,030
2017		5,103
Thereafter		71,092

Total	$	96,064

13. Customer Leases, as Lessor

Future minimum lease payments to be received under non-cancelable operating customer leases (exclusive of recoveries from customers) are as follows at December 31, 2012 (in thousands):


2013	$	125,472
2014		88,528
2015		65,202
2016		48,292
2017		36,018
Thereafter		44,828

Total	$	408,340

14. Fair Value of Financial Instruments

Mortgage notes payable: The fair value of the Company’s floating rate mortgage loans was estimated using Level 2 “significant other observable inputs” such as available market information and discounted cash flows analyses based on borrowing rates that the Company believes it could obtain with similar terms and maturities. Because each of these loans was either near maturity as of December 31, 2012 or was entered into in the last 60 days of 2012 and did not have interest rates which were materially different than current market conditions would indicate, the fair value of each of the mortgage notes payable approximated the carrying value of each note.

F-57

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)

Other debt instruments: The fair value of the Company’s other debt instruments (including capital leases) was estimated in the same manner as the mortgage notes payable above. Similarly, because each of these instruments was near maturity as of December 31, 2012 and did not have interest rates which were materially different than current market conditions would indicate, the fair value of each instrument approximated the respective carrying values.

Member advances: The fair value of the Company’s member advances is similar to the carrying value of those advances as the interest rate of those advances reset monthly.

15. Employee Benefit Plan

The Company has a 401(k) plan covering substantially all employees of the Company. Participants in the 401(k) plan may elect to contribute a portion of their earnings to the plan, and the Company makes required matching contributions up to a maximum of 1% of the employee’s eligible compensation. The Company’s expense for the matching contributions for the years ended December 31 2012, 2011 and 2010, was $0.3 million, $0.2 million and $0.2 million, respectively.

16. Subsequent Events

On February 12, 2013, the Company completed its acquisition of a former 698,000 square foot semiconductor plant in Dallas, Texas for $20.5 million. Upon completion of the redevelopment, the site will be converted into a data center facility on the existing campus. This acquisition will be accounted for as an asset acquisition.

On May 1, 2013, the Company repaid the Secured Credit Facility with proceeds of a new unsecured credit facility (the “Unsecured Credit Facility”). The Unsecured Credit Facility includes a term loan of $225 million, which has a term of 5 years, and a revolving credit facility of $350 million, which has a term of 4 years, for an aggregate borrowing capacity of $575 million. The Company used a majority of the $445 million in proceeds (representing the term loan of $225 million and borrowings on the revolving credit facility) to pay the outstanding balances under the Secured Credit Facility, the Miami Loan, the Santa Clara Bridge Loan, and $5 million of the Member Advances. On May 1, 2013, the lender under the Member Advances exercised an option to purchase $10 million Class D units in exchange for the cancellation of $10 million of the outstanding balance under the Member Advances.

In June 2013, the Company used additional proceeds from the Unsecured Credit Facility to repay the outstanding balances of the Lenexa Loan, seller financing to acquire the Dallas facility, the Suwanee Land Loan, and the remaining outstanding balance of the Member Advances.

On August 15, 2013, the Company made a distribution to its members in an aggregate amount of $7.7 million.

F-58

QUALITYTECH, LP

CONSOLIDATED FINANCIAL STATEMENTS

SCHEDULE III—REAL ESTATE INVESTMENTS

As of December 31, 2012


	Initial Costs				Costs Capitalized Subsequent to Acquisition							Gross Carrying Amount
Property Location	Land		Buildings and Improvements		Land		Buildings and Improvements			Construction in Progress		Land		Buildings and Improvements		Construction in Progress		Accumulated Depreciation and Amortization			Date of Acquisition
	(dollars in thousands)
Owned Properties
Suwanee, Georgia	$	1,395	$	29,802	$	2,125	$	73,636		$	3,572	$	3,520	$	103,438	$	3,572	$	(28,773	)		9/1/2005
Atlanta, Georgia (Metro)		12,647		35,473		2,667		227,802			6,658		15,314		263,275		6,658		(43,686	)		10/3/2006
Santa Clara, California*		—		15,838		—		67,698			244		—		83,536		244		(14,437	)		11/1/2007
Richmond, Virginia		2,000		11,200		180		60,447			71,987		2,180		71,647		71,987		(3,747	)		3/20/2010
Sacramento, California		1,485		52,753		—		—			—		1,485		52,753		—		—			12/21/2012
Miami, Florida		1,777		6,955		—		20,052			—		1,777		27,007		—		(4,532	)		3/6/2008
Lenexa, Kansas		400		3,100		37		(3,046	)		3,260		437		54		3,260		(27	)		6/3/2011
Wichita, Kansas		—		686		—		725			—		—		1,411		—		(446	)		3/31/2005

	$	19,704	$	155,807	$	5,009	$	447,314		$	85,721	$	24,713	$	603,121	$	85,721	$	(95,648	)


Leased Properties
Jersey City, New Jersey		—		1,985		—		16,681			—		—		18,666		1,888		(6,888	)		11/1/2006
Overland Park, Kansas		—		—		—		719			—		—		719		—		(364	)

		—		1,985		—		17,400			—		—		19,385		1,888		(7,252	)

	$	19,704	$	157,792	$	5,009	$	464,714		$	85,721	$	24,713	$	622,506	$	87,609	$	(102,900	)

*	Owned facility subject to long-term ground sublease.

The following table reconciles the historical cost and accumulated depreciation for the years ended December 31, 2012, 2011 and 2010.


	Years Ended December 31,
	2012			2011			2010
Property
Balance, beginning of period	$	555,586		$	432,889		$	316,230
Disposals		(794	)		(463	)		(96	)
Additions (acquisitions and improvements)		180,036			123,160			116,755

Balance, end of period	$	734,828		$	555,586		$	432,889

Accumulated depreciation
Balance, beginning of period	$	(74,536	)	$	(52,923	)	$	(38,769	)
Disposals		162			46			111
Additions (depreciation and amortization expense)		(28,526	)		(21,659	)		(14,265	)

Balance, end of period	$	(102,900	)	$	(74,536	)	$	(52,923	)

F-59

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors of QTS Realty Trust, Inc.

We have audited the accompanying statement of revenues and certain operating expenses of the Sacramento Property for the year ended December 31, 2011, and the related notes to the financial statement.

Management’s Responsibility for the Financial Statement

Management is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the statement of revenues and certain operating expenses that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statement referred to above present fairly, in all material respects, the revenues and certain operating expenses described in Note 1 of the Sacramento Property financial statement for the year ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

Basis of Accounting

As described in Note 1 to the financial statement, the statement of revenues and certain operating expenses have been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the registration statement on Form S-11 of QTS Realty Trust, Inc., and is not intended to be a complete presentation of the Sacramento Property’s revenue and expenses. Our opinion is not modified with respect to this matter.

/s/ Ernst & Young LLP

Kansas City, MO

May 28, 2013

F-60

SACRAMENTO PROPERTY

STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES (IN THOUSANDS)


	Nine Months Ended
	September 30,				Year Ended
	2012		2011		December 31,
	(unaudited)		(unaudited)		2011
Revenues:
Rental	$	7,921	$	7,071	$	9,395
Recoveries from customers		1,140		992		1,334
Other		119		124		130

Total revenues		9,180		8,187		10,859


Certain Operating Expenses :
Property operating costs		4,071		3,617		4,775
Real estate taxes and insurance		538		555		720

Total certain operating expenses		4,609		4,172		5,495

Revenues in excess of certain operating expenses	$	4,571	$	4,015	$	5,364

See accompanying notes to statements of revenues and certain operating expenses.

F-61

NOTES TO STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES

1. General Information

On December 21, 2012, QualityTech, LP the (the “Company”) entered into a purchase agreement the (the “Acquisition”) to acquire the assets, properties and rights owned by Herakles, LLC and Sandy Beaches I LP (collectively referred to as “Herakles”), which owned and operated a world-class designed and engineered data center facility in Sacramento, California (the “Sacramento Property”) containing approximately 52,500 square feet (unaudited) of raised floor space and 9.0 megawatts (MW) (unaudited) of power capacity, of which approximately 60% (unaudited) was contracted as of December 21, 2012. The Sacramento Property was previously and continues to operate as a data center with approximately 200 colocation customers.

Herakles is not a legal entity but rather the operations related to acquired assets. The accompanying statements of revenues and certain operating expenses include the revenues and certain operating expenses of the Sacramento Property.

The accompanying statements of revenues and certain operating expenses have been prepared on the accrual basis of accounting for the purpose of complying with Rule 3-14 of Regulation S-X of the U.S. Securities and Exchange Commission. The statements of revenues and certain operating expenses exclude the following items that are not comparable to the proposed future operations of the Sacramento Property: interest on mortgage loans not assumed by the Company, depreciation and amortization and other overhead costs not directly related to the future operations of the Sacramento Property.

2. Summary of Significant Accounting Policies

Rental Revenue —Herakles, as a lessor, has retained substantially all the risks and benefits of ownership and accounts for its leases as operating leases. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases, which commences when control of the space has been provided to the customer. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease.

Repairs and maintenance —Repairs and maintenance costs are expensed as incurred.

Recoveries from Customers —Certain customer leases contain provisions under which the customers reimburse Herakles for a portion of the Property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling related charges. The reimbursements are included in revenue as recoveries from customers in the statements of operations in the period the applicable expenditures are incurred.

F-62

NOTES TO STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES

3. Customer Leases, as Lessor

Future minimum lease payments to be received under non-cancelable operating customer leases (exclusive of recoveries from customers) are as follows for the years ending December 31 (in thousands):


Year Ending December 31,
2013	$	7,788
2014		2,178
2015		168
2016		28
2017		28
Thereafter		34

Total	$	10,224

4. Subsequent Events

The Company and Herakles have evaluated subsequent events through May 28, 2013. There were no subsequent events to report.

F-63

Until , 2013 (25 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

LOGO

QTS REALTY TRUST, INC.

CLASS A COMMON STOCK

PROSPECTUS

Joint Book-Running Managers


Goldman, Sachs & Co.		Jefferies


BofA Merrill Lynch		Deutsche Bank Securities		KeyBanc Capital Markets		Morgan Stanley

Part II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 31.

Other Expenses of Issuance and Distribution.

The following table itemizes the expenses incurred by us in connection with the issuance and distribution of the securities being registered hereunder. All amounts shown are estimates except for the SEC registration fee, the FINRA filing fee and the NYSE listing fee.



SEC registration fee	$	40,920
FINRA filing fee		52,250
NYSE listing fee		*
Printing and engraving fees		*
Legal fees and expenses		*
Accounting fees and expenses		*
Transfer agent and registrar fees		*
Miscellaneous expenses		*

Total	$	*

*	To be completed by amendment.

Item 32.

Sales to Special Parties.

None.

Item 33.

Recent Sales of Unregistered Securities.

Upon our formation on May 17, 2013, Chad L. Williams was issued 1,000 shares of common stock for total consideration of $1,000 in cash in order to provide our initial capitalization. The shares were issued in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”), as a transaction not involving a public offering. We will repurchase these shares in connection with this offering.

In connection with our formation transactions, QualityTech, LP, our operating partnership, will issue 1,000 OP units to Mr. Williams in exchange for his ownership interest in QualityTech GP, LLC, the current general partner of our operating partnership, and we will issue shares of Class B common stock to Mr. Williams in exchange for an equivalent number of common limited partnership units of our operating partnership held by Mr. Williams, and shares of Class A common stock to GA QTS Interholdco, LLC in exchange for its interest in General Atlantic REIT, Inc., majority owner of our operating partnership. These shares were issued in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act, as a transaction not involving a public offering.

Item 34.

Indemnification of Directors and Officers.

The Maryland General Corporation Law, or MGCL, permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our charter contains such a provision that eliminates such liability to the maximum extent permitted by Maryland law.

II-1

the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty;

the director or officer actually received an improper personal benefit in money, property or services; or

in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of:

a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and

any present or former director or officer who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity; or

Our charter and bylaws also permit us, with the approval of our board of directors, to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described above and to any employee or agent of our company or a predecessor of our company. With respect to our directors, we will be the indemnitor of first resort to the extent that any directors simultaneously are entitled to indemnification from GA QTS Interholdco, LLC with respect to any of the same matters for which we are obligated to provide indemnification pursuant to our charter and bylaws.

II-2

Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 35.

Treatment of Proceeds from Stock Being Registered.

None.

Item 36.

Financial Statements and Exhibits.

(a) Financial Statements.

See page F-1 for an index of the financial statements included in this Registration Statement on Form S-11.

(b) Exhibits.

The list of exhibits following the signature page of this Registration Statement on Form S-11 is incorporated by reference.

Item 37.

Undertakings.

(a) The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or Rule 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-11 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Overland Park, state of Kansas, on August 16, 2013.


QTS REALTY TRUST, INC.

By:		/s/ Chad L. Williams
		Chad L. Williams Chairman and Chief Executive Officer (Principal Executive Officer)

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints William H. Schafer and Shirley E. Goza, and each of them, as his attorney-in-fact and agent, with full power of substitution and resubstitution for him or her in any and all capacities, to sign any or all amendments or post-effective amendments to this registration statement, or any registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits thereto and other documents in connection therewith or in connection with the registration of the Class A common stock under the Securities Exchange Act of 1934, as amended, with the Securities and Exchange Commission, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorney-in-fact and agent or his substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.


Date: August 16, 2013	By:	/s/ Chad L. Williams
		Chad L. Williams Chairman and Chief Executive Officer (Principal Executive Officer)

Date: August 16, 2013	By:	/s/ William H. Schafer
		William H. Schafer (Principal Financial Officer and Principal Accounting Officer)

Date: August 16, 2013	By:	/s/ John W. Barter
		John W. Barter (Director)

Date: August 16, 2013	By:	/s/ William O. Grabe
		William O. Grabe (Director)

Date: August 16, 2013	By:	/s/ Catherine R. Kinney
		Catherine R. Kinney (Director)

II-4



Date: August 16, 2013	By:	/s/ Peter A. Marino
		Peter A. Marino (Director)

Date: August 16, 2013	By:	/s/ Scott D. Miller
		Scott D. Miller (Director)

Date: August 16, 2013	By:	/s/ Philip P. Trahanas
		Philip P. Trahanas (Director)

Date: August 16, 2013	By:	/s/ Stephen E. Westhead
		Stephen E. Westhead (Director)

II-5

EXHIBIT LIST


Exhibit
	1.1	*	Form of Underwriting Agreement
	2.1	*	Merger Agreement dated , 2013 by and among QTS Realty Trust, Inc., General Atlantic REIT, Inc. and GA QTS Interholdco, LLC
	3.1	*	Articles of Amendment and Restatement of QTS Realty Trust, Inc.
	3.2	*	Amended and Restated Bylaws of QTS Realty Trust, Inc.
	4.1	*	Form of Specimen Class A Common Stock Certificate
	5.1	*	Opinion of Hogan Lovells US LLP regarding the validity of the securities
	8.1	*	Opinion of Hogan Lovells US LLP regarding tax matters
	10.1		Form of Fifth Amended and Restated Agreement of Limited Partnership of QualityTech, LP
	10.2	*	Contribution Agreement dated as of , 2013 by and among QualityTech, LP and Chad L. Williams
	10.3	*	Purchase Agreement dated as of , 2013 by and among QTS Realty Trust, Inc., QualityTech, LP and Chad L. Williams
	10.4		Employment Agreement dated as of August 15, 2013 by and among QualityTech GP, LLC, QualityTech, LP, Quality Technology Services, LLC and Chad L. Williams†
	10.5		Amended and Restated Employment Agreement dated as of August 14, 2013 by and among QualityTech GP, LLC, QualityTech, LP, Quality Technology Services, LLC and William H. Schafer†
	10.6		Employment Agreement dated as of June 15, 2012 by and among QualityTech GP, LLC, QualityTech, LP and James H. Reinhart†
	10.7		Amendment No. 1 to Employment Agreement dated as of August 14, 2013 by and among QualityTech GP, LLC, QualityTech, LP, Quality Technology Services, LLC and James H. Reinhart†
	10.8		Employment Agreement dated as of June 29, 2012 by and among QualityTech GP, LLC, QualityTech, LP and Daniel T. Bennewitz†
	10.9		Amendment No. 1 to Employment Agreement dated as of August 14, 2013 by and among QualityTech GP, LLC, QualityTech, LP, Quality Technology Services, LLC and Daniel T. Bennewitz†
	10.10		Employment Agreement dated as of August 1, 2013 by and among QualityTech GP, LLC, QualityTech, LP, Quality Technology Services, LLC and Jeffrey H. Berson†
	10.11		Amendment No. 1 to Employment Agreement dated as of August 14, 2013 by and among QualityTech GP, LLC, QualityTech, LP, Quality Technology Services, LLC and Jeffrey H. Berson†
	10.12		Employment Agreement dated as of August 14, 2013 by and among QualityTech GP, LLC, QualityTech, LP, Quality Technology Services, LLC and Shirley E. Goza†
	10.13		Form of Indemnification Agreement
	10.14		Non-Competition Agreement dated as of June 29, 2012 by and among Quality Technology Services, LLC and James H. Reinhart†
	10.15		Non-Competition Agreement dated as of June 29, 2012 by and among Quality Technology Services, LLC and Daniel T. Bennewitz†
	10.16		Form of Registration Rights Agreement dated as of , 2013 by and among QTS Realty Trust, Inc. and the parties listed on Schedule I thereto
	10.17		Form of Amended and Restated Registration Rights Agreement dated as of , 2013 by and among QTS Realty Trust, Inc., QualityTech GP, LLC and GA QTS Interholdco, LLC
	10.18		Form of Amended and Restated Registration Rights Agreement dated as of , 2013 by and among QTS Realty Trust, Inc., QualityTech GP, LLC, Chad L. Williams and certain entities owned or controlled by Chad L. Williams

II-6


Exhibit
	10.19	Form of Tax Protection Agreement dated as of , 2013 by and among QTS Realty Trust, Inc., QualityTech, LP and the signatories party thereto
	10.20	QualityTech, LP 2010 Equity Incentive Plan†
	10.21	Amendment No. 1 to Qualitytech, LP 2010 Equity Incentive Plan†
	10.22	Form of Class O Unit Award Agreement (Time-Based Vesting) under QualityTech, LP 2010 Equity Incentive Plan†
	10.23	Form of Class O Unit Award Agreement (Performance-Based Vesting) under QualityTech, LP 2010 Equity Incentive Plan†

	10.24	Form of Class O Unit Award Agreement under QualityTech, LP 2010 Equity Incentive Plan†

	10.25	Form of Class RS Unit Award Agreement (Time-Based Vesting) under QualityTech, LP 2010 Equity Incentive Plan†

	10.26	Form of Class RS Unit Award Agreement (Performance-Based Vesting) under QualityTech, LP 2010 Equity Incentive Plan†

	10.27	QTS Realty Trust, Inc. 2013 Equity Incentive Plan†

	10.28	Form of Restricted Shares Agreement under QTS Realty Trust, Inc. 2013 Equity Incentive Plan†

	10.29	Form of Non-Qualified Option Agreement under QTS Realty Trust, Inc. 2013 Equity Incentive Plan†

	10.30	Second Amended and Restated Credit Agreement dated May 1, 2013 by and among QualityTech, LP, as borrower, the Lenders party thereto, KeyBank National Association, as agent, Regions Bank, as syndication agent, and KeyBanc Capital Markets, as sole lead arranger and sole book manager

	10.31	Credit Agreement dated December 21, 2012 by and among Quality Investment Properties Richmond, LLC, as a borrower, Quality Technology Services Richmond II, LLC, as a Guarantor, QualityTech, LP, as a guarantor, the Lenders party thereto, Regions Bank, as administrative agent, Bank of America, N.A., as syndication agent, and Regions Capital Markets and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers and joint book managers

	10.32	First Amendment to Credit Agreement, dated May 1, 2013, by and among Quality Investment Properties Richmond, LLC, Quality Technology Services Richmond II, LLC, QualityTech, LP, the Lenders party thereto, and Regions Bank, as administrative agent

	10.33	Ground Lease, dated October 2, 1997, by and between Mission-West Valley Land Corporation, as landlord, and Nexus Properties, Inc., Kinetic Systems, Inc., Digital Square, Inc., R. Darrell Gary, Michael J. Reidy and Michael J. Reidy as trustee of the Ronald Bonaguidi irrevocable trust, together as tenants

	10.34	First Amendment to Ground Lease, dated April 29, 1998, by and between Mission-West Valley Land Corporation, as landlord, and Nexus Properties, Inc., Kinetic Systems, Inc., R. Darrell Gary, Michael J. Reidy and Michael J. Reidy as trustee of the Ronald Bonaguidi irrevocable trust, together as tenants

	10.35	Second Amendment to Ground Lease, dated September 24, 2009, by and between Mission-West Valley Land Corporation, as landlord, and Quality Investment Properties Santa Clara, LLC, Chad L. Williams

II-7


Exhibit

	10.36		Third Amendment to Ground Lease, dated November 17, 2011, by and between Mission-West Valley Land Corporation, as landlord, and Quality Investment Properties Santa Clara, LLC, Chad L. Williams

	10.37	*	License Agreement between QTS Realty Trust, Inc. and Chad L. Williams dated , 2013

	10.38		Lease Agreement, dated January 1, 2009, by and between Quality Investment Properties-Williams Center, L.L.C. and Quality Technology Services Lenexa, LLC

	10.39		First Amendment to Lease, dated March 1, 2013, by and between Quality Investment Properties-Williams Center, L.L.C. and Quality Technology Services Lenexa, LLC

	21.1		List of Subsidiaries of the Company

	23.1		Consent of Ernst & Young, LLP

	23.2	*	Consent of Hogan Lovells US LLP (included in Exhibit 5.1)

	23.3	*	Consent of Hogan Lovells US LLP (included in Exhibit 8.1)

	24.1		Power of Attorney (included on the signature page to the Registration Statement)

†	Indicates management contract or compensatory plan.

*	To be filed by amendment.

II-8

Exhibit 10.1

FIFTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

QUALITYTECH, LP

[ ], 2013

TABLE OF CONTENTS


		Page

ARTICLE I DEFINED TERMS			2

ARTICLE II ORGANIZATIONAL MATTERS			16

Section 2.1	Organization		16
Section 2.2	Name		17
Section 2.3	Registered Office and Agent; Principal Office		17
Section 2.4	Term		17

ARTICLE III PURPOSE			18

Section 3.1	Purpose and Business		18
Section 3.2	Powers		18

ARTICLE IV CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS			19

Section 4.1	Capital Contributions of the Partners		19
Section 4.2	Issuances of Partnership Interests		19
Section 4.3	No Preemptive Rights		20
Section 4.4	Other Contribution Provisions		20
Section 4.5	No Interest on Capital		21
Section 4.6	Class RS LTIP Units		21
Section 4.7	Conversion of Class RS LTIP Units		23
Section 4.8	Class O LTIP Units		25
Section 4.9	Conversion of Class O LTIP Units		27

ARTICLE V DISTRIBUTIONS			30

Section 5.1	Requirement and Characterization of Distributions		30
Section 5.2	Amounts Withheld		33
Section 5.3	Distributions upon Liquidation		33
Section 5.4	Revisions to Reflect Issuance of Partnership Interests		33

ARTICLE VI ALLOCATIONS			34

Section 6.1	Allocations for Capital Account Purposes		34
Section 6.2	Revisions to Allocations to Reflect Issuance of Partnership Interests		37

ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS			37

Section 7.1	Management		37
Section 7.2	Certificate of Limited Partnership		41
Section 7.3	Title to Partnership Assets		42


Section 7.4	Reimbursement of the General Partner	42
Section 7.5	Outside Activities of the General Partner; Relationship of Shares to Partnership Units; Funding Debt	45
Section 7.6	Transactions with Affiliates	47
Section 7.7	Indemnification	48
Section 7.8	Liability of the General Partner	50
Section 7.9	Other Matters Concerning the General Partner	51
Section 7.10	Reliance by Third Parties	52
Section 7.11	Loans by Third Parties	52

ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS		53

Section 8.1	Limitation of Liability	53
Section 8.2	Management of Business	53
Section 8.3	Outside Activities of Limited Partners	53
Section 8.4	Return of Capital	53
Section 8.5	Rights of Limited Partners Relating to the Partnership	54
Section 8.6	Redemption Right	55

ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS		58

Section 9.1	Records and Accounting	58
Section 9.2	Fiscal Year	59
Section 9.3	Reports	59

ARTICLE X TAX MATTERS		59

Section 10.1	Preparation of Tax Returns	59
Section 10.2	Tax Elections	59
Section 10.3	Tax Matters Partner	60
Section 10.4	Organizational Expenses	61
Section 10.5	Withholding	62

ARTICLE XI TRANSFERS AND WITHDRAWALS		62

Section 11.1	Transfer	62
Section 11.2	Transfers of Partnership Interests of General Partner	63
Section 11.3	Limited Partners’ Rights to Transfer	64
Section 11.4	Substituted Limited Partners	65
Section 11.5	Assignees	66
Section 11.6	General Provisions	66

ARTICLE XII ADMISSION OF PARTNERS		68

Section 12.1	Admission of a Successor General Partner	68
Section 12.2	Admission of Additional Limited Partners	68
Section 12.3	Amendment of Agreement and Certificate of Limited Partnership	69


ARTICLE XIII DISSOLUTION AND LIQUIDATION		69

Section 13.1	Dissolution	69
Section 13.2	Winding Up	70
Section 13.3	Compliance with Timing Requirements of Regulations; Restoration of Deficit Capital Accounts	71
Section 13.4	Rights of Limited Partners	73
Section 13.5	Notice of Dissolution	73
Section 13.6	Cancellation of Certificate of Limited Partnership	73
Section 13.7	Reasonable Time for Winding Up	73
Section 13.8	Waiver of Partition	74
Section 13.9	Liability of Liquidator	74

ARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS		74

Section 14.1	Amendments	74
Section 14.2	Meetings of the Partners	75

ARTICLE XV GENERAL PROVISIONS		76

Section 15.1	Addresses and Notice	76
Section 15.2	Titles and Captions	76
Section 15.3	Pronouns and Plurals	76
Section 15.4	Further Action	76
Section 15.5	Binding Effect	77
Section 15.6	Creditors	77
Section 15.7	Waiver	77
Section 15.8	Counterparts	77
Section 15.9	Applicable Law	77
Section 15.10	Invalidity of Provisions	77
Section 15.11	Power of Attorney	77
Section 15.12	Entire Agreement	79
Section 15.13	No Rights as Shareholders	79
Section 15.14	Limitation to Preserve REIT Status	79

List of Exhibits


Exhibit A		Form of Partner Registry
Exhibit B		Capital Account Maintenance
Exhibit C		Special Allocation Rules
Exhibit D		Notice of Redemption
Exhibit E		Form of DRO Registry
Exhibit F		Notice of Election by Holder to Convert Class RS LTIP Units into Class A Units
Exhibit G		Notice of Election by Partnership to Force Conversion of Class RS LTIP Units into Class A Units
Exhibit H		Notice of Election by Holder to Convert Class O LTIP Units into Class A Units
Exhibit I		Notice of Election by Partnership to Force Conversion of Class O LTIP Units into Class A Units

iii

FIFTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

QUALITYTECH, LP

THIS FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of [ ], 2013, is entered into by and among QTS Realty Trust, Inc., a Maryland corporation, as the General Partner, and the Persons whose names are set forth on the Partner Registry (as hereinafter defined) as Limited Partners, together with any other Persons who become Partners in QualityTech, LP (the “ Partnership ”) as provided herein.

WHEREAS, on August 5, 2009, QualityTech GP, LLC, the former general partner of the Partnership (the “ Former General Partner ”), formed the Partnership as a limited partnership pursuant to Delaware law by the filing of the Certificate of Limited Partnership with the Delaware Secretary of State;

WHEREAS, the Former General Partner and Chad L. Williams (the “ Organizational Limited Partner ”) entered into that certain Agreement of Limited Partnership of the Partnership dated as of August 5, 2009 (the “ Original Agreement ”);

WHEREAS, the Original Agreement subsequently was amended and restated from time to time by the Former General Partner and the then Limited Partners, with the most recent such amendment and restatement being the Fourth Amended and Restated Agreement of Limited Partnership, dated September 28, 2012, as amended (the “ Fourth Amended Agreement ”);

WHEREAS, in connection with the initial public offering of the General Partner (the “ IPO ”), (i) the Class C and Class D units of limited partnership interest of the Partnership have converted into Class A Units in accordance with their terms, (ii) General Atlantic REIT, Inc. has merged with and into the General Partner, with the General Partner surviving and continuing to hold the Partnership Interests formerly held by General Atlantic REIT, Inc., (iii) the General Partner has been admitted to the Partnership as successor general partner, and the Former General Partner has withdrawn as general partner of the Partnership, with the continuation of the business of the Partnership and the appointment, effective as of the date of withdrawal of the Former General Partner, of the General Partner as successor general partner having been approved by Consent of the Outside Limited Partners, (v) QualityTech Employee Pool, LLC has distributed to its members the LTIP Units held by it in accordance with each such member’s LTIP Unit grants, with such members now being Partners in the Partnership and (vi) the General Partner has contributed to the Partnership the net proceeds of the IPO in exchange for a number of Class A Units equal to the numbers of shares of common stock issued in the IPO; and

WHEREAS, the Partners now wish to amend and restate the partnership agreement as set forth herein, which shall amend, restate and supersede in its entirety the Fourth Amended Agreement and which shall constitute.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree to amend and restate the Fourth Amended Agreement in its entirety and agree to continue the Partnership as a limited partnership under the Delaware Revised Uniform Limited Partnership Act, as amended from time to time, as follows:

ARTICLE I

DEFINED TERMS

The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

“ Act ” means the Delaware Revised Uniform Limited Partnership Act, as it may be amended from time to time, and any successor to such statute.

“ Additional Limited Partner ” means a Person admitted to the Partnership as a Limited Partner pursuant to Section 12.2 hereof and who is shown as a Limited Partner on the Partnership Registry.

“ Adjusted Capital Account ” means the Capital Account maintained for each Partner as of the end of each Fiscal Year (i) increased by any amounts which such Partner is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii) decreased by the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

“ Adjusted Capital Account Deficit ” means, with respect to any Partner, the deficit balance, if any, in such Partner’s Adjusted Capital Account as of the end of the relevant Fiscal Year.

“ Adjusted Property ” means any property the Carrying Value of which has been adjusted pursuant to Exhibit B .

“ Adjustment Event ” means an event in which (i) the Partnership makes a distribution of Partnership Units on all outstanding Class A Units, (ii) the Partnership subdivides the outstanding Class A Units into a greater number of Class A Units or a lesser number of Class A Units, (iii) the Partnership issues any Partnership Units in exchange for its outstanding Class A Units by way of a reclassification or recapitalization of its Class A Units, or (iv) a similar transaction involving Class A Units where consideration is not received in connection with such transaction. For the avoidance of doubt, the following shall not be Adjustment Event: (a) the issuance of Partnership Units in a financing, reorganization, acquisition or similar business transaction; (b) the issuance of Partnership Units pursuant to the Equity Incentive Plan or other compensation plan, or under a distribution reinvestment plan; or (c) the issuance of any Partnership Units to the General Partner or other Persons in respect of a Capital Contribution to the Partnership.

“ Affiliate ” means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, or (ii) any officer, director, general partner or trustee of such Person or any Person referred to in the foregoing clause (i). For purposes of this definition, “control,” when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“ Aggregate DRO Amount ” means the aggregate balances of the DRO Amounts, if any, of all DRO Partners, if any, as determined on the date in question.

“ Agreed Value ” means (i) in the case of any Contributed Property, the Section 704(c) Value of such property as of the time of its contribution to the Partnership, reduced by any liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed as determined under Section 752 of the Code and the regulations thereunder; and (ii) in the case of any property distributed to a Partner by the Partnership, the Partnership’s Carrying Value of such property at the time such property is distributed, reduced by any indebtedness either assumed by such Partner upon such distribution or to which such property is subject at the time of distribution.

“ Agreement ” means this Fifth Amended and Restated Agreement of Limited Partnership, as it may be amended, supplemented or restated from time to time.

“ Assignee ” means a Person to whom one or more Partnership Units have been transferred in a manner permitted under this Agreement, but who has not become a Substituted Limited Partner, and who has the rights set forth in Section 11.5 .

“ Automatic RS Conversion ” has the meaning set forth in Section 4.7.C .

“ Available Cash ” means, with respect to any period for which such calculation is being made, cash of the Partnership, regardless of source (including Capital Contributions and loans to the Partnership), that the General Partner, in its sole and absolute discretion, determines is appropriate for distribution to the Partners.

“ Award Agreement ” means each or any, as the context implies, agreement or instrument entered into between the Partnership and a grantee upon acceptance of an award of LTIP Units under the Equity Incentive Plan, in each case in form and substance satisfactory to the General Partner.

“ Book-Tax Disparities ” means, with respect to any item of Contributed Property or Adjusted Property, as of the date of any determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the adjusted basis thereof for federal income tax purposes as of such date. A Partner’s share of the Partnership’s Book-Tax Disparities in all of its Contributed Property and Adjusted Property will be reflected by the difference between such Partner’s Capital Account balance as maintained pursuant to Exhibit B and the hypothetical balance of such Partner’s Capital Account computed as if it had been maintained strictly in accordance with federal income tax accounting principles.

“ Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in Overland Park, Kansas or New York, New York are authorized or required by law to close.

“ Capital Account ” means the Capital Account maintained for a Partner pursuant to Exhibit B . The Capital Account balance for each Partner who is a Partner on the date hereof shall be the amount set forth opposite such Partner’s name on the Partner Registry. In connection with the IPO, the Carrying Values of all Partnership Assets are being revalued in accordance with Section 1.D. of Exhibit B so that after giving effect to the allocations of Unrealized Gains and Unrealized Losses resulting therefrom in accordance with the provisions of Article VI hereof, (i) the Capital Account of each Class A Unit shall be [$ ], the issue price of a Share of the General Partner Entity in the IPO, (ii) the Capital Account of each Class RS LTIP Units issued prior to and not in connection with the IPO shall be [$ ], the issue price of a Share of the General Partner Entity in the IPO, (iii) the Capital Account of each Class O LTIP Units issued prior to September 1, 2012 shall be [$ ], the excess of the issue price of a Share of the General Partner Entity in the IPO over the Class O LTIP Unit Adjusted Conversion Factor for such Units, (iv) the Capital Account of each Class O LTIP Units issued on or after September 1, 2012 and not in connection with the IPO shall be [$ ], the excess of the issue price of a Share of General Partner in the IPO over the Class O LTIP Unit Adjusted Conversion Factor for such Units.

“ Capital Contribution ” means, with respect to any Partner, any cash and the Agreed Value of Contributed Property which such Partner contributes or is deemed to contribute to the Partnership.

“ Carrying Value ” means (i) with respect to a Contributed Property or Adjusted Property, the Section 704(c) Value of such property reduced (but not below zero) by all Depreciation with respect to such Contributed Property or Adjusted Property, as the case may be, charged to the Partners’ Capital Accounts and (ii) with respect to any other Partnership property, the adjusted basis of such property for federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted from time to time in accordance with Exhibit B , and to reflect changes, additions (including capital improvements thereto) or other adjustments to the Carrying Value for dispositions and acquisitions of Partnership properties, as deemed appropriate by the General Partner.

“ Cash Amount ” means an amount of cash equal to the Value on the Valuation Date of the Shares Amount.

“ Certificate of Limited Partnership ” means the Certificate of Limited Partnership relating to the Partnership filed in the office of the Delaware Secretary of State, as amended from time to time in accordance with the terms hereof and the Act.

“ Class A ” has the meaning set forth in Section 5.1.C .

“ Class A Share ” has the meaning set forth in Section 5.1.C .

“ Class A Unit ” means any Partnership Unit that is not specifically designated by the General Partner as being of another specified class of Partnership Units.

“ Class A Unit Distribution ” has the meaning set forth in Section 4.6.B .

“ Class A Unit Economic Capital Account Balance ” means (i) the Capital Account balance of the General Partner, plus the amount of the General Partner’s share of any Partner Minimum Gain or Partnership Minimum Gain, in either case to the extent attributable to the General Partner’s ownership of Class A Units and computed on a hypothetical basis after taking into account all allocations through the date on which any allocation is made under Section 6.1.E , divided by (ii) the number of the General Partner’s Class A Units.

“ Class A Unit Profit Balance ” as of any date of determination means the excess, if any, of (i) the Class A Unit Economic Capital Account Balance on such date for purposes of either Section 4.9 or Section 6.1.F(ii) over (ii) the Class O LTIP Unit Adjusted Conversion Factor as of such date.

“ Class A Unit Transaction ” has the meaning set forth in Section 4.7.F .

“ Class B ” has the meaning set forth in Section 5.1.C .

“ Class B Share ” has the meaning set forth in Section 5.1.C .

“ Class B Unit ” means a Partnership Unit that is specifically designated by the General Partner as being a Class B Unit.

“ Class O LTIP Unit ” means a Partnership Unit that is specifically designated by the General Partner as being a Class O LTIP Unit.

“ Class O LTIP Unit Adjusted Conversion Factor ” means the Class A Unit Economic Capital Account Balance on the date on which the Class O Units in question were issued, reduced by the excess, if any, of (i) the aggregate distributions per Class A Unit made with respect to the Class A Units held by the General Partner from the date on which such Class O Units were issued to the date of determination for purposes of Section 4.9 or Section 6.1.F over (ii) aggregate Net Income per Class A Unit allocated pursuant to Section 6.1.A(7) (reduced by any Net Losses allocated with respect to such Class A Units pursuant to Section 6.1.B(2) to the extent not offset with subsequent allocations of Net Income pursuant to Section 6.1A(6) during the applicable period) with respect to the Class A Units held by the General Partner during such period.

“ Class O LTIP Unit Capital Account Limitation ” has the meaning set forth in Section 4.9.A .

“ Class O LTIP Unit Conversion Right ” has the meaning set forth in Section 4.9.A .

“ Class O Unit Economic Capital Account Balance ” means the Capital Account balance of a holder of Class O LTIP Units to the extent attributable to its ownership of Class O LTIP Units.

“ Class O LTIP Unit Mandatory Conversion ” has the meaning set forth in Section 4.9.C.

“ Class O LTIP Unit Mandatory Conversion Notice ” has the meaning set forth in Section 4.9.C .

“ Class O LTIP Unit Tax Distribution ” has the meaning set forth in Section 5.1.F .

“ Class RS LTIP Unit ” means a Partnership Unit that is specifically designated by the General Partner as being a Class RS LTIP Unit.

“ Class RS LTIP Unit Capital Account Limitation ” has the meaning set forth in Section 4.7.B .

“ Class RS LTIP Unit Conversion Date ” has the meaning set forth in Section 4.7.B .

“ Class RS LTIP Unit Conversion Notice ” has the meaning set forth in Section 4.7.B .

“ Class RS LTIP Unit Conversion Right ” has the meaning set forth in Section 4.7.A .

“ Class RS LTIP Unit Economic Capital Account Balance ” means the Capital Account balance of the holder of a Class RS LTIP Unit to the extent attributable to its ownership of Class RS LTIP Units.

“ Class RS LTIP Unit Mandatory Conversion ” has the meaning set forth in Section 4.7.C .

“ Class RS LTIP Unit Mandatory Conversion Notice ” has the meaning set forth in Section 4.7.C .

“ Code ” means the Internal Revenue Code of 1986, as amended and in effect from time to time, as interpreted by the applicable regulations thereunder. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future law.

“ Consent ” means the consent or approval of a proposed action by a Partner given in accordance with Article XIV .

“ Consent of the Outside Limited Partners ” means the Consent of Limited Partners (excluding for this purpose any Limited Partner Interests held by the General Partner or the General Partner Entity) holding Class A Units representing more than fifty percent (50%) of the Percentage Interest of the Class A Units of all Limited Partners (excluding for this purpose any Class A Units held by the General Partner or the General Partner Entity).

“ Constituent Person ” has the meaning set forth in Section 4.7.F .

“ Contributed Property ” means each property or other asset contributed to the Partnership, in such form as may be permitted by the Act, but excluding cash contributed or deemed contributed to the Partnership. Once the Carrying Value of a Contributed Property is adjusted pursuant to Exhibit B , such property shall no longer constitute a Contributed Property for purposes of Exhibit B , but shall be deemed an Adjusted Property for such purposes.

“ Conversion Factor ” means 1.0; provided, however, that, if the General Partner Entity (i) declares or pays a dividend on its outstanding Shares in Shares or makes a distribution to all holders of its outstanding Shares in Shares, (ii) subdivides its outstanding Shares, or (iii) combines its outstanding Shares into a smaller number of Shares, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of Shares issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) and the denominator of which shall be the actual number of Shares (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination; and provided further that if an entity shall cease to be the General Partner Entity (the “ Predecessor Entity ”) and another entity shall become the General Partner Entity (the “ Successor Entity ”), the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which is the Value of one Share of the Predecessor Entity, determined as of the date when the Successor Entity becomes the General Partner Entity, and the denominator of which is the Value of one Share of the Successor Entity, determined as of that same date. (For purposes of the second proviso in the preceding sentence, if any shareholders of the Predecessor Entity will receive consideration in connection with the transaction in which the Successor Entity becomes the General Partner Entity, the numerator in the fraction described above for determining the adjustment to the Conversion Factor (that is, the Value of one Share of the Predecessor Entity) shall be the sum of the greatest amount of cash and the fair market value (as determined in good faith by the General Partner) of any securities and other consideration that the holder of one Share in the Predecessor Entity could have received in such transaction (determined without regard to any provisions governing fractional shares).) Any adjustment to the Conversion Factor shall become effective immediately after the effective date of the event retroactive to the record date, if any, for the event giving rise thereto, it being intended that (x) adjustments to the Conversion Factor are to be made to avoid unintended dilution or anti-dilution as a result of transactions in which Shares are issued, redeemed or exchanged without a corresponding issuance, redemption or exchange of Partnership Units and (y) if a Specified Redemption Date shall fall between the record date and the effective date of any event of the type described above, that the Conversion Factor applicable to such redemption shall be adjusted to take into account such event.

“ Convertible Funding Debt ” has the meaning set forth in Section 7.5.D .

“ Debt ” means, as to any Person, as of any date of determination, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, (ii) all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under letters of credit, surety bonds and other similar instruments guaranteeing payment or other performance of obligations by such Person, (iii) all indebtedness for borrowed money or for the

deferred purchase price of property or services secured by any lien on any property owned by such Person, to the extent attributable to such Person’s interest in such property, even though such Person has not assumed or become liable for the payment thereof, and (iv) obligations of such Person incurred in connection with entering into a lease which, in accordance with generally accepted accounting principles, should be capitalized.

“ Depreciation ” means, for each Fiscal Year, an amount equal to the U.S. federal income tax depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such year, except that if the Carrying Value of an asset differs from its adjusted basis for U.S. federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Carrying Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such year bears to such beginning adjusted tax basis; provided, however, that if the U.S. federal income tax depreciation, amortization, or other cost recovery deduction for such year is zero, Depreciation shall be determined with reference to such beginning Carrying Value using any reasonable method selected by the General Partner.

“ Distribution Period ” has the meaning set forth in Section 5.1.C .

“ DRO Amount ” means the amount specified in the DRO Registry with respect to any DRO Partner, as such DRO Registry may be amended from time to time.

“ DRO Partner ” means a Partner who has agreed in writing to be a DRO Partner and has agreed and is obligated to make certain contributions, not in excess of such DRO Partner’s DRO Amount, to the Partnership with respect to any deficit balance in such Partner’s Capital Account upon the occurrence of certain events. A DRO Partner who is obligated to make any such contribution only upon liquidation of the Partnership shall be designated in the DRO Registry as a “Part I DRO Partner” and a DRO Partner who is obligated to make any such contribution to the Partnership either upon liquidation of the Partnership or upon liquidation of such DRO Partner’s Partnership Interest shall be designated in the DRO Registry as a “Part II DRO Partner.”

“ DRO Registry ” means the DRO Registry maintained by the General Partner in the books and records of the Partnership containing substantially the same information as would be necessary to complete the Form of DRO Registry attached hereto as Exhibit E .

“ Equity Incentive Plan ” means any equity incentive or compensation plan hereafter adopted by the Partnership or the General Partner, including, without limitation, the QTS Realty Trust, Inc. 2013 Equity Incentive Plan, as amended from time to time.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Extraordinary Transaction ” means in a single transaction or a series of related transactions, (A) a sale, conveyance, exchange or transfer to another Person of (i) all or substantially all of the assets of the General Partner Entity or the Partnership or (ii) a majority of outstanding Shares or other equity securities of the General Partner Entity or a majority of outstanding Limited Partner Interests, or (B) a merger, consolidation or similar business combination of (i) the General

Partner Entity or the Partnership with or into one or more Persons or (ii) one or more Persons with or into the General Partner Entity or the Partnership, except, in the case of (B)(i) or (B)(ii), a merger, consolidation or similar business combination solely to effect a reincorporation of the General Partner Entity in a different jurisdiction.

“ Fiscal Quarter ” means any three calendar month quarter of any Fiscal Year of the Partnership, which quarters shall end on March 31, June 30, September 30 and December 31 of each Fiscal Year.

“ Fiscal Year ” means the fiscal year of the Partnership, which shall be the calendar year as provided in Section 9.2 .

“ Funding Debt ” means any Debt incurred for the purpose of providing funds to the Partnership by or on behalf of the General Partner, the General Partner Entity or any wholly owned subsidiary of either the General Partner or the General Partner Entity.

“ General Partner ” means QTS Realty Trust, Inc., a Maryland corporation, or its successor or permitted assignee, as general partner of the Partnership.

“ General Partner Entity ” means the General Partner; provided , however , that if (i) the common shares of beneficial interest (or other comparable equity interests) of the General Partner are at any time not Publicly Traded and (ii) the common shares of beneficial interest (or other comparable equity interests) of an entity that owns, directly or indirectly, fifty percent (50%) or more of the common shares of beneficial interest (or other comparable equity interests) of the General Partner are Publicly Traded, the term “General Partner Entity” shall refer to such entity whose common shares of beneficial interest (or other comparable equity securities) are Publicly Traded. If both requirements set forth in clauses (i) and (ii) above are not satisfied, then the term “General Partner Entity” shall mean the General Partner.

“ General Partner Interest ” means a Partnership Interest held by the General Partner that is not designated a Limited Partner Interest. A General Partner Interest may be expressed as a number of Partnership Units.

“ General Partner Payment ” has the meaning set forth in Section 15.14 hereof.

“ Immediate Family ” means, with respect to any natural Person, such natural Person’s spouse, parents, descendants, nephews, nieces, brothers, and sisters.

“ Incapacity ” or “ Incapacitated ” means, (i) as to any individual who is a Partner, death, total physical disability or entry by a court of competent jurisdiction adjudicating such Partner incompetent to manage his or her Person or estate, (ii) as to any corporation which is a Partner, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter, (iii) as to any partnership or limited liability company which is a Partner, the dissolution and commencement of winding up of the partnership or limited liability company, (iv) as to any estate which is a Partner, the distribution by the fiduciary of the estate’s entire interest in the Partnership,

(v) as to any trustee of a trust which is a Partner, the termination of the trust (but not the substitution of a new trustee) or (vi) as to any Partner, the bankruptcy of such Partner. For purposes of this definition, bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner commences a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Partner, (c) the Partner executes and delivers a general assignment for the benefit of the Partner’s creditors, (d) the Partner files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Partner in any proceeding of the nature described in clause (b) above, (e) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Partner or for all or any substantial part of the Partner’s properties, (f) any proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect has not been dismissed within one hundred twenty (120) days after the commencement thereof, (g) the appointment without the Partner’s consent or acquiescence of a trustee, receiver or liquidator has not been vacated or stayed within ninety (90) days of such appointment or (h) an appointment referred to in clause (g) is not vacated within ninety (90) days after the expiration of any such stay.

“ Indemnitee ” means (i) any Person made a party to a proceeding by reason of its status as (A) the General Partner, (B) the General Partner Entity, (C) a Limited Partner, or (D) any direct or indirect trustee, manager, director, officer, member, shareholder or partner of the Partnership, the General Partner, the General Partner Entity or a Limited Partner, and (ii) such other Persons (including Affiliates of the General Partner or the General Partner Entity, a Limited Partner or the Partnership) as the General Partner may designate from time to time (whether before or after the event giving rise to potential liability), in its sole and absolute discretion.

“ IPO ” has the meaning set forth in the recitals hereto.

“ IRS ” means the Internal Revenue Service, which administers the internal revenue laws of the United States.

“ Limited Partner ” means any Person named as a Limited Partner in the Partner Registry or any Substituted Limited Partner or Additional Limited Partner, in such Person’s capacity as a Limited Partner in the Partnership.

“ Limited Partner Interest ” means a Partnership Interest of a Limited Partner in the Partnership representing a fractional part of the Partnership Interests of all Limited Partners 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. A Limited Partner Interest may be expressed as a number of Partnership Units.

“ Liquidating Event ” has the meaning set forth in Section 13.1 .

“ Liquidating Gains ” means net capital gains realized in connection with the actual or hypothetical sale of all or substantially all of the assets of the Partnership, including but not limited to net capital gain realized in connection with an adjustment to the value of Partnership assets under Section 704(b) of the Code made pursuant to Section 1.D. of Exhibit B of this Agreement.

“ Liquidator ” has the meaning set forth in Section 13.2.A .

“ LTIP Unit ” means a Partnership Unit that is designated as an LTIP Unit and that may be awarded by the General Partner under the Equity Incentive Plan, which term initially shall include both the Class RS LTIP Units and the Class O LTIP Units, and which has the rights, preferences and other privileges designated in Sections 4.6 and 4.7 hereof or Sections 4.8 and 4.9 hereof, whichever shall be applicable, and elsewhere in this Agreement.

“ LV Safe Harbor ” has the meaning set forth in Section 10.2.B .

“ LV Safe Harbor Election ” has the meaning set forth in Section 10.2.B .

“ LV Safe Harbor Interest ” has the meaning set forth in Section 10.2.B .

“ Net Income ” means, for any taxable period, the excess, if any, of the Partnership’s items of income and gain for such taxable period over the Partnership’s items of loss and deduction for such taxable period. The items included in the calculation of Net Income shall be determined in accordance with Exhibit B . If an item of income, gain, loss or deduction that has been included in the initial computation of Net Income is subjected to the special allocation rules in Exhibit C , Net Income or the resulting Net Loss, whichever the case may be, shall be recomputed without regard to such item.

“ Net Loss ” means, for any taxable period, the excess, if any, of the Partnership’s items of loss and deduction for such taxable period over the Partnership’s items of income and gain for such taxable period. The items included in the calculation of Net Loss shall be determined in accordance with Exhibit B . If an item of income, gain, loss or deduction that has been included in the initial computation of Net Loss is subjected to the special allocation rules in Exhibit C , Net Loss or the resulting Net Income, whichever the case may be, shall be recomputed without regard to such item.

“ New Securities ” means (i) any rights, options, warrants or convertible or exchangeable securities having the right to subscribe for or purchase Shares, excluding grants under the Equity Incentive Plan, or (ii) any Debt issued by the General Partner that provides any of the rights described in clause (i).

“ Nonrecourse Built-in Gain ” means, with respect to any Contributed Properties or Adjusted Properties that are subject to a mortgage or negative pledge securing a Nonrecourse Liability, the amount of any taxable gain that would be allocated to the Partners pursuant to Section 2.B of Exhibit C if such properties were disposed of in a taxable transaction in full satisfaction of such liabilities and for no other consideration.

“ Nonrecourse Deductions ” has the meaning set forth in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Fiscal Year shall be determined in accordance with the rules of Regulations Section 1.704-2(c).

“ Nonrecourse Liability ” has the meaning set forth in Regulations Section 1.752-1(a)(2).

“ Notice of Redemption ” means a Notice of Redemption substantially in the form of Exhibit D .

“ Organizational Limited Partner ” has the meaning set forth in the recitals hereto.

“ Original Agreement ” has the meaning set forth in the recitals hereto.

“ Partner ” means the General Partner or a Limited Partner, and “ Partners ” means the General Partner and the Limited Partners.

“ Partner Minimum Gain ” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).

“ Partner Nonrecourse Debt ” has the meaning set forth in Regulations Section 1.704-2(b)(4).

“ Partner Nonrecourse Deductions ” has the meaning set forth in Regulations Section 1.704-2(i), and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Fiscal Year shall be determined in accordance with the rules of Regulations Section 1.704-2(i)(2).

“ Partner Registry ” means the Partner Registry maintained by the General Partner in the books and records of the Partnership, which contains substantially the same information as would be necessary to complete the form of the Partner Registry attached hereto as Exhibit A .

“ Partnership ” has the meaning set forth in the recitals hereto.

“ Partnership Interest ” means a Limited Partner Interest or a General Partner Interest 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. A Partnership Interest may be expressed as a number of Partnership Units.

“ Partnership Minimum Gain ” has the meaning set forth in Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net increase or decrease in Partnership Minimum Gain, for a Fiscal Year shall be determined in accordance with the rules of Regulations Section 1.704-2(d).

“ Partnership Record Date ” means the record date established by the General Partner either (i) for the distribution of Available Cash pursuant to Section 5.1.A hereof, which record date shall be the same as the record date established by the General Partner Entity for a distribution to its shareholders of some or all of its portion of such distribution, or (ii) if applicable, for determining the Partners entitled to vote on or consent to any proposed action for which the consent or approval of the Partners is sought pursuant to Section 14.2 hereof.

“ Partnership Unit ” means a fractional, undivided share of the Partnership Interests of all Partners issued pursuant to Sections 4.1 and 4.2 , and includes Class A Units, Class B Units, LTIP Units and any other classes or series of Partnership Units established after the date hereof. The number of Partnership Units outstanding and the Percentage Interests in the Partnership represented by such Partnership Units are set forth in the Partner Registry.

“ Percentage Interest ” means, as to a Partner holding a class of Partnership Interests, its interest in such class, determined by dividing the Partnership Units of such class owned by such Partner by the total number of Partnership Units of such class then outstanding. For purposes of determining the Percentage Interest of the Partners at any time when there are Class B Units outstanding, all Class B Units shall be treated as Class A Units.

“ Person ” means an individual, partnership, corporation, limited liability company, association, trust, joint venture, unincorporated organization and any government, governmental department or agency or political subdivision thereof.

“ Predecessor Entity ” has the meaning set forth in the definition of “ Conversion Factor ” herein.

“ Publicly Traded ” means listed or admitted to trading on the New York Stock Exchange, the NASDAQ Stock Market, any nationally or internationally recognized stock exchange or any successor to any of the foregoing.

“ Qualified Assets ” means any of the following assets: (i) interests, rights, options, warrants or convertible or exchangeable securities of the Partnership; (ii) Debt issued by the Partnership or any Subsidiary thereof in connection with the incurrence of Funding Debt; (iii) equity interests in Qualified REIT Subsidiaries and limited liability companies (or other entities disregarded from their sole owner for U.S. federal income tax purposes, including wholly owned grantor trusts) whose assets consist solely of Qualified Assets; (iv) up to a one percent (1%) equity interest in any partnership or limited liability company at least ninety-nine percent (99%) of the equity of which is owned, directly or indirectly, by the Partnership; (v) cash held for payment of administrative expenses or pending distribution to security holders of the General Partner Entity or any wholly owned Subsidiary thereof or pending contribution to the Partnership; and (vi) other tangible and intangible assets that, taken as a whole, are de minimis in relation to the net assets of the Partnership and its Subsidiaries.

“ Qualified REIT Subsidiary ” means any Subsidiary of the General Partner Entity that is a “qualified REIT subsidiary” within the meaning of Section 856(i) of the Code.

“ Recapture Income ” means any gain recognized by the Partnership (computed without regard to any adjustment pursuant to Section 754 of the Code) upon the disposition of any property or asset of the Partnership, which gain is characterized either as ordinary income or as “unrecaptured Section 1250 gain” (as defined in Section 1(h)(6) of the Code) because it represents the recapture of depreciation deductions previously taken with respect to such property or asset.

“ Recourse Liabilities ” means the amount of liabilities owed by the Partnership (other than Nonrecourse Liabilities and liabilities to which Partner Nonrecourse Deductions are attributable in accordance with Section 1.704-(2)(i) of the Regulations).

“ Redeeming Partner ” has the meaning set forth in Section 8.6.A .

“ Redemption Amount ” means either the Cash Amount or the Shares Amount, as determined by the General Partner, in its sole and absolute discretion. A Redeeming Partner shall have no right, without the General Partner’s consent, in its sole and absolute discretion, to receive the Redemption Amount in the form of the Shares Amount.

“ Redemption Right ” has the meaning set forth in Section 8.6.A .

“ Regulations ” means the Treasury Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“ REIT ” means an entity that qualifies as a real estate investment trust under the Code.

“ REIT Requirements ” has the meaning set forth in Section 5.1.A .

“ Residual Gain ” or “ Residual Loss ” means any item of gain or loss, as the case may be, of the Partnership recognized for U.S. federal income tax purposes resulting from a sale, exchange or other disposition of Contributed Property or Adjusted Property, to the extent such item of gain or loss is not allocated pursuant to Section 2.B.1(a ) or 2.B.2(a) of Exhibit C to eliminate Book-Tax Disparities.

“ Safe Harbor ” has the meaning set forth in Section 11.6.F .

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Section 704(c) Value ” of any Contributed Property means the fair market value of such property at the time of contribution as determined by the General Partner using such reasonable method of valuation as it may adopt; provided, however, subject to Exhibit B , the General Partner shall, in its sole and absolute discretion, use such method as it deems reasonable and appropriate to allocate the aggregate of the Section 704(c) Value of Contributed Properties in a single or integrated transaction among each separate property on a basis proportional to its fair market values.

“ Share ” means a share of common stock (or other comparable equity interest) of the General Partner Entity. Shares may be issued in one or more classes or series in accordance with the terms of

the Articles of Incorporation (or, if the General Partner is not the General Partner Entity, the organizational documents of the General Partner Entity). Shares issued in lieu of the Cash Amount may be either registered or unregistered Shares at the option of the General Partner. If there is more than one class or series of Shares, the term “ Shares ” shall, as the context requires, be deemed to refer to the class or series of Shares that corresponds to the class or series of Partnership Interests for which the reference to Shares is made. When used with reference to Class A Units, the term “ Shares ” refers to shares of common stock (or other comparable equity interest) of the General Partner Entity.

“ Shares Amount ” means a number of Shares equal to the product of the number of Partnership Units offered for redemption by a Redeeming Partner times the Conversion Factor; provided, however, that if the General Partner Entity issues to holders of Shares securities, rights, options, warrants or convertible or exchangeable securities entitling such holders to subscribe for or purchase Shares or any other securities or property (collectively, the “ rights ”), then the Shares Amount shall also include such rights that a holder of that number of Shares would be entitled to receive unless the Partnership issues corresponding rights to holders of Partnership Units.

“ Specified Redemption Date ” means the twentieth (20th) Business Day after the Valuation Date or such shorter period as the General Partner, in its sole and absolute discretion, may determine; provided , however , that, if the Shares are not Publicly Traded, the Specified Redemption Date means the thirtieth (30th) Business Day after receipt by the General Partner of a Notice of Redemption.

“ Subsidiary ” means, with respect to any Person, any corporation, limited liability company, trust, partnership or joint venture, or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person.

“ Substituted Limited Partner ” means a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 11.4 and who is shown as a Limited Partner in the Partner Registry.

“ Successor Entity ” has the meaning set forth in the definition of “ Conversion Factor ” herein.

“ Termination Transaction ” has the meaning set forth in Section 11.2.B .

“ Unrealized Gain ” attributable to any item of Partnership property means, as of any date of determination, the excess, if any, of (i) the fair market value of such property (as determined under Exhibit B ) as of such date, over (ii) the Carrying Value of such property (prior to any adjustment to be made pursuant to Exhibit B ) as of such date.

“ Unrealized Loss ” attributable to any item of Partnership property means, as of any date of determination, the excess, if any, of (i) the Carrying Value of such property (prior to any adjustment to be made pursuant to Exhibit B ) as of such date, over (ii) the fair market value of such property (as determined under Exhibit B ) as of such date.

“ Unvested Class O LTIP Units ” has the meaning set forth in Section 4.8.B .

“ Unvested Class RS LTIP Units ” has the meaning set forth in Section 4.6.E .

“ Valuation Date ” means the date of receipt by the General Partner of a Notice of Redemption or, if such date is not a Business Day, the first Business Day thereafter.

“ Value ” means, with respect to one Share of a class of outstanding Shares of the General Partner Entity that are Publicly Traded, the average of the daily market price for the ten consecutive trading days immediately preceding the date with respect to which value must be determined. The market price for each such trading day shall be the closing price, regular way, on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices on such day. If the outstanding Shares of the General Partner Entity are Publicly Traded and the Shares Amount includes, in addition to the Shares, rights or interests that a holder of Shares has received or would be entitled to receive, 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. If the Shares of the General Partner Entity are not Publicly Traded, the Value of the Shares Amount per Partnership Unit tendered for redemption (which will be the Cash Amount per Partnership Unit offered for redemption payable pursuant to Section 8.6.A ) means the amount that a holder of one Partnership Unit would receive if each of the assets of the Partnership were to be sold for its fair market value on the Specified Redemption Date, the Partnership were to pay all of its outstanding liabilities, and the remaining proceeds were to be distributed to the Partners in accordance with the terms of this Agreement. Such Value shall be determined by the General Partner, acting in good faith and based upon a commercially reasonable estimate of the amount that would be realized by the Partnership if each asset of the Partnership (and each asset of each partnership, limited liability company, trust, joint venture or other entity in which the Partnership owns a direct or indirect interest) were sold to an unrelated purchaser in an arms’ length transaction where neither the purchaser nor the seller were under economic compulsion to enter into the transaction (without regard to any discount in value as a result of the Partnership’s minority interest in any property or any illiquidity of the Partnership’s interest in any property).

“ Vested Class O LTIP Units ” has the meaning set forth in Section 4.8.B .

“ Vested Class RS LTIP Units ” has the meaning set forth in Section 4.6.E .

ARTICLE II

ORGANIZATIONAL MATTERS

Section 2.1

Organization

A. Organization, Status and Rights . The Partnership is a limited partnership organized pursuant to the provisions of the Act and upon the terms and conditions set forth in the Original Agreement. The Partners hereby confirm and agree to their status as partners of the Partnership and to continue the business of the Partnership on the terms set forth in this Agreement. Immediately after the admission of the Additional Limited Partners, the Organizational Limited Partner withdrew from the Partnership and relinquished any and all rights or interest he may have had in the

Partnership, and the Partnership was continued without dissolution. Except as expressly provided herein, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act. The Partnership Interest of each Partner shall be personal property for all purposes.

B. Qualification of Partnership . The Partners (i) agree that if the laws of any jurisdiction in which the Partnership transacts business so require, the appropriate officers or other authorized representatives of the Partnership shall file, or shall cause to be filed, with the appropriate office in that jurisdiction, any documents necessary for the Partnership to qualify to transact business under such laws; and (ii) agree and obligate themselves to execute, acknowledge and cause to be filed for record, in the place or places and manner prescribed by law, any amendments to the Certificate of Limited Partnership as may be required, either by the Act, by the laws of any jurisdiction in which the Partnership transacts business, or by this Agreement, to reflect changes in the information contained therein or otherwise to comply with the requirements of law for the continuation, preservation and operation of the Partnership as a limited partnership under the Act.

C. Representations . Each Partner represents and warrants that such Partner is duly authorized to execute, deliver and perform its obligations under this Agreement and that the Person, if any, executing this Agreement on behalf of such Partner is duly authorized to do so and that this Agreement is binding on and enforceable against such Partner in accordance with its terms.

Section 2.2

Name

The name of the Partnership shall be QualityTech, LP. The Partnership’s business may be conducted under any other name or names deemed advisable by the General Partner, including the name of any of the General Partner or any Affiliate thereof. The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be included in the Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction that so requires. The General Partner in its sole and absolute discretion may change the name of the Partnership at any time and from time to time and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.

Section 2.3

Registered Office and Agent; Principal Office

The address of the registered office of the Partnership in the State of Delaware shall be located at 615 South DuPont, Dover, Kent County, Delaware 19901, and the registered agent for service of process on the Partnership in the State of Delaware at such registered office shall be Capitol Services, Inc. The principal office of the Partnership shall be 12851 Foster Street, Suite 205, Overland, Kansas, 66213, or such other place as the General Partner may from time to time designate by notice to the Limited Partners. The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner deems advisable.

Section 2.4

Term

The term of the Partnership commenced on August 5, 2009, and shall continue until dissolved pursuant to the provisions of Article XIII or as otherwise provided by law.

ARTICLE III

PURPOSE

Section 3.1

Purpose and Business

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; (ii) to enter into any corporation, partnership, joint venture, trust, limited liability company or other similar arrangement to engage in any of the foregoing or the ownership of interests in any entity engaged, directly or indirectly, in any of the foregoing; and (iii) to do anything necessary or incidental to the foregoing; provided , however , that any business shall be limited to and conducted in such a manner as to permit the General Partner and, if different, the General Partner Entity, at all times to be classified as a REIT, unless the General Partner or General Partner Entity, as applicable, in its sole and absolute discretion has chosen to cease to qualify as a REIT or has chosen not to attempt to qualify as a REIT for any reason or reasons whether or not related to the business conducted by the Partnership. In connection with the foregoing, and without limiting the General Partner or the General Partner Entity’s right, in its sole and absolute discretion, to cease qualifying as a REIT, the Partners acknowledge that the status of the General Partner Entity as a REIT inures to the benefit of all the Partners and not solely to the General Partner, the General Partner Entity or their or its Affiliates, members and shareholders.

Section 3.2

Powers

The Partnership is empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Partnership, including, without limitation, full power and authority, directly or through its ownership interest in other entities, to enter into, perform and carry out contracts of any kind, borrow money and issue evidences of indebtedness, whether or not secured by mortgage, deed of trust, pledge or other lien, acquire, own, manage, improve and develop real property, and lease, sell, transfer and dispose of real property; provided , however , that the Partnership shall not take, or shall refrain from taking, any action which, in the judgment of the General Partner, in its sole and absolute discretion, (i) could adversely affect the ability of the General Partner Entity to continue to qualify as a REIT (if the General Partner Entity has chosen to attempt to qualify as a REIT), (ii) could subject the General Partner Entity to any taxes under Section 857 or Section 4981 of the Code, or (iii) could violate any law or regulation of any governmental body or agency having jurisdiction over either the General Partner or the General Partner Entity or its securities, unless such action (or inaction) shall have been specifically consented to by the General Partner in writing.

ARTICLE IV

CAPITAL CONTRIBUTIONS AND ISSUANCES

OF PARTNERSHIP INTERESTS

Section 4.1

Capital Contributions of the Partners

Prior to or concurrently with the execution of this Agreement, the Partners have made the Capital Contributions as set forth in the Partner Registry. On the date hereof, the Partners own Partnership Units in the amounts set forth in the Partner Registry and have Percentage Interests in the Partnership as set forth in the Partner Registry. The number of Partnership Units and Percentage Interest shall be adjusted in the Partner Registry from time to time by the General Partner to the extent necessary to reflect accurately exchanges, redemptions, Capital Contributions, the issuance of additional Partnership Units or similar events having an effect on a Partner’s Percentage Interest occurring after the date hereof in accordance with the terms of this Agreement. One thousand (1,000) Partnership Units shall be deemed to be the General Partner’s Partnership Units and shall be the General Partner Interest of the General Partner, and all other Partnership Units held by the General Partner shall be deemed to be Limited Partner Interests and shall be held by the General Partner in its capacity as a Limited Partner in the Partnership. Except as provided in Sections 7.5 , 10.5 , and 13.3 hereof, the Partners shall have no obligation to make any additional Capital Contributions or provide any additional funding to the Partnership (whether in the form of loans, repayments of loans or otherwise). Except as otherwise set forth in Section 13.3 hereof, no Partner shall have any obligation to restore any deficit that may exist in its Capital Account, either upon a liquidation of the Partnership or otherwise, provided that such Capital Account deficit did not arise by reason of distributions in violation of this Agreement or applicable law or other actions in violation of this Agreement or applicable law.

Section 4.2

Issuances of Partnership Interests

A. General . The General Partner is hereby authorized to cause the Partnership from time to time to issue to Partners (including the General Partner and its Affiliates) or other Persons (including, without limitation, in connection with the contribution of property to the Partnership or any of its Subsidiaries) Partnership Units or other Partnership Interests in one or more classes, or in 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 one or more other classes of Partnership Interests, all as shall be determined, subject to applicable Delaware law, by the General Partner in its sole and absolute discretion, 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, (iii) the rights of each such class or series of Partnership Interests upon dissolution and liquidation of the Partnership, (iv) the rights, if any, of each such class to vote on matters that require the vote or Consent of the Limited Partners, and (v) the consideration, if any, to be received by the Partnership; provided , however , that no such Partnership Units or other Partnership Interests shall be issued to the General Partner unless either (a) the Partnership Interests are issued in connection with the grant, award or issuance of Shares or other equity interests in the General Partner Entity (including a transaction described in

Section 7.4.F ) having designations, preferences and other rights such that the economic interests attributable to such Shares or other equity interests are substantially similar to the designations, preferences and other rights (except voting rights) of the Partnership Interests issued to the General Partner in accordance with this Section 4.2.A , or (b) the additional Partnership Interests are issued to all Partners holding Partnership Interests in the same class in proportion to their respective Percentage Interests in such class. If the Partnership issues Partnership Interests pursuant to this Section 4.2.A , the General Partner shall make such revisions to this Agreement (including but not limited to the revisions described in Section 5.4 , Section 6.2 and Section 8.6 ) as it deems necessary to reflect the issuance of such Partnership Interests.

B. Classes of Partnership Units . From and after the date of the Agreement, the Partnership shall have four classes of Partnership Units entitled “Class A Units,” “Class B Units,” “Class RS LTIP Units” and “Class O LTIP Units,” and such additional classes of Partnership Units as may be created by the General Partner pursuant to Section 4.2.A . Class A Units, Class B Units or a class of Partnership Interests created pursuant to Section 4.2.A , at the election of the General Partner, in its sole and absolute discretion, may be issued to newly admitted Partners in exchange for the contribution by such Partners of cash, real estate partnership interests, stock, notes or other assets or consideration; provided , however , that any Partnership Unit that is not specifically designated by the General Partner as being of a particular class shall be deemed to be a Class A Unit. Each Class B Unit shall be converted automatically into a corresponding series of Class A Unit on the day immediately following the Partnership Record Date for the Distribution Period in which such Class B Unit was issued, without the requirement for any action by the General Partner, the Partnership or the Partner holding the Class B Unit. The terms of the LTIP Units shall be in accordance with Sections 4.6 , 4.7 , 4.8 and 4.9 .

Section 4.3

No Preemptive Rights

Except to the extent expressly granted by the Partnership pursuant to another Agreement, no Person shall have any preemptive, preferential or other similar right with respect to (i) additional Capital Contributions or loans to the Partnership or (ii) issuance or sale of any Partnership Units or other Partnership Interests.

Section 4.4

Other Contribution Provisions

A. General . If any Partner is admitted to the Partnership and is given a Capital Account in exchange for services rendered to the Partnership, such transaction shall be treated by the Partnership and the affected Partner as if the Partnership had compensated such Partner in cash, and the Partner had made a Capital Contribution of such cash to the capital of the Partnership.

B. Mergers . To the extent the Partnership acquires any property (or an indirect interest therein) by the merger of any other Person into the Partnership or with or into a Subsidiary of the Partnership, Persons who receive Partnership Interests in exchange for their interest in the Person merging into the Partnership or with or into a Subsidiary of the Partnership shall be deemed to have been admitted as Additional Limited Partners pursuant to Section 12.2 and shall be deemed to have made Capital Contributions as provided in the applicable merger agreement (or if not so provided, as determined by the General Partner in its sole and absolute discretion) and as set forth in the Partner Registry.

Section 4.5

No Interest on Capital

No Partner shall be entitled to interest on its Capital Contributions or its Capital Account.

Section 4.6

Class RS LTIP Units

A. Issuance of Class RS LTIP Units . The General Partner may from time to time issue Class RS LTIP Units upon the grant of an award under the Equity Incentive Plan, for such consideration and subject to such other terms as the General Partner may determine to be appropriate, and admit the grantee as a Limited Partner. The Class RS LTIP Units shall not have any voting rights, rights to distributions, or other rights except as expressly set forth in this Agreement as applicable to the Class RS LTIP Units; provided , however , that subject to the following provisions of this Section 4.6 and the special provisions of Section 6.1.F , Class RS LTIP Units shall be treated as Class A Units solely for purposes of determining all allocations to be made under Section 6.1 . If an Adjustment Event occurs, then the General Partner shall make a corresponding equitable adjustment to the Class RS LTIP Units as the General Partner, in its sole discretion, determines necessary and appropriate to maintain a one-for-one conversion and economic equivalence ratio between Class A Units and Class RS LTIP Units. If more than one Adjustment Event occurs, the adjustment to the Class RS LTIP Units need be made only once using a single formula that takes into account each and every Adjustment Event as if all Adjustment Events occurred simultaneously. If the Partnership takes an action affecting the Class A Units other than an action specifically included as an Adjustment Event and, in the opinion of the General Partner, such action should require an adjustment to the Class RS LTIP Units to maintain the one-to-one correspondence described above, the General Partner shall have the right to make such adjustment to the Class RS LTIP Units, to the extent not prohibited by law or by the Equity Incentive Plan, in such manner and at such time as the General Partner, in its sole discretion, may determine to be appropriate under the circumstances. In addition, the General Partner may at any time make an adjustment to Class RS LTIP Units as authorized under and in accordance with the terms of the Equity Incentive Plan. If an adjustment is made to the Class RS LTIP Units, as herein provided, the Partnership shall promptly file in the books and records of the Partnership an officer’s certificate setting forth such adjustment and a brief statement of the facts and circumstances relating to such adjustment, which certificate shall be conclusive evidence of such adjustment absent manifest error.

B. Distributions . Subject to Section 5.1.G , the holder of Vested Class RS LTIP Units shall, when, as and if authorized and declared by the General Partner out of assets legally available for that purpose, be entitled to receive distributions in an amount per Vested Class RS LTIP Unit equal to the distributions per Class A Unit (the “ Class A Unit Distribution ”) paid to holders of Class A Units on such Partnership Record Date established by the General Partner with respect to such distribution, except as set forth in Section 5.1.E .

C. Priority . Subject to the provisions of this Section 4.6 and the special provisions of Sections 4.7 and 5.1.E , the Class RS LTIP Units shall rank pari passu with the Class A Units and Class B Units as to the payment of regular and special periodic or other distributions and distribution

of assets upon liquidation, dissolution or winding up. As to the payment of distributions and as to distribution of assets upon liquidation, dissolution or winding up, any class or series of Partnership Units which by its terms specifies that it shall rank junior to, on a parity with, or senior to the Class A Units shall also rank junior to, or pari passu with, or senior to, as the case may be, the Class RS LTIP Units.

D. Transfers . Class RS LTIP Units may not be transferred (as such term is used in Article XI) without the consent of the General Partner.

E. Special Provisions. Class RS LTIP Units shall also be subject to the following special provisions:

(i) Award Agreements . Class RS LTIP Units may be issued subject to such vesting, forfeiture and additional restrictions on transfer determined by the General Partner in its sole discretion and set forth pursuant to the terms of an Award Agreement. The General Partner may modify the terms of any Award Agreement from time to time in its sole discretion, subject to any restrictions on amendment imposed by the relevant Award Agreement or by the Equity Incentive Plan, if applicable. Class RS LTIP Units that have vested under the terms hereof and of an Award Agreement are referred to as “ Vested Class RS LTIP Units ”; all other Class RS LTIP Units shall be treated as “ Unvested Class RS LTIP Units .”

(ii) Forfeiture . Unless otherwise specified in the Award Agreement, upon the occurrence of any event specified in an Award Agreement that provides the Partnership with the right to repurchase Class RS Units at a specified purchase price or some other forfeiture of any Class RS Units, the Partnership or the General Partner shall have the right to repurchase Class RS LTIP Units at such specified purchase price or otherwise cause the forfeiture of any Class RS LTIP Units, and if the Partnership or the General Partner exercises such right to repurchase or cause the forfeiture in accordance with the terms hereof and of the applicable Award Agreement, the relevant Class RS LTIP Units shall immediately, and without any further action, be treated as cancelled and no longer outstanding for any purpose. Unless otherwise specified in the Award Agreement, no consideration or other payment shall be due with respect to any Class RS LTIP Units that have been forfeited. In connection with any repurchase or forfeiture of Class RS LTIP Units, the balance of the portion of the Capital Account of the holder of Class RS LTIP Units that is attributable to all of its Class RS LTIP Units shall be reduced by the amount, if any, by which it exceeds the target balance contemplated by Section 6.1.E hereof, calculated with respect to the Holder’s remaining Class RS LTIP Units, if any.

(iii) Allocations . The holder of Class RS LTIP Units shall be entitled to certain special allocations of gain under Section 6.1.E hereof.

(iv) Redemption . The Redemption Right provided to the holders of Class A Units under Section 8.6 hereof shall not apply with respect to Class RS LTIP Units unless and until they are converted to Class A Units as provided in clause (v) below and Section 4.7 .

(v) Conversion to Class A Units . Class RS LTIP Units are eligible to be converted into Class A Units in accordance with Section 4.7 hereof.

F. Voting Rights . Class RS LTIP Units shall have no voting rights.

Section 4.7

Conversion of Class RS LTIP Units

A. Conversion Right . Each holder of Vested Class RS LTIP Units shall have the right (the “ Class RS LTIP Unit Conversion Right ”), at its option, at any time to convert all or a portion of its Vested Class RS LTIP Units into Class A Units. The holder of Class RS LTIP Units shall not have the right to convert Unvested Class RS LTIP Units into Class A Units until they become Vested Class RS LTIP Units; provided , however , that when the holder of Unvested Class RS LTIP Units is notified of the expected occurrence of an event that will cause its Unvested Class RS LTIP Units to become Vested Class RS Units, the holder may give the Partnership a Class RS LTIP Unit Conversion Notice conditioned upon and effective as of the time of vesting and such Class RS LTIP Unit Conversion Notice shall be accepted by the Partnership subject to such condition. The General Partner shall have the right at any time to cause a conversion of any or all Class RS LTIP Units into Class A Units, as and to the extent set forth in Section 4.7.C . In all cases, the conversion of any Class RS LTIP Units into Class A Units shall be subject to the conditions and procedures set forth in this Section 4.7 .

B. Conversion by the Holder of Vested Class RS LTIP Units . The holder of Vested Class RS LTIP Units may convert such Class RS LTIP Units into an equal number of Class A Units, giving effect to all adjustments (if any) made pursuant to Section 4.6 hereof. Notwithstanding the foregoing, in no event may a holder of Vested Class RS LTIP Units (i) convert a number of Vested Class RS LTIP Units that exceeds (x) the Class RS LTIP Unit Economic Capital Account Balance of such holder, to the extent attributable to its ownership of Vested Class RS LTIP Units, divided by (y) the Class A Unit Economic Capital Account Balance, in each case as determined as of the effective date of conversion (the “ Class RS LTIP Unit Capital Account Limitation ”), it being understood and agreed that any fraction of a Class A Unit resulting from applying the foregoing formula shall be disregarded and forfeited by the holder, and (ii) receive, upon conversion of a number of Vested Class RS LTIP Units, more than an equal number of Class A Units.

In order to exercise its Conversion Right, the holder of Class RS LTIP Units shall deliver a notice (a “ Class RS LTIP Unit Conversion Notice ”) in the form attached as Exhibit F to this Agreement to the Partnership (with a copy to the General Partner) not less than ten nor more than 60 days prior to a date (the “ Class RS LTIP Unit Conversion Date ”) specified in such Class RS LTIP Unit Conversion Notice; provided , however , that if the General Partner has not given to the holder of Class RS LTIP Units notice of a proposed Class A Unit Transaction (as defined in Section 4.7.F hereof) at least 30 days prior to the effective date of such Class A Unit Transaction, then the holder of Class RS LTIP Units shall have the right to deliver a Class RS LTIP Unit Conversion Notice until the earlier of (x) the tenth day after such notice from the General Partner of a Class A Unit Transaction or (y) the third business day immediately preceding the effective date of such Class A Unit Transaction. A Class RS LTIP Unit Conversion Notice shall be provided in the manner provided in Section 15.1 . Each holder of Class RS LTIP Units covenants and agrees with

the Partnership that all Vested Class RS LTIP Units to be converted pursuant to this Section 4.7.B shall be free and clear of all liens and encumbrances. Notwithstanding anything herein to the contrary, a holder of Class RS LTIP Units may deliver a Notice of Redemption pursuant to Section 8.6 hereof (to the extent the Redemption Right otherwise would be exercisable) relating to those Class A Units that will be issued to the holder upon conversion of such Class RS LTIP Units into Class A Units in advance of the Class RS LTIP Unit Conversion Date; provided , however , that the redemption of such Class A Units by the Partnership shall in no event take place until after the Class RS LTIP Unit Conversion Date. For clarity, it is noted that the objective of this paragraph is to put the holder of Class RS LTIP Units in a position where, if the holder so wishes, the Class A Units into which the Vested Class RS LTIP Units will be converted can be redeemed by the Partnership simultaneously with such conversion to the extent that the Redemption Right set forth in Section 8.6 otherwise would be exercisable, with the further consequence that, if the General Partner elects to assume and perform the Partnership’s redemption obligation with respect to such Class A Units under Section 8.6 by delivering to the holder Shares rather than cash, then the holder can have such Shares issued to it simultaneously with the conversion of the Vested Class RS LTIP Units into Class A Units. The General Partner and the holder of Vested Class RS LTIP Units shall reasonably cooperate with each other to coordinate the timing of the events described in the foregoing sentence.

C. Conversion of Class RS LTIP Units by the Partnership; Automatic Conversion of Vested Class RS LTIP Units . The Partnership, at any time at the election of the General Partner, may cause any number of Class RS LTIP Units (whether such units are Vested Class RS LTIP Units or Unvested Class RS LTIP Units) to be converted (a “ Class RS LTIP Unit Mandatory Conversion ”) into that number of Class A Units as provided in Section 4.7.B , giving effect to all adjustments (if any) made pursuant to Section 4.6 . In order to effect a Class RS LTIP Unit Mandatory Conversion, the Partnership shall deliver a notice (a “ Class RS LTIP Unit Mandatory Conversion Notice ”) in the form attached as Exhibit G to this Agreement to the holder of Class RS LTIP Units not less than ten nor more than 60 days prior to the Conversion Date specified in such Class RS LTIP Mandatory Conversion Notice. A Class RS LTIP Unit Mandatory Conversion Notice shall be provided in the manner provided in Section 15.1 hereof. Notwithstanding anything to the contrary set forth in this Agreement, all Vested Class RS LTIP Units held by the holder shall be automatically converted (the “ Automatic RS Conversion ”), without any further action by the General Partner, the Partnership or the holder, into an equal number of Class A Units on the first date on which the Class RS LTIP Unit Capital Account Limitation would not limit the number of Vested Class RS LTIP Units that could be converted.

D. Completion of Conversion. A conversion of Class RS LTIP Units (i) for which the holder thereof has given a Class RS LTIP Unit Conversion Notice, (ii) for which the Partnership has given a Class RS LTIP Unit Mandatory Conversion Notice or (iii) upon an Automatic RS Conversion, shall in each case occur automatically after the close of business on the applicable conversion date without any action on the part of the holder of Class RS LTIP Units, as of which time the holder shall be credited on the books and records of the Partnership with the issuance as of the opening of business on the next day of the number of Class A Units issuable upon such conversion. After the conversion of Class RS LTIP Units as aforesaid, the Partnership shall deliver to the holder of such Class RS LTIP Units, upon its written request, a certificate of the General Partner certifying the number of Class A Units and remaining Class RS LTIP Units, if any, held by the holder immediately after such conversion.

E. Impact of Conversions for Purposes of Section 6.1.E . For purposes of making future allocations under Section 6.1.E hereof and for purposes of applying the Class RS LTIP Unit Capital Account Limitation, the portion of the Class RS LTIP Unit Economic Capital Account Balance of the holder of Class RS LTIP Units that is treated as attributable to its Class RS LTIP Units shall be reduced, as of the date of conversion, by the product of the number of Class RS LTIP Units converted and the Class A Unit Economic Capital Account Balance; provided that, for the avoidance of doubt and without limiting the authority of the General Partner to cause a Class RS LTIP Unit Mandatory Conversion pursuant to Section 4.7.F , if such conversion has occurred in connection with a Class A Unit Transaction, any Class RS LTIP Units that have not been so converted (whether as a result of the application of the Class RS LTIP Unit Capital Account Limitation or otherwise) shall automatically be deemed forfeited and canceled without further consideration to the holder thereof and the Class RS LTIP Unit Economic Capital Account Balance of such holder shall be deemed to equal zero.

F. Class A Unit Transactions . If the Partnership or the General Partner shall be a party to any Class A Unit Transaction (as defined below), then the General Partner shall, immediately prior to the Class A Unit Transaction, exercise its right to cause a Class RS LTIP Unit Mandatory Conversion with respect to all or any portion of the Class RS LTIP Units as the General Partner shall determine in its discretion, without regard to whether such Class RS LTIP Units are then eligible for conversion under Section 4.7.B , taking into account any allocations that occur in connection with the Class A Unit Transaction or that would occur in connection with the Class A Unit Transaction if the assets of the Partnership were sold at the Class A Unit Transaction price or, if applicable, at a value determined by the General Partner in good faith using the value attributed to the Partnership Units in the context of the Class A Unit Transaction (in which case the Class RS LTIP Unit Conversion Date shall be the effective date of the Class A Unit Transaction). For purposes of this Agreement, a “ Class A Unit Transaction ” means any transaction or a series of related transactions (including without limitation an Extraordinary Transaction, merger, consolidation, unit exchange, self-tender offer for all or substantially all of the Class A Units or other business combination or reorganization, or sale of all or substantially all of the Partnership’s assets, but excluding any Class A Unit Transaction which constitutes an Adjustment Event) as a result of which Class A Units shall be exchanged for or converted into the right, or the holders of such Class A Units shall otherwise be entitled, to receive cash, securities or other property or any combination thereof.

Section 4.8

Class O LTIP Units

A. Issuance of Class O LTIP Units . The General Partner may from time to time issue Class O LTIP Units upon the grant of an award under the Equity Incentive Plan, for such consideration and subject to such other terms as the General Partner may determine to be appropriate, and admit the grantee as a Limited Partner. Each Class O LTIP Unit is intended to represent the right to participate in all profits allocable to a Class A Unit, net of any losses allocable to a Class A Unit, including for this purpose any appreciation in the value of a Class A Unit, with such participation interest, on a per Class A Unit basis, being referred to as the Class A Unit Profit Balance.

The Class O LTIP Units shall not have any voting rights, rights to distributions, or other rights except as expressly set forth in this Agreement as applicable to the Class O LTIP Units; provided , however , that subject to the following provisions of this Section 4.8 and the special provisions of Section 6.1.F , Class O LTIP Units shall be treated as Class A Units solely for purposes of determining all allocations to be made under Section 6.1 . For purposes of computing the Partners’ Percentage Interests for purposes of making allocations under Section 6.1 , holders of Class O LTIP Units shall be treated as holders of Class A Units, and Class O LTIP Units shall be treated as Class A Units.

If an Adjustment Event occurs, then the General Partner shall make a corresponding equitable adjustment to the Class O LTIP Units as the General Partner in its sole discretion determines necessary and appropriate to maintain a one-for-one relationship between Class A Units and Class O LTIP Units. If more than one Adjustment Event occurs, the adjustment to the Class O LTIP Units need be made only once using a single formula that takes into account each and every Adjustment Event as if all Adjustment Events occurred simultaneously. If the Partnership takes an action affecting the Class A Units other than an action specifically included as an Adjustment Event and, in the opinion of the General Partner, such action should require an adjustment to the Class O LTIP Units to maintain the one-to-one correspondence described above, the General Partner shall have the right to make such adjustment to the Class O LTIP Units, to the extent not prohibited by law or by the Equity Incentive Plan, in such manner and at such time as the General Partner, in its sole discretion, may determine to be appropriate under the circumstances. In addition, the General Partner may at any time make an adjustment to Class O LTIP Units as authorized under and in accordance with the terms of the Equity Incentive Plan. If an adjustment is made to the Class O LTIP Units, as herein provided, the Partnership shall promptly file in the books and records of the Partnership an officer’s certificate setting forth such adjustment and a brief statement of the facts and circumstances relating to such adjustment, which certificate shall be conclusive evidence of such adjustment absent manifest error.

B. Special Provisions. Class O LTIP Units shall be subject to the additional following special provisions:

(i) Award Agreements . Class O LTIP Units may be issued subject to such vesting, forfeiture and additional restrictions on transfer determined by the General Partner in its sole discretion and set forth pursuant to the terms of an Award Agreement. The General Partner may modify the terms of any Award Agreement from time to time in its sole discretion, subject to any restrictions on amendment imposed by the relevant Award Agreement or by the Equity Incentive Plan, if applicable. Class O LTIP Units that have vested under the terms hereof and of the Award Agreement are referred to as “ Vested Class O LTIP Units ”; all other Class O LTIP Units shall be treated as “ Unvested Class O LTIP Units .”

(ii) Forfeiture . Unless otherwise specified in the Award Agreement, upon the occurrence of any event specified in an Award Agreement that provides the Partnership with

the right to repurchase Class O Units at a specified purchase price or some other forfeiture of any Class O Units, the Partnership or the General Partner shall have the right to repurchase Class O LTIP Units at such specified purchase price or otherwise cause the forfeiture of any Class O LTIP Units, and if the Partnership or the General Partner exercises such right to repurchase or cause the forfeiture in accordance with the terms hereof and of the applicable Award Agreement, the relevant Class O LTIP Units shall immediately, and without any further action, be treated as cancelled and no longer outstanding for any purpose. Unless otherwise specified in the Award Agreement, no consideration or other payment shall be due with respect to any Class O LTIP Units that have been forfeited. In connection with any repurchase or forfeiture of Class O LTIP Units, the balance of the portion of the Capital Account of the holder of Class O LTIP Units that is attributable to all of its Class O LTIP Units shall be reduced by the amount, if any, by which it exceeds the target balance contemplated by Section 6.1.F hereof, calculated with respect to the holder’s remaining Class O LTIP Units, if any.

(iii) Allocations . The holder of Class O LTIP Units shall be entitled to certain special allocations of gain under Section 6.1.F .

(iv) Redemption . The Redemption Right provided to the holders of Class A Units under Section 8.6 shall not apply with respect to Class O LTIP Units unless and until they are converted to Class A Units as provided in clause (v) below and Section 4.9 .

(v) Conversion to Class A Units . Class O LTIP Units are eligible to be converted into Class A Units in accordance with Section 4.9 .

C. Voting . Class O LTIP Units shall have no voting rights.

D. Transfers . Class O LTIP Units may not be transferred (as such term is used in Article XI) without the consent of the General Partner.

Section 4.9

Conversion of Class O LTIP Units

A. Conversion Right . Each holder of Vested Class O LTIP Units shall have the right (the “ Class O LTIP Unit Conversion Right ”), at its option, at any time to convert all or a portion of its Vested Class O LTIP Units into a number of Class A Units equal to (x) the product of (i) the Class A Unit Profit Balance multiplied by (ii) the number of Vested Class O LTIP Units to be converted into Class A Units, divided by (y) the Class A Unit Economic Capital Account Balance, determined as of the date of the exercise of the Class O Unit Conversion Right; it being understood and agreed that any fraction of a Class A Unit resulting from the foregoing conversion formula shall be disregarded and forfeited by the holder. Notwithstanding the foregoing, in no event may a holder of Vested Class O LTIP Units convert a number of Vested Class O LTIP Units that exceeds (x) the Class O Unit Economic Capital Account Balance of the holder of Vested Class O LTIP Units to the extent attributable to its ownership of Vested Class O LTIP Units, divided by (y) the Class A Unit Profit Balance, in each case as determined as of the effective date of conversion (the “ Class O LTIP Unit Capital Account Limitation ”); it being understood and agreed that any fraction of a Class A Unit resulting from applying the foregoing formula shall be disregarded and forfeited by the holder.

Holders of Class O LTIP Units shall not have the right to convert Unvested Class O LTIP Units into Class A Units until they become Vested Class O LTIP Units; provided , however , that when a holder of Unvested Class O LTIP Units is notified of the expected occurrence of an event that will cause its Unvested Class O LTIP Units to become Vested Class O LTIP Units, the holder may give the Partnership a Class O LTIP Unit Conversion Notice conditioned upon and effective as of the time of vesting and such Class O LTIP Conversion Notice shall be accepted by the Partnership subject to such condition. The General Partner shall have the right at any time to cause a conversion of any or all Class O LTIP Units into Class A Units, and if at the time of such conversion the Class O LTIP Units Capital Account Limitation is applicable, any Class O LTIP Units that would be so converted but for the Class O LTIP Units Capital Account Limitation shall be deemed forfeited and canceled without further consideration to the holder thereof. In all cases, the conversion of any Class O LTIP Units into Class A Units shall be subject to the conditions and procedures set forth in this Section 4.9 .

B. Exercise by the Holder of Class O LTIP Units . In order to exercise its Class O LTIP Unit Conversion Right, the holder of Vested Class O LTIP Units shall deliver a Class O LTIP Unit Conversion Notice in the form attached as Exhibit H to this Agreement to the Partnership (with a copy to the General Partner) not less than ten nor more than 60 days prior to a date (the “ Class O LTIP Unit Conversion Date ”) specified in such Class O LTIP Unit Conversion Notice; provided , however , that if the General Partner has not given to the holder of Class O LTIP Units notice of a proposed Class A Unit Transaction at least 30 days prior to the effective date of such Class A Unit Transaction, then the holder of Vested Class O LTIP Units shall have the right to deliver a Class O LTIP Unit Conversion Notice until the earlier of (x) the tenth day after such notice from the General Partner of a Class A Unit Transaction or (y) the third business day immediately preceding the effective date of such Class A Unit Transaction. A Class O LTIP Unit Conversion Notice shall be provided in the manner provided in Section 15.1 . Each holder of Class O LTIP Units covenants and agrees with the Partnership that all Vested Class O LTIP Units to be converted pursuant to this Section 4.9.B shall be free and clear of all liens and encumbrances. Notwithstanding anything herein to the contrary, a holder of Class O LTIP Units may deliver a Notice of Redemption pursuant to Section 8.6 hereof relating to those Class A Units that will be issued to the holder upon conversion of such Class O LTIP Units into Class A Units in advance of the Class O LTIP Unit Conversion Date; provided , however , that the redemption of such Class A Units by the Partnership shall in no event take place until after the Class O LTIP Unit Conversion Date. For clarity, it is noted that the objective of this paragraph is to put the holder of Class O LTIP Units in a position where, if it so wishes, the Class A Units into which its Vested Class O LTIP Units will be converted can be redeemed by the Partnership simultaneously with such conversion to the extent that the Redemption Right set forth in Section 8.6 otherwise would be exercisable, with the further consequence that, if the General Partner elects to assume and perform the Partnership’s redemption obligation with respect to such Class A Units under Section 8.6 by delivering to the holder Shares rather than cash, then the holder can have such Shares issued to it simultaneously with the conversion of its Vested Class O LTIP Units into Class A Units. The General Partner and the holder of Vested Class O LTIP Units shall reasonably cooperate with each other to coordinate the timing of the events described in the foregoing sentence.

C. Conversion of Class O LTIP Units by the Partnership . The Partnership, at any time at the election of the General Partner, may cause any number of Class O LTIP Units (whether such units are Vested Class O LTIP Units or Unvested Class O LTIP Units) held by the holder of Class O LTIP Units to be converted (a “ Class O LTIP Unit Mandatory Conversion ”) into a number of Class A Units determined as set forth in Section 4.9.A , giving effect to all adjustments (if any) made pursuant to Section 4.8 ; provided , however , that, any Class O LTIP Units that would be so converted but could not be converted by the holder due to the Class O LTIP Units Capital Account Limitation shall be forfeited and canceled without further consideration to the holder. In order to exercise its right to cause a Class O LTIP Unit Mandatory Conversion, the Partnership shall deliver a notice (a “ Class O LTIP Unit Mandatory Conversion Notice ”) in the form attached as Exhibit I to this Agreement to the holder of Class O LTIP Units not less than 10 nor more than 60 days prior to the Class O LTIP Unit Conversion Date specified in such Class O LTIP Unit Mandatory Conversion Notice. A Class O LTIP Unit Mandatory Conversion Notice shall be provided in the manner provided in Section 15.1 .

D. Completion of Conversion . A conversion of Class O LTIP Units for which the holder thereof has given a Class O LTIP Unit Conversion Notice or the Partnership has given a Class O LTIP Unit Mandatory Conversion Notice shall occur automatically after the close of business on the applicable Class O LTIP Unit Conversion Date without any action on the part of the holder of Class O LTIP Units, as of which time the holder shall be credited on the books and records of the Partnership with the issuance as of the opening of business on the next day of the number of Class A Units issuable upon such conversion. After the conversion of Class O LTIP Units as aforesaid, the Partnership shall deliver to the holder of Class O LTIP Units, upon its written request, a certificate of the General Partner certifying the number of Class A Units and remaining Class O LTIP Units, if any, held by the holder immediately after such conversion.

E. Impact of Conversions for Purposes of Section 6.1.F . For purposes of making future allocations under Section 6.1.F and for purposes of applying the Class O LTIP Units Capital Account Limitation, the Class O Unit Economic Capital Account Balance of the holder of Class O LTIP Units shall be reduced, as of the date of conversion, by the product of the number of Class O LTIP Units converted and the Class A Unit Profit Balance; provided that, for the avoidance of doubt and without limiting the authority of the General Partner to cause a Class O LTIP Unit Mandatory Conversion pursuant to Section 4.9.F , if such conversion has occurred in connection with a Class A Unit Transaction, any Class O LTIP Units that have not been so converted (whether as a result of the application of the Class O LTIP Unit Capital Account Limitation or otherwise) shall automatically be deemed forfeited and canceled without further consideration to the holder and the Class O LTIP Unit Economic Capital Account Balance of the holder shall be deemed to equal zero.

F. Class A Unit Transactions . If the Partnership or the General Partner shall be a party to any Class A Unit Transaction, then the General Partner may, in its discretion, immediately prior to the Class A Unit Transaction, exercise its right to cause a Class O LTIP Unit Mandatory Conversion with respect to all or any portion of the outstanding Class O LTIP Units, with such conversion to be determined taking into account any allocations that occur in connection with the Class A Unit Transaction or that would occur in connection with the Class A Unit Transaction if the assets of the Partnership were sold at the Class A Unit Transaction price or, if applicable, at a value determined

by the General Partner in good faith using the value attributed to the Partnership Units in the context of the Class A Unit Transaction (in which case the Conversion Date shall be the effective date of the Class A Unit Transaction).

ARTICLE V

DISTRIBUTIONS

Section 5.1

Requirement and Characterization of Distributions

A. Distribution of Operating Income . The General Partner shall distribute at least quarterly an amount equal to one hundred percent (100%) of the Available Cash of the Partnership with respect to such quarter or shorter period to the Partners in accordance with the terms established for the class or classes of Partnership Interests held by such Partners who are Partners on the respective Partnership Record Date with respect to such quarter or shorter period as provided in Sections 5.1.B , 5.1.C and 5.1.D and in accordance with the respective terms established for each class of Partnership Interest. Notwithstanding anything to the contrary contained herein, in no event may a Partner receive a distribution of Available Cash with respect to a Partnership Unit for a quarter or shorter period if such Partner is entitled to receive a distribution with respect to a Share for which such Partnership Unit has been redeemed or exchanged. Unless otherwise expressly provided for herein, or in the terms established for a new class or series of Partnership Interests created in accordance with Article IV hereof, no Partnership Interest shall be entitled to a distribution in preference to any other Partnership Interest. If the General Partner Entity has chosen to attempt to qualify as a REIT, the General Partner shall make such reasonable efforts, as determined by it in its sole and absolute discretion and consistent with the qualification of the General Partner Entity as a REIT, to distribute Available Cash (a) to Limited Partners so as to preclude any such distribution or portion thereof from being treated as part of a sale of property to the Partnership by a Limited Partner under Section 707 of the Code or the Regulations thereunder; provided , however , that none of the General Partner, the General Partner Entity, and the Partnership shall have liability to a Limited Partner under any circumstances as a result of any distribution to a Limited Partner being so treated, and (b) to the General Partner in an amount sufficient to enable the General Partner Entity to make distributions to its shareholders that will enable the General Partner Entity to (1) satisfy the requirements for qualification as a REIT under the Code and the Regulations (the “ REIT Requirements ”), and (2) avoid any federal income or excise tax liability.

B. Method .

(i) Each holder of Partnership Interests, if any, that is entitled to any preference in distribution shall be entitled to a distribution in accordance with the rights of any such class of Partnership Interests (and, within such class, pro rata in proportion to the respective Percentage Interests on such Partnership Record Date); and

(ii) To the extent there is Available Cash remaining after the payment of any preference in distribution in accordance with the foregoing clause (i) (if applicable), with respect to Partnership Interests that are not entitled to any preference in distribution, such Available Cash shall be distributed pro rata to each such class in accordance with the terms of such class (and, within each such class, pro rata in proportion to the respective Percentage Interests on such Partnership Record Date).

C. Distributions When Class B Units Are Outstanding . If for any quarter or shorter period with respect to which a distribution is to be made pursuant to Section 5.1.A. (a “ Distribution Period ”) Class B Units are outstanding on the Partnership Record Date for such Distribution Period, the General Partner shall allocate the Available Cash with respect to such Distribution Period available for distribution with respect to the Class A Units and Class B Units collectively between the Partners who are holders of Class A Units (“ Class A ”) and the Partners who are holders of Class B Units (“ Class B ”) as follows:

(1)

Class A shall receive that portion of the Available Cash (the “ Class A Share ”) determined by multiplying the amount of Available Cash by the following fraction:


		A x Y
		(A x Y) + (B x X)

(2)

Class B shall receive that portion of the Available Cash (the “ Class B Share ”) determined by multiplying the amount of Available Cash by the following fraction:


		B x X
		(A x Y) + (B x X)

(3)

For purposes of the foregoing formulas, (i) “A” equals the number of Class A Units outstanding on the Partnership Record Date for such Distribution Period; (ii) “B” equals the number of Class B Units outstanding on the Partnership Record Date for such Distribution Period; (iii) “Y” equals the number of days in the Distribution Period; and (iv) “X” equals the number of days in the Distribution Period for which the Class B Units were issued and outstanding.

The Class A Share shall be distributed pro rata among Partners holding Class A Units on the Partnership Record Date for the Distribution Period in accordance with the number of Class A Units held by each Partner on such Partnership Record Date; provided , however , that in no event may a Partner receive a distribution of Available Cash with respect to a Class A Unit if a Partner is entitled to receive a distribution with respect to a Share for which such Class A Unit has been redeemed or exchanged. If Class B Units were issued on the same date, the Class B Share shall be distributed pro rata among the Partners holding Class B Units on the Partnership Record Date for the Distribution Period in accordance with the number of Class B Units held by each Partner on such Partnership Record Date. In no event shall any Class B Units be entitled to receive any distribution of Available Cash for any Distribution Period ending prior to the date on which such Class B Units are issued. Solely for purposes of this paragraph C and paragraph D of this Section 5.1 , the terms “Class A Unit” and “Class A” shall also refer to Vested Class RS LTIP Units.

D. Distributions When Class B Units Have Been Issued on Different Dates . If Class B Units which have been issued on different dates are outstanding on the Partnership Record Date for any Distribution Period, then the Class B Units issued on each particular date shall be treated as a

separate series of Partnership Units for purposes of making the allocation of Available Cash for such Distribution Period among the holders of Partnership Units (and the formula for making such allocation, and the definitions of variables used therein, shall be modified accordingly). Thus, for example, if two series of Class B Units are outstanding on the Partnership Record Date for any Distribution Period, the allocation formula for each series, “ Series B1 ” and “ Series B2 ” would be as follows:

(1)

Series B1 shall receive that portion of the Available Cash determined by multiplying the amount of Available Cash by the following fraction:


		B1 x X1
		(A x Y) + (B x X1) + (B2 x X2)

(2)

Series B2 shall receive that portion of the Available Cash determined by multiplying the amount of Available Cash by the following fraction:


		B2 x X2
		(A x Y) + (B1 x X1) + (B2 x X2)

(3)

For purposes of the foregoing formulas the definitions set forth in Section 5.1.C(3) remain the same except that (i) “B1” equals the number of Partnership Units in Series B1 outstanding on the Partnership Record Date for such Distribution Period; (ii) “B2” equals the number of Partnership Units in Series B2 outstanding on the Partnership Record Date for such Distribution Period; (iii) “X1” equals the number of days in the Distribution Period for which the Partnership Units in Series B1 were issued and outstanding; and (iv) “X2” equals the number of days in the Distribution Period for which the Partnership Units in Series B2 were issued and outstanding.

E. Distributions With Respect to Class RS LTIP Units . In accordance with Section 4.6.A , unless and solely to the extent otherwise provided in an Award Agreement but subject to Section 5.1.G , holders of Vested Class RS LTIP Units shall be entitled to receive distributions in an amount per Vested Class RS LTIP Unit equal to the distribution per Class A Unit. Except for distributions upon liquidation of the Partnership, which shall be made in accordance with Section 13.2.B or as the General Partner in its discretion may determine otherwise, no distributions shall be made in respect of any unvested RS Units unless the General Partner determines otherwise; provided , that if and when any Class RS LTIP Unit first becomes vested, the holder thereof shall be entitled to receive with respect to such Class RS Unit, subject to Section 5.1.G, an amount equal to the excess of (i) the aggregate distributions per Class A Unit made during the period from the issuance of such Class RS LTIP Unit to the vesting of such Class RS LTIP Unit over (ii) distributions (if any) made in respect of such Class RS LTIP Unit prior to such vesting date.

F. Distributions With Respect to Class O LTIP Units . Except as set forth in the next sentence below, no distributions shall be made with respect to any Class O LTIP Units (other than distributions upon liquidation of the Partnership, which shall be made in accordance with Section 13.2.B ). Notwithstanding the immediately preceding sentence, if and to the extent that there is any

taxable income allocated pursuant to Article VI with respect to any Class O LTIP Units for any taxable year, each holder of such Class O LTIP Units shall be entitled to receive a distribution per Class O LTIP Unit equal to the lesser of (a) the distribution per Class A Unit with respect to such taxable year, or (b) an amount determined by the General Partner to be adequate to pay the federal, state and local income tax liabilities resulting from such taxable income allocation (with the distribution per Class O LTIP Unit to be the same for each Class O LTIP Unit) (referred to as an “ Class O LTIP Unit Tax Distribution ”).

G. Restriction on Distributions with Respect to LTIP Units . It is the intention of the Partners that distributions of profits in respect of LTIP Units be limited to the extent necessary so that each of the LTIP Units constitutes a “profits interest” for U.S. federal income tax purposes. In furtherance of the foregoing, and notwithstanding anything to the contrary in this Agreement, the General Partner shall, if necessary, limit distributions to the holders of LTIP Units so that such distributions do not exceed the available profits in respect of such LTIP Units. In the event that distributions in respect of LTIP Units are reduced pursuant to the preceding sentence, an amount equal to such excess distributions shall be treated as instead apportioned to the remaining Partners pro rata in accordance with their Partnership Units for the related fiscal year in accordance with the other provisions of this Agreement, and the General Partner shall make adjustments to future distributions to the holders of LTIP Units as promptly as practicable so that the holders of LTIP Units receive a distribution equal to the amount they would have received, in each case as if this Section 5.1G had not been in effect; provided that any distributions pursuant to this sentence shall be further subject to the provisions of this Section 5.1G . For purposes of this Agreement, “profits interest” means a right to receive distributions funded solely by profits of the Partnership generated after the grant in connection with the performance of services, satisfying the requirements as set forth in IRS Revenue Procedures 93-27 and 2001-43, or any future IRS guidance or other authority that supplements or supersedes the foregoing IRS Revenue Procedures.

Section 5.2

Amounts Withheld

All amounts withheld pursuant to the Code or any provisions of any state or local tax law and Section 10.5 with respect to any allocation, payment or distribution to the General Partner, the Limited Partners or Assignees shall be treated as amounts distributed to the General Partner, Limited Partners or Assignees, as the case may be, pursuant to Section 5.1 for all purposes under this Agreement.

Section 5.3

Distributions upon Liquidation

Proceeds from a Liquidating Event shall be distributed to the Partners in accordance with Section 13.2 .

Section 5.4

Revisions to Reflect Issuance of Partnership Interests

If the Partnership issues Partnership Interests to the General Partner or any Additional Limited Partner pursuant to Article IV hereof, the General Partner shall make such revisions to this Article V and the Partner Registry in the books and records of the Partnership as it deems necessary to reflect the terms of the issuance of such Partnership Interests. Such revisions shall not require the consent or approval of any other Partner.

ARTICLE VI

ALLOCATIONS

Section 6.1

Allocations for Capital Account Purposes

For purposes of maintaining the Capital Accounts and in determining the rights of the Partners among themselves, the Partnership’s items of income, gain, loss and deduction (computed in accordance with Exhibit B ) shall be allocated among the Partners in each taxable year (or portion thereof) as provided herein below.

A. Net Income . After giving effect to the special allocations set forth in Section 1 of Exhibit C of the Partnership Agreement and any special allocations required to be made pursuant to Sections 6.1.E and 6.1.F , Net Income shall be allocated:

(1)

first, to the General Partner to the extent that Net Losses previously allocated to the General Partner pursuant to Section 6.1.B(6) exceed Net Income previously allocated to the General Partner pursuant to this clause (1);

(2)

second, to each DRO Partner until the cumulative Net Income allocated to such DRO Partner under this clause (2) equals the cumulative Net Losses allocated to such DRO Partner under Section 6.1.B(5) (and among the DRO Partners, pro rata in proportion to their respective percentages of the cumulative Net Losses allocated to all DRO Partners pursuant to Section 6.1.B(5) hereof);

(3)

third, to the General Partner until the cumulative Net Income allocated under this clause (3) equals the cumulative Net Losses allocated the General Partner under Section 6.1.B(4) ;

(4)

fourth, to the holders of any Partnership Interests that are entitled to any preference upon liquidation until the cumulative Net Income allocated under this clause (4) equals the cumulative Net Losses allocated to such Partners under Section 6.1.B(3) ;

(5)

fifth, to the holders of any Partnership Interests that are entitled to any preference in distribution in accordance with the rights of any other class of Partnership Interests until each such Partnership Interest has been allocated, on a cumulative basis pursuant to this clause (5), Net Income equal to the amount of distributions payable that are attributable to the preference of such class of Partnership Interests, whether or not paid (and, within such class, pro rata in proportion to the respective Percentage Interests as of the last day of the period for which such allocation is being made);

(6)

sixth, to the holders of any Partnership Interests that are not entitled to any preference upon liquidation until the cumulative Net Income allocated under this clause (6) equals the cumulative Net Losses allocated to such Partners under Section 6.1.B(2) ; and

(7)

finally, with respect to Partnership Interests that are not entitled to any preference in distribution or with respect to which distributions are not limited to any preference in distribution, pro rata to each such class in accordance with the terms of such class (and, within such class, pro rata in proportion to the respective Percentage Interests as of the last day of the period for which such allocation is being made).

B. Net Losses . After giving effect to the special allocations set forth in Section 1 of Exhibit C of the Partnership Agreement and any special allocations required to be made pursuant to Sections 6.1.E and 6.1.F , Net Losses shall be allocated:

(1)

first, to the holders of Partnership Interests, in proportion to, and to the extent that, their share of the Net Income previously allocated pursuant to Section 6.1.A(7) exceeds, on a cumulative basis, the sum of (a) distributions with respect to such Partnership Interests pursuant to clause (ii) of Section 5.1.B and (b) Net Losses allocated under this clause (1);

(2)

second, with respect to classes of Partnership Interests that are not entitled to any preference in distribution upon liquidation, pro rata to each such class in accordance with the terms of such class (and, within such class, pro rata in proportion to the respective Percentage Interests as of the last day of the period for which such allocation is being made); provided , however , that Net Losses shall not be allocated to any Partner pursuant to this Section 6.1.B(2) to the extent that such allocation would cause such Partner to have an Adjusted Capital Account Deficit (or increase any existing Adjusted Capital Account Deficit) (determined in each case (i) by not including in the Partners’ Adjusted Capital Accounts any amount that a Partner is obligated to contribute to the Partnership with respect to any deficit in its Capital Account pursuant to Section 13.3 and (ii) in the case of a Partner who also holds classes of Partnership Interests that are entitled to any preferences in distribution upon liquidation, by subtracting from such Partners’ Adjusted Capital Account the amount of such preferred distribution to be made upon liquidation) at the end of such taxable year (or portion thereof);

(3)

third, with respect to classes of Partnership Interests that are entitled to any preference in distribution upon liquidation, in reverse order of the priorities of each such class (and within each such class, pro rata in proportion to their respective Percentage Interests as of the last day of the period for which such allocation is being made); provided , however , that Net Losses shall not be allocated to any Partner pursuant to this Section 6.1.B(3) to the extent that such allocation would cause such Partner to have an Adjusted Capital Account Deficit (or increase any existing Adjusted Capital Account Deficit) (determined in each case by not including in the Partners’ Adjusted Capital Accounts any amount that a Partner is obligated to contribute to the Partnership with respect to any deficit in its Capital Account pursuant to Section 13.3 ) at the end of such taxable year (or portion thereof);

(4)

fourth, to the General Partner in an amount equal to the excess of (a) the amount of the Partnership’s Recourse Liabilities over (b) the Aggregate DRO Amount;

(5)

fifth, to and among the DRO Partners, in proportion to their respective DRO Amounts, until such time as the DRO Partners as a group have been allocated cumulative Net Losses pursuant to this clause (5) equal to the Aggregate DRO Amount; and

(6)

thereafter, to the General Partner.

C. Allocation of Nonrecourse Debt . For purposes of Regulation Section 1.752-3(a), the Partners agree that Nonrecourse Liabilities of the Partnership in excess of the sum of (i) the amount of Partnership Minimum Gain and (ii) the total amount of Nonrecourse Built-in Gain shall be allocated by the General Partner by taking into account facts and circumstances relating to each Partner’s respective interest in the profits of the Partnership unless and to the extent provided otherwise in an agreement between any Partner and the Partnership. For this purpose, the General Partner shall have the sole and absolute discretion in any Fiscal Year to allocate such excess Nonrecourse Liabilities among the Partners in any manner permitted under Code Section 752 and the Regulations thereunder.

D. Recapture Income . Any gain allocated to the Partners upon the sale or other taxable disposition of any Partnership asset shall, to the extent possible after taking into account other required allocations of gain pursuant to Exhibit C , be characterized as Recapture Income in the same proportions and to the same extent as such Partners have been allocated any deductions directly or indirectly giving rise to the treatment of such gains as Recapture Income.

E. Special Allocations Regarding Class RS LTIP Units . Notwithstanding the provisions of Section 6.1.A(7) , but subject to the other provisions of Section 6.1.A , and before giving effect to any allocation required to be made pursuant to Section 6.1.F , Liquidating Gains shall first be allocated to each holder of Class RS LTIP Units until its Class RS LTIP Unit Economic Capital Account Balance (determined after giving effect to all allocations provided for in Section 6.1.A(1) through 6.1.A(6) ), to the extent attributable to its ownership of Class RS LTIP Units, is equal to the product of (i) the Class A Unit Economic Capital Account Balance multiplied by (ii) the number of its Class RS LTIP Units. Any such allocations shall be made among the holders of Class RS LTIP Units in proportion to the amounts required to be allocated to each Class RS LTIP Unit under this Section 6.1.E .

The parties agree that the intent of this Section 6.1.E is to cause the Capital Account balance associated with each Class RS LTIP Unit to be economically equivalent to the Capital Account balance associated with the General Partner’s Class A Units (on a per-Unit basis) as promptly as possible.

F. Special Allocations Regarding Class O LTIP Units.

(i) Notwithstanding the provisions of Section 6.1.A , Net Income shall be allocated pursuant to Section 6.1.A(7) to Class O LTIP Units that are Unvested Class O LTIP Units only in an amount equal to the excess, if any, of (i) the Net Income per Class A Unit allocated pursuant to Section 6.1.A(7) with respect to such taxable year to the Class A Units, over (ii) the distribution per Class A Unit made with respect to such taxable year, reduced by the amount of any Unvested Class O LTIP Unit Tax Distribution with respect to such taxable year.

(ii) Notwithstanding the provisions of Section 6.1.A(7) , but subject to the other provisions of Section 6.1.A and after giving effect to any allocations required to be made pursuant to Section 6.1.E , Liquidating Gains shall first be allocated to each holder of Class O LTIP Units until its Class O Unit Economic Capital Account Balance (determined after giving effect to all allocations provided for in Section 6.1.A(1) through 6.1.A(6) ), to the extent attributable to its ownership of Class O LTIP Units, is equal to the product of (i) the Class A Unit Profit Balance multiplied by (ii) the number of its Class O LTIP Units.

Any such allocations shall be made among the holders of Class O LTIP Units in proportion to the amounts required to be allocated to each Class O LTIP Unit under this Section 6.1.F .

The parties agree that the intent of this Section 6.1.F is to cause the Capital Account balance associated with each Class O LTIP Unit to be economically equivalent to the sum of (i) the increase, if any, in the Capital Account balance associated with the General Partner’s Class A Units (on a per-Unit basis) that has occurred from the time of the issuance of such Class O LTIP Units to the date of determination under this Section 6.1.F , plus (ii) the amount of distributions made during such period with respect to the General Partner’s Class A Units (on a per-Unit basis) that are not made from Net Income allocated to such Class A Units and therefore are a return of, or a reduction in, the capital per such Class A Unit.

Section 6.2

Revisions to Allocations to Reflect Issuance of Partnership Interests

If the Partnership issues Partnership Interests to the General Partner or any Additional Limited Partner pursuant to Article IV hereof, the General Partner shall make such revisions to this Article VI and the Partner Registry in the books and records of the Partnership as it deems necessary to reflect the terms of the issuance of such Partnership Interests, including making preferential allocations to classes of Partnership Interests that are entitled thereto. Such revisions shall not require the consent or approval of any other Partner.

ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

Section 7.1

Management

A. Powers of General Partner . Except as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Partnership are and shall be exclusively vested in the General Partner, and no Limited Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership. The General Partner may not be removed by the Limited Partners with or without cause. In addition to

the powers now or hereafter granted a general partner of a limited partnership under applicable law or which are granted to the General Partner under any other provision of this Agreement, the General Partner shall have full power and authority to do all things deemed necessary or desirable by it to conduct the business of the Partnership, to exercise all powers set forth in Section 3.2 and to effectuate the purposes set forth in Section 3.1 , including, without limitation:

(1)

the making of any expenditures, the lending or borrowing of money (including, without limitation, making prepayments on loans and borrowing money to permit the Partnership to make distributions to its Partners in such amounts as are required under Section 5.1.A or will permit the General Partner Entity (so long as the General Partner Entity chooses to attempt to qualify as a REIT) to avoid the payment of any U.S. federal income tax (including, for this purpose, any excise tax pursuant to Section 4981 of the Code) and to make distributions to its shareholders sufficient to permit the General Partner Entity to maintain its REIT status), the assumption or guarantee of, or other contracting for, indebtedness and other liabilities including, without limitation, the assumption or guarantee of the debt of the General Partner, its Subsidiaries or the Partnership’s Subsidiaries, the issuance of evidences of indebtedness (including the securing of same by mortgage, deed of trust or other lien or encumbrance on the Partnership’s assets) and the incurring of any obligations the General Partner deems necessary for the conduct of the activities of the Partnership;

(2)

the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership;

(3)

the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or all of the assets of the Partnership (including acquisition of any new assets, the exercise or grant of any conversion, option, privilege or subscription right or other right available in connection with any assets at any time held by the Partnership) or the merger or other combination of the Partnership or any Subsidiary of the Partnership with or into another entity on such terms as the General Partner deems proper;

(4)

the use of the assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with the terms of this Agreement and on any terms it sees fit, including, without limitation, the financing of the conduct of the operations of the General Partner, the Partnership or any of the Partnership’s Subsidiaries, the lending of funds to other Persons (including, without limitation, the General Partner, its Subsidiaries, the Partnership’s Subsidiaries and any of their Affiliates) and the repayment of obligations of the Partnership and its Subsidiaries and any other Person in which the Partnership has an equity investment and the making of capital contributions to its Subsidiaries;

(5)

the management, operation, leasing, landscaping, repair, alteration, demolition or improvement of any real property or improvements owned by the Partnership or any Subsidiary of the Partnership or any Person in which the Partnership has made a direct or indirect equity investment;

(6)

the negotiation, execution, and performance of any contracts, conveyances or other instruments that the General Partner considers useful or necessary to the conduct of the Partnership’s operations or the implementation of the General Partner’s powers under this Agreement, including contracting with contractors, developers, consultants, accountants, legal counsel, other professional advisors and other agents and the payment of their expenses and compensation out of the Partnership’s assets;

(7)

the mortgage, pledge, encumbrance or hypothecation of any assets of the Partnership;

(8)

the distribution of Partnership cash or other Partnership assets in accordance with this Agreement;

(9)

the holding, managing, investing and reinvesting of cash and other assets of the Partnership;

(10)

the collection and receipt of revenues and income of the Partnership;

(11)

the selection, designation of powers, authority and duties and the dismissal of employees of the Partnership (including, without limitation, employees having titles such as “president,” “vice president,” “secretary” and “treasurer”) and agents, outside attorneys, accountants, consultants and contractors of the Partnership and the determination of their compensation and other terms of employment or hiring;

(12)

the maintenance of such insurance for the benefit of the Partnership and the Partners as it deems necessary or appropriate;

(13)

the formation of, or acquisition of an interest (including non-voting interests in entities controlled by Affiliates of the Partnership or the General Partner or third parties) in, and the contribution of property to, any further limited or general partnerships, joint ventures, limited liability companies or other relationships that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of funds or property to, or making of loans to, its Subsidiaries and any other Person in which it has an equity investment from time to time, or the incurrence of indebtedness on behalf of such Persons or the guarantee of the obligations of such Persons); provided , however , that as long as the General Partner Entity has determined to attempt to continue to qualify as a REIT, the Partnership may not engage in any such formation, acquisition or contribution that would cause the General Partner Entity to fail to qualify as a REIT;

(14)

the control of any matters affecting the rights and obligations of the Partnership, including the settlement, compromise, submission to arbitration or any other form of

dispute resolution or abandonment of any claim, cause of action, liability, debt or damages due or owing to or from the Partnership, the commencement or defense of suits, legal proceedings, administrative proceedings, arbitrations or other forms of dispute resolution, the representation of the Partnership in all suits or legal proceedings, administrative proceedings, arbitrations or other forms of dispute resolution, the incurring of legal expense and the indemnification of any Person against liabilities and contingencies to the extent permitted by law;

(15)

the determination of the fair market value of any Partnership property distributed in kind, using such reasonable method of valuation as the General Partner may adopt;

(16)

the exercise, directly or indirectly, through any attorney-in-fact acting under a general or limited power of attorney, of any right, including the right to vote, appurtenant to any assets or investment held by the Partnership;

(17)

the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of or in connection with any Subsidiary of the Partnership or any other Person in which the Partnership has a direct or indirect interest, individually or jointly with any such Subsidiary or other Person;

(18)

the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of any Person in which the Partnership does not have any interest pursuant to contractual or other arrangements with such Person;

(19)

the making, executing and delivering of any and all deeds, leases, notes, deeds to secure debt, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases or other legal instruments or agreements in writing necessary or appropriate in the judgment of the General Partner for the accomplishment of any of the powers of the General Partner enumerated in this Agreement;

(20)

the distribution of cash to acquire Partnership Units held by a Limited Partner in connection with a Limited Partner’s exercise of its Redemption Right under Section 8.6 ;

(21)

the determination regarding whether a payment to a Partner who exercises its Redemption Right under Section 8.6 that is assumed by the General Partner Entity will be paid in the form of the Cash Amount or the Shares Amount, except as such determination may be limited by Section 8.6 .

(22)

the acquisition of Partnership Interests in exchange for cash, debt instruments and other property;

(23)

the maintenance of the Partner Registry in the books and records of the Partnership to reflect the Capital Contributions and Percentage Interests of the Partners as the same are adjusted from time to time to the extent necessary to reflect redemptions, Capital Contributions, the issuance of Partnership Units, the admission of any Additional Limited Partner or any Substituted Limited Partner or otherwise; and

(24)

the registration of any class of securities of the Partnership under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and the listing of any debt securities of the Partnership on any exchange.

B. No Approval by Limited Partners . Each of the Limited Partners agrees that the General Partner is authorized to execute, deliver and perform the above-mentioned agreements and transactions on behalf of the Partnership without any further act, approval or vote of the Partners, notwithstanding any other provision of this Agreement, the Act or any applicable law, rule or regulation, to the full extent permitted under the Act or other applicable law. The execution, delivery or performance by the General Partner or the Partnership of any agreement authorized or permitted under this Agreement shall be in the sole and absolute discretion of the General Partner without consideration of any other obligation or duty, fiduciary or otherwise, of the Partnership or the Limited Partners and shall not constitute a breach by the General Partner of any duty that the General Partner may owe the Partnership or the Limited Partners or any other Persons under this Agreement or of any duty stated or implied by law or equity.

C. Insurance . At all times from and after the date hereof, the General Partner may cause the Partnership to obtain and maintain (i) casualty, liability and other insurance on the properties of the Partnership and its Subsidiaries and (ii) liability insurance for the Indemnitees hereunder, and (iii) such other insurance as the General Partner, in its sole and absolute discretion, determines to be necessary.

D. Working Capital and Other Reserves . At all times from and after the date hereof, the General Partner may cause the Partnership to establish and maintain working capital reserves in such amounts as the General Partner, in its sole and absolute discretion, deems appropriate and reasonable from time to time, including upon liquidation of the Partnership under Article XIII .

E. No Obligations to Consider Tax Consequences of Limited Partners . In exercising its authority under this Agreement, the General Partner (which for the purposes of this Section 7.1.E shall include, the Board of Directors of the General Partner) may, but shall be under no obligation to, take into account the tax consequences to any Partner (including the General Partner) of any action taken (or not taken) by the General Partner. The General Partner and the Partnership shall not have liability to a Limited Partner for monetary or other damages or otherwise for losses sustained, liabilities incurred or benefits not derived by such Limited Partner in connection with any decisions, provided , however , that the General Partner has acted in good faith and pursuant to its authority under this Agreement and any decisions or actions taken or not taken in accordance with the terms of this Agreement shall not constitute a breach of any duty owed to the Partnership or the Limited Partners by law or equity, fiduciary or otherwise.

Section 7.2

Certificate of Limited Partnership

The General Partner has previously filed the Certificate of Limited Partnership with the Secretary of State of Delaware. To the extent that such action is determined by the General Partner

to be reasonable and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate of Limited Partnership and do all the things to maintain the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) under the laws of the State of Delaware and each other state, the District of Columbia or other jurisdiction in which the Partnership may elect to do business or own property. Subject to the terms of Section 8.5.A(4) , the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Limited Partnership or any amendment thereto to any Limited Partner. The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents as may be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware and any other state, the District of Columbia or other jurisdiction in which the Partnership may elect to do business or own property.

Section 7.3

Title to Partnership Assets

Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partners, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner or one or more nominees, as the General Partner may determine, including Affiliates of the General Partner. The General Partner hereby declares and warrants that any Partnership assets for which legal title is held in the name of the General Partner or any nominee or Affiliate of the General Partner shall be held by the General Partner for the use and benefit of the Partnership in accordance with the provisions of this Agreement. All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which legal title to such Partnership assets is held.

Section 7.4

Reimbursement of the General Partner

A. No Compensation . Except as provided in this Section 7.4 and elsewhere in this Agreement (including the provisions of Articles V and VI regarding distributions, payments and allocations to which it may be entitled), the General Partner shall not receive payments from the Partnership or otherwise be compensated for its services as the general partner of the Partnership.

B. Responsibility for Partnership, General Partner and General Partner Entity Expenses . The Partnership shall be responsible for and shall pay all expenses relating to the Partnership’s organization, the ownership of its assets and its operations. The General Partner shall be reimbursed on a monthly basis, or such other basis as the General Partner may determine in its sole and absolute discretion, for all expenses it incurs relating to or resulting from the ownership and operation of, or for the benefit of, the Partnership (including, without limitation, (i) expenses relating to the ownership of interests in and operation of the Partnership, (ii) compensation of the officers and employees including, without limitation, payments under any stock option or incentive plan that provides for stock units, or other phantom stock, pursuant to which employees will receive payments based upon dividends on or the value of Shares, (iii) auditing expenses, (iv) director fees and expenses of the General Partner Entity, (v) all costs and expenses of being a public company,

including costs of filings with the Securities and Exchange Commission, reports and other distributions to its shareholders, and (vi) all costs and expenses associated with litigation involving the General Partner and the General Partner Entity, the Partnership or any Subsidiary); provided , however , that (i) the amount of any such reimbursement shall be reduced by (x) any interest earned by the General Partner with respect to bank accounts or other instruments or accounts held by it on behalf of the Partnership as permitted in Section 7.5.A (which interest is considered to belong to the Partnership and shall be paid over to the Partnership to the extent not applied to reimburse the General Partner for expenses hereunder); and (y) any amount derived by the General Partner from any investments permitted in Section 7.5.A ; (ii) if the General Partner or General Partner Entity qualifies as a REIT, the Partnership shall not be responsible for any taxes that the General Partner Entity would not have been required to pay if that entity qualified as a REIT for federal income tax purposes or any taxes imposed on the General Partner or General Partner Entity by reason of that entity’s failure to distribute to its shareholders an amount equal to its taxable income; (iii) the Partnership shall not be responsible for expenses or liabilities incurred by the General Partner in connection with any business or assets of the General Partner other than its ownership of Partnership Interests or operation of the business of the Partnership or ownership of interests in Qualified Assets to the extent permitted in Section 7.5.A ; and (iv) the Partnership shall not be responsible for any expenses or liabilities of the General Partner that are excluded from the scope of the indemnification provisions of Section 7.7.A by reason of the provisions of clause (i), (ii) or (iii) thereof. The General Partner shall determine in good faith the amount of expenses incurred by it or the General Partner Entity related to the ownership of Partnership Interests or operation of, or for the benefit of, the Partnership. If certain expenses are incurred that are related both to the ownership of Partnership Interests or operation of, or for the benefit of, the Partnership and to the ownership of other assets (other than Qualified Assets as permitted under Section 7.5.A ) or the operation of other businesses, such expenses will be allocated to the Partnership and such other entities (including the General Partner and General Partner Entity) owning such other assets or businesses in such a manner as the General Partner in its sole and absolute discretion deems fair and reasonable. Such reimbursements shall be in addition to any reimbursement to the General Partner and the General Partner Entity pursuant to Section 10.3.C and as a result of indemnification pursuant to Section 7.7 . All payments and reimbursements hereunder shall be characterized for U.S. federal income tax purposes as expenses of the Partnership incurred on its behalf, and not as expenses of the General Partner or General Partner Entity.

C. Partnership Interest Issuance Expenses . The General Partner shall also be reimbursed for all expenses it incurs relating to any issuance of Partnership Interests, Shares, Debt of the Partnership, Funding Debt of the General Partner or the General Partner Entity or rights, options, warrants or convertible or exchangeable securities pursuant to Article IV (including, without limitation, all costs, expenses, damages and other payments resulting from or arising in connection with litigation related to any of the foregoing), all of which expenses are considered by the Partners to constitute expenses of, and for the benefit of, the Partnership.

D. Repurchases of Shares . If the General Partner Entity exercises its rights under its organizational documents (or, if the General Partner is not the General Partner Entity, the organizational documents of the General Partner Entity) to purchase Shares or otherwise elects or is required to purchase from its shareholders Shares in connection with a share repurchase or similar

program or otherwise, or for the purpose of delivering such Shares to satisfy an obligation under any dividend reinvestment or equity purchase program adopted by the General Partner Entity, any employee equity purchase plan adopted by the General Partner Entity or any similar obligation or arrangement undertaken by the General Partner Entity in the future, the purchase price paid by the General Partner Entity for those Shares and any other expenses incurred by the General Partner Entity in connection with such purchase shall be considered expenses of the Partnership and shall be reimbursable to the General Partner Entity, subject to the conditions that: (i) if those Shares subsequently are to be sold by the General Partner Entity, the General Partner Entity shall pay to the Partnership any proceeds received by the General Partner Entity for those Shares (provided, however, that a transfer of Shares for Partnership Units pursuant to Section 8.6 would not be considered a sale for such purposes); and (ii) if such Shares are required to be cancelled pursuant to applicable law or are not retransferred by the General Partner Entity within thirty (30) days after the purchase thereof, the General Partner shall cause the Partnership to cancel a number of Partnership Units (rounded to the nearest whole Partnership Unit) held by the General Partner equal to the product attained by multiplying the number of those Shares by a fraction, the numerator of which is one and the denominator of which is the Conversion Factor.

E. Reimbursement not a Distribution . Except as set forth in the succeeding sentence, if and to the extent any reimbursement made pursuant to this Section 7.4 is determined for U.S. federal income tax purposes not to constitute a payment of expenses of the Partnership, the amount so determined shall constitute a guaranteed payment with respect to capital within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners and shall not be treated as a distribution for purposes of computing the Partners’ Capital Accounts. Amounts deemed paid by the Partnership to the General Partner in connection with redemption of Partnership Units pursuant to Section 7.5.B shall be treated as a distribution for purposes of computing the Partner’s Capital Accounts.

F. Funding for Certain Capital Transactions . In the event that the General Partner Entity shall undertake to acquire (whether by merger, consolidation, purchase, or otherwise) the assets or equity interests of another Person and such acquisition shall require the payment of cash by the General Partner Entity (whether to such Person or to any other selling party or parties in such transaction or to one or more creditors, if any, of such Person or such selling party or parties), (a) the Partnership shall advance to the General Partner Entity the cash required to consummate such acquisition if, and to the extent that, such cash is not to be obtained by the General Partner Entity through an issuance of Shares described in Section 4.2 or pursuant to a transaction described in Section 7.5.B , (b) the General Partner Entity shall, upon consummation of such acquisition, transfer to the Partnership (or cause to be transferred to the Partnership), in full and complete satisfaction of such advance and as required by Section 7.5 , the assets or equity interests of such Person acquired by the General Partner Entity in such acquisition (or equity interests in Persons owning all of such assets or equity interests), and (c) pursuant to and in accordance with Section 4.2 and Section 7.5.B , the Partnership shall issue to the General Partner, Partnership Interests and/or rights, options, warrants or convertible or exchangeable securities of the Partnership having designations, preferences and other rights that are substantially the same as those of any additional Shares, other equity securities, New Securities and/or Convertible Funding Debt, as the case may be, issued by the General Partner Entity in connection with such acquisition (whether issued directly to participants in

the acquisition transaction or to third parties in order to obtain cash to complete the acquisition). In addition to, and without limiting, the foregoing, in the event that the General Partner Entity engages in a transaction in which (x) the General Partner Entity (or a wholly owned direct or indirect Subsidiary of the General Partner Entity) merges with another entity (referred to as the “ Parent Entity ”) that is organized in the “UPREIT format” (i.e., where the Parent Entity holds substantially all of its assets and conducts substantially all of its operations through a partnership, limited liability company or other entity (referred to as an “ Operating Entity ”)) and the General Partner Entity survives such merger, (y) such Operating Entity merges with or is otherwise acquired by the Partnership in exchange in whole or in part for Partnership Interests, and (z) the General Partner Entity is required or elects to pay part of the consideration in connection with such merger involving the Parent Entity in the form of cash and part of the consideration in the form of Shares, the Partnership shall distribute to the General Partner with respect to its existing Partnership Interest an amount of cash sufficient to complete such transaction and the General Partner shall cause the Partnership to cancel a number of Partnership Units (rounded to the nearest whole number) held by the General Partner equal to the product attained by multiplying the number of additional Shares of the General Partner Entity that the General Partner Entity would have issued to the Parent Entity or the owners of the Parent Entity in such transaction if the entire consideration therefor were to have been paid in Shares by a fraction, the numerator of which is one and the denominator of which is the Conversion Factor.

Section 7.5

Outside Activities of the General Partner; Relationship of Shares to Partnership Units; Funding Debt

A. General . Without the Consent of the Outside Limited Partners, the General Partner shall not, directly or indirectly, enter into or conduct any business other than in connection with the ownership, acquisition and disposition of Partnership Interests as General Partner or Limited Partner and the management of the business of the Partnership and such activities as are incidental thereto. Without Consent of the Outside Limited Partners, the assets of the General Partner shall be limited to Partnership Interests and permitted debt obligations of the Partnership (as contemplated by Section 7.5.F ); provided , however , that the General Partner shall be permitted to hold such bank accounts or similar instruments or accounts in its name as it deems necessary to carry out its responsibilities and purposes as contemplated under this Agreement and its organizational documents (provided that accounts held on behalf of the Partnership to permit the General Partner to carry out its responsibilities under this Agreement shall be considered to belong to the Partnership and the interest earned thereon shall, subject to Section 7.4.B , be applied for the benefit of the Partnership); and, provided further that, the General Partner shall be permitted to acquire Qualified Assets.

B. Repurchase of Shares and Other Securities . If the General Partner Entity exercises its rights under its organizational documents (or, if the General Partner is not the General Partner Entity, the organizational documents of the General Partner Entity) to purchase Shares or otherwise elects to purchase from the holders thereof Shares, other equity securities of the General Partner Entity, New Securities or Convertible Funding Debt, then the General Partner Entity shall cause the Partnership to purchase from the General Partner Entity (a) in the case of a purchase of Shares, that number of Partnership Units of the appropriate class equal to the product obtained by multiplying the number of

Shares purchased by the General Partner Entity times a fraction, the numerator of which is one and the denominator of which is the Conversion Factor, or (b) in the case of the purchase of any other securities on the same terms and for the same aggregate price that the General Partner Entity purchased such securities.

C. Equity Incentive Plan . If, at any time or from time to time, the General Partner Entity sells or otherwise issues Shares pursuant to the Equity Incentive Plan, the General Partner Entity shall transfer or cause to be transferred the proceeds of the sale of such Shares, if any, to the Partnership as an additional Capital Contribution in exchange for an amount of additional Partnership Units equal to the number of Shares so sold divided by the Conversion Factor. If the Partnership or the General Partner Entity acquires Shares as a result of the forfeiture of such Shares under the Equity Incentive Plan, then the General Partner shall cause the Partnership to cancel, without payment of any consideration to the General Partner, that number of Partnership Units of the appropriate class equal to the number of Shares so acquired, and, if the Partnership acquired such Shares, it shall transfer such Shares to the General Partner for cancellation.

D. Issuances of Shares and Other Securities . So long as the common shares of the General Partner Entity are Publicly Traded, the General Partner Entity shall not grant, award or issue any additional Shares (other than Shares issued pursuant to Section 8.6 hereof or pursuant to a dividend or distribution (including any share split) of Shares to all of its shareholders that results in an adjustment to the Conversion Factor pursuant to clause (i), (ii) or (iii) of the definition thereof), other equity securities of the General Partner Entity, New Securities or Convertible Funding Debt unless (i) the General Partner shall cause, pursuant to Section 4.2.A hereof, the Partnership to issue to the General Partner, Partnership Interests or rights, options, warrants or convertible or exchangeable securities of the Partnership having designations, preferences and other rights, all such that the economic interests are substantially the same as those of such additional Shares, other equity securities, New Securities or Convertible Funding Debt, as the case may be, and (ii) in exchange therefor, the General Partner Entity transfers or otherwise causes to be transferred to the Partnership, as an additional Capital Contribution, the proceeds from the grant, award, or issuance of such additional Shares, other equity securities, New Securities or Convertible Funding Debt, as the case may be, or from the exercise of rights contained in such additional Shares, other equity securities, New Securities or Convertible Funding Debt, as the case may be (or, in the case of an acquisition described in Section 7.4.F in which all or a portion of the cash required to consummate such acquisition is to be obtained by the General Partner Entity through an issuance of Shares described in Section 4.2 , the General Partner Entity complies with such Section 7.4.F ). Without limiting the foregoing, the General Partner Entity is expressly authorized to issue additional Shares, other equity securities, New Securities or Convertible Funding Debt, as the case may be, for less than fair market value, and the General Partner is expressly authorized, pursuant to Section 4.2.A hereof, to cause the Partnership to issue to the General Partner corresponding Partnership Interests (for example, and not by way of limitation, the issuance of Shares and corresponding Partnership Units pursuant to a share purchase plan providing for purchases of Shares, either by employees or shareholders, at a discount from fair market value or pursuant to employee share options that have an exercise price that is less than the fair market value of the Shares, either at the time of issuance or at the time of exercise), as long as (a) the General Partner concludes in good faith that such issuance is in the interests of the General Partner and the Partnership and (b) the General Partner Entity transfers all proceeds from any such issuance or exercise to the Partnership as an additional Capital Contribution.

E. Funding Debt . The General Partner or the General Partner Entity or any wholly owned Subsidiary of either of them may incur a Funding Debt, including, without limitation, a Funding Debt that is convertible into Shares or otherwise constitutes a class of New Securities (“ Convertible Funding Debt ”), subject to the condition that the General Partner, the General Partner Entity or such Subsidiary, as the case may be, lend to the Partnership the net proceeds of such Funding Debt; provided , however , that Convertible Funding Debt shall be issued in accordance with the provisions of Section 7.5.C above; and, provided further that, if the General Partner Entity attempts to qualify as a REIT, the General Partner, the General Partner Entity or such Subsidiary shall not be obligated to lend the net proceeds of any Funding Debt to the Partnership in a manner that would be inconsistent with the General Partner’s or General Partner Entity’s ability to remain qualified as a REIT. If the General Partner, General Partner Entity or such Subsidiary enters into any Funding Debt, the loan to the Partnership shall be on comparable terms and conditions, including interest rate, repayment schedule, costs and expenses and other financial terms, as are applicable with respect to or incurred in connection with such Funding Debt.

F. Capital Contributions of the General Partner . The Capital Contributions by the General Partner pursuant to Sections 7.5.C and 7.5.D will be deemed to equal the cash contributed by the General Partner plus, in the case of cash contributions funded by an offering of any equity interests in or other securities of the General Partner Entity, the offering costs attributable to the cash contributed to the Partnership to the extent not reimbursed pursuant to Section 7.4.C and (ii) in the case of Partnership Units issued pursuant to Section 7.5.C , an amount equal to the difference between the Value of the Shares sold pursuant to the Equity Incentive Plan and the net proceeds of such sale.

G. Tax Loans . The General Partner or the General Partner Entity may in its sole and absolute discretion, cause the Partnership to make an interest free loan to the General Partner or the General Partner Entity, as applicable, provided that the proceeds of such loans are used to satisfy any tax liabilities of the General Partner or the General Partner Entity, as applicable.

Section 7.6

Transactions with Affiliates

A. Transactions with Certain Affiliates . Except as expressly permitted by this Agreement with respect to any non-arms’ length transaction with an Affiliate, the Partnership shall not, directly or indirectly, sell, transfer or convey any property to, or purchase any property from, or borrow funds from, or lend funds to, any Partner or any Affiliate of the Partnership that is not also a Subsidiary of the Partnership, except pursuant to transactions that are determined in good faith by the General Partner to be on terms that are fair and reasonable.

B. Conflict Avoidance . The General Partner is expressly authorized to enter into, in the name and on behalf of the Partnership, a non-competition arrangement and other conflict avoidance agreements with various Affiliates of the Partnership and General Partner on such terms as the General Partner, in its sole and absolute discretion, believes are advisable.

C. Benefit Plans Sponsored by the Partnership . The General Partner in its sole and absolute discretion and without the approval of the Limited Partners, may propose and adopt on behalf of the Partnership employee benefit plans funded by the Partnership for the benefit of employees of the General Partner, the Partnership, Subsidiaries of the Partnership or any Affiliate of any of them.

Section 7.7

Indemnification

A. General . The Partnership shall indemnify each Indemnitee to the fullest extent provided by the Act from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including, without limitation, attorneys’ fees and other legal fees and expenses), judgments, fines, settlements and other amounts, arising from or in connection with any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, incurred by the Indemnitee and relating to the Partnership or the General Partner General Partner Entity or the or the operation of, or the ownership of property by, the Indemnitee, Partnership or the General Partner or the General Partner Entity as set forth in this Agreement in which any such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless it is established by a final determination of a court of competent jurisdiction that: (i) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty, (ii) the Indemnitee actually received an improper personal benefit in money, property or services or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful. Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee, pursuant to a loan guarantee, contractual obligation for any indebtedness or other obligation or otherwise, for any indebtedness of the Partnership or any Subsidiary of the Partnership (including, without limitation, any indebtedness which the Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General Partner is hereby authorized and empowered, on behalf of the Partnership, to enter into one or more indemnity agreements consistent with the provisions of this Section 7.7 in favor of any Indemnitee having or potentially having liability for any such indebtedness. The termination of any proceeding by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth in this Section 7.7.A . The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the Indemnitee acted in a manner contrary to that specified in this Section 7.7.A with respect to the subject matter of such proceeding. Any indemnification pursuant to this Section 7.7 shall be made only out of the assets of the Partnership, and any insurance proceeds from the liability policy covering the General Partner and any Indemnitee, and neither the General Partner nor any Limited Partner shall have any obligation to contribute to the capital of the Partnership or otherwise provide funds to enable the Partnership to fund its obligations under this Section 7.7 .

B. Reimbursement of Expenses . Reasonable expenses expected to be incurred by an Indemnitee shall be paid or reimbursed by the Partnership in advance of the final disposition of any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative made or threatened against an Indemnitee upon receipt by the Partnership of (i) a written affirmation

by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in this Section 7.7 has been met and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.

C. No Limitation of Rights . The indemnification provided by this Section 7.7 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written agreement pursuant to which such Indemnitee is indemnified. The Partnership hereby acknowledges that the certain of directors of the General Partner Entity, including those affiliated with GA QTS Interholdco, LLC (the “ Specified Directors ”) may have certain rights to indemnification and advancement of expenses provided by GA QTS Interholdco, LLC and certain of its Affiliates (collectively, the “ General Atlantic Indemnitors ”). The Partnership hereby agrees and acknowledges that, with respect to matters for which it is required to provide indemnity pursuant to the terms of this Agreement, (i) it shall be the indemnitor of first resort with respect to the Specified Directors (i.e., its obligations to the Specified Directors are primary and any obligation of the General Atlantic Indemnitors to advance expenses or to provide indemnification for expenses or liabilities incurred by the Specified Directors are secondary), (ii) it shall advance the full amount of expenses incurred and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by the Specified Directors to the extent required by the terms of this Agreement (or any other agreement between the Partnership and the Specified Directors), without regard to any rights the Specified Directors may have against the General Atlantic Indemnitors and (iii) it irrevocably waives, relinquishes and releases the General Atlantic Indemnitors from any and all claims against the General Atlantic Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof related to the Partnership’s obligations set forth in clauses (i) and (ii) in this Section 7.7.C . The Partnership further agrees that no advancement or payment by the General Atlantic Indemnitors on behalf of the Specified Directors with respect to any claim for which the Specified Directors have sought indemnification from the Partnership shall affect the foregoing and the General Atlantic Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Specified Directors against the Partnership

D. Insurance . The Partnership may purchase and maintain insurance on behalf of the Indemnitees and such other Persons as the General Partner shall determine against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Indemnitee or Person against such liability under the provisions of this Agreement.

E. No Personal Liability for Partners . In no event may an Indemnitee subject any of the Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.

F. Interested Transactions . An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

G. Benefit . The provisions of this Section 7.7 are also for the benefit of the Indemnitees, their employees, officers, directors, trustees, heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 7.7 , or any provision hereof, shall be prospective only and shall not in any way affect the limitation on the Partnership’s liability to any Indemnitee under this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or related to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

H. Indemnification Payments Not Distributions . If and to the extent any payments to the General Partner pursuant to this Section 7.7 constitute gross income to the General Partner (as opposed to the repayment of advances made on behalf of the Partnership), such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.

I. Exception to Indemnification . Notwithstanding anything to the contrary in this Agreement, the General Partner shall not be entitled to indemnification hereunder for any loss, claim, damage, liability or expense for which the General Partner is obligated to indemnify the Partnership under any other agreement between the General Partner and the Partnership.

Section 7.8

Liability of the General Partner

A. General . Notwithstanding anything to the contrary set forth in this Agreement, the General Partner (which for the purposes of this Section 7.8 shall include the directors, trustees and officers of the General Partner) shall not be liable for monetary or other damages to the Partnership, any Partners or any Assignees for losses sustained, liabilities incurred or benefits not derived as a result of errors in judgment or mistakes of fact or law or of any act or omission unless the General Partner acted in bad faith and the act or omission was material to the matter giving rise to the loss, liability or benefit not derived.

B. Obligation to Consider Interests of General Partner Entity . The Limited Partners expressly acknowledge that the General Partner, in considering whether to dispose of any of the Partnership assets, shall take into account the tax consequences to the General Partner Entity of any such disposition and shall have no liability whatsoever to the Partnership or any Limited Partner for decisions that are based upon or influenced by such tax consequences.

C. No Obligation to Consider Separate Interests of Limited Partners or Shareholders . The Limited Partners expressly acknowledge that the General Partner is acting on behalf of the Partnership, its equityholders its equityholders (and, to the extent separate, the equityholders of the General Partner Entity), and the equityholders of the Limited Partners, and that, except as otherwise set forth herein, the General Partner is under no obligation to consider the separate interests of the Limited Partners (including, without limitation, the tax consequences to Limited Partners or

Assignees) in deciding whether to cause the Partnership to take (or decline to take) any actions, and that the General Partner shall not be liable for monetary or other damages for losses sustained, liabilities incurred or benefits not derived by Limited Partners in connection with any decisions or actions made or taken or declined to be made or taken, provided that the General Partner Entity has acted in good faith and pursuant to its authority under this Agreement and any decisions or actions taken or not taken in accordance with the terms of this Agreement shall not constitute a breach of any duty owed to the Partnership or the Limited Partners by law or equity, fiduciary or otherwise.

D. Actions of Agents . Subject to its obligations and duties as General Partner set forth in Section 7.1.A , the General Partner may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents. The General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the General Partner in good faith.

E. Effect of Amendment . Notwithstanding any other provision contained herein, any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the General Partner’s liability to the Partnership and the Limited Partners under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

F. Limitations of Fiduciary Duty . Sections 7.1.B , 7.1.E and this Section 7.8 and any other Section of this Agreement limiting the liability of the General Partner and/or its trustees, directors and officers shall constitute an express limitation of any duties, fiduciary or otherwise, that they would owe the Partnership or the Limited Partners if such duty would be imposed by any law, in equity or otherwise.

Section 7.9

Other Matters Concerning the General Partner

A. Reliance on Documents . The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.

B. Reliance on Advisors . The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which the General Partner reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.

C. Action Through Agents . The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and a duly appointed attorney or attorneys-in-fact. Each such attorney shall, to the extent provided by the General Partner in the power of attorney, have full power and authority to do and perform all and every act and duty that is permitted or required to be done by the General Partner hereunder.

D. Actions to Maintain REIT Status or Avoid Taxation of the General Partner Entity . Notwithstanding any other provisions of this Agreement or the Act, if the General Partner Entity attempts to qualify as a REIT, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting on behalf of the Partnership undertaken in the good faith belief that such action or omission is necessary or advisable in order (i) to protect the ability of the General Partner Entity to qualify as a REIT or (ii) to allow the General Partner Entity to avoid incurring any liability for taxes under Section 857 or 4981 of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners.

Section 7.10

Reliance by Third Parties

Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner has full power and authority, without consent or approval of any other Partner or Person, to encumber, sell or otherwise use in any manner any and all assets of the Partnership, to enter into any contracts on behalf of the Partnership and to take any and all actions on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner as if the General Partner were the Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all defenses or other remedies that may be available against such Person to contest, negate or disaffirm any action of the General Partner in connection with any such dealing, in each case except to the extent that such action imposes, or purports to impose, liability on the Limited Partner. In no event shall any Person dealing with the General Partner or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the General Partner or its representatives. Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (i) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (ii) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership, and (iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.

Section 7.11

Loans by Third Parties

The Partnership may incur Debt, or enter into similar credit, guarantee, financing or refinancing arrangements for any purpose (including, without limitation, in connection with any acquisition of property and any borrowings from, or guarantees of Debt of the General Partner or any of its Affiliates) with any Person upon such terms as the General Partner determines appropriate.

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 8.1

Limitation of Liability

The Limited Partners shall have no liability under this Agreement except as expressly provided in this Agreement, including Section 10.5 , or under the Act.

Section 8.2

Management of Business

No Limited Partner or Assignee (other than the General Partner, any of its Affiliates, or any officer, director, employee, partner, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such) shall take part in the operation, management or control (within the meaning of the Act) of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership. The transaction of any such business by the General Partner, any of its Affiliates or any officer, director, employee, partner, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such, shall not affect, impair or eliminate the limitations on the liability of the Limited Partners or Assignees under this Agreement.

Section 8.3

Outside Activities of Limited Partners

Subject to Section 7.5 hereof, and subject to any agreements entered into pursuant to Section 7.6.B hereof and to any other agreements entered into by a Limited Partner or its Affiliates with the General Partner, the Partnership or a Subsidiary, any Limited Partner (other than the General Partner) and any officer, director, manager, employee, agent, trustee, Affiliate, member or shareholder of any 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 or indirect competition with the Partnership. Neither the Partnership nor any Partners shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner, officer, director, manager, employee, agent, trustee, Affiliate, member, shareholder or Assignee of any Limited Partner. None of the Limited Partners (other than the General Partner) or any other Person shall have any rights by virtue of this Agreement or the partnership relationship established hereby in any business ventures of any other Person (other than the General Partner to the extent expressly provided herein), and no Person (other than the General Partner) shall have any obligation pursuant to this Agreement to offer any interest in any such business venture to the Partnership, any Limited Partner or any such other Person, even if such opportunity is of a character which, if presented to the Partnership, any Limited Partner or such other Person, could be taken by such Person.

Section 8.4

Return of Capital

Except pursuant to the right of redemption set forth in Section 8.6 , no Limited Partner shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent of distributions made pursuant to this Agreement or upon termination of the Partnership as provided

herein. No Limited Partner or Assignee shall have priority over any other Limited Partner or Assignee either as to the return of Capital Contributions (except as permitted by Section 4.2.A ) or, except to the extent provided by Exhibit C or as permitted by Sections 4.2.A, 5.1.B(i), 6.1.A and 6.1.B , or otherwise expressly provided in this Agreement, as to profits, losses, distributions or credits.

Section 8.5

Rights of Limited Partners Relating to the Partnership

A. General . In addition to other rights provided by this Agreement or by the Act, and except as limited by Section 8.5.D , each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest as a limited partner in the Partnership, upon written demand with a statement of the purpose of such demand and at such Limited Partner’s own expense:

(1)

to obtain a copy of the Partnership’s U.S. federal, state and local income tax returns for each Fiscal Year;

(2)

to obtain a current list of the name and last known business, residence or mailing address of each Partner;

(3)

to obtain a copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto, together with executed copies of all powers of attorney pursuant to which this Agreement, the Certificate of Limited Partnership and all amendments thereto have been executed;

(4)

to obtain true and full information regarding the amount of cash and a description and statement of the Agreed Value of any other property or services contributed by each Partner and which each Partner has agreed to contribute in the future, and the date on which each Partner became a Partner; and

(5)

other information regarding the affairs of the Partnership as is just and reasonable.

B. Notice of Conversion Factor . The Partnership shall notify each Limited Partner upon request (i) of the then current Conversion Factor and (ii) of any changes to the Conversion Factor.

C. Notice of Extraordinary Transaction of the General Partner Entity . Prior to making any extraordinary distributions of cash or property to its shareholders or effecting an Extraordinary Transaction, the General Partner Entity shall provide written notice to the Limited Partners of its intention to effect such distribution or Extraordinary Transaction at least twenty (20) Business Days (or such shorter period determined by the General Partner Entity in its sole and absolute discretion) prior to the record date to determine shareholders eligible to receive distribution or to vote upon such Extraordinary Transaction (or, if no such record date is applicable, at least twenty (20) Business Days (or such shorter period determined by the General Partner Entity in its sole and absolute discretion) before consummation of such distribution). This provision for such notice shall not be deemed (i) to permit any transaction that otherwise is prohibited by this Agreement or requires a Consent of the Partners or (ii) to require a Consent on the part of any one or more of the Limited

Partners to a transaction that does not otherwise require Consent under this Agreement. Each Limited Partner agrees, as a condition to the receipt of the notice pursuant hereto, to keep confidential the information set forth therein until such time as the General Partner Entity has made public disclosure thereof, to use such information during such period of confidentiality solely for purposes of determining whether to exercise the Redemption Right (if applicable) and to execute a confidentiality agreement provided by the General Partner Entity; provided , however , that a Limited Partner may disclose such information to its attorney, accountant and/or financial advisor for purposes of obtaining advice with respect to such exercise so long as such attorney, accountant and/or financial advisor agrees to receive and hold such information subject to this confidentiality requirement.

D. Confidentiality . Notwithstanding any other provision of this Section 8.5 , the General Partner may keep confidential from the Limited Partners, for such period of time as the General Partner determines in its sole and absolute discretion, any information that (i) the General Partner reasonably believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership or could damage the Partnership or its business or (ii) the Partnership is required by law or by agreements with unaffiliated third parties to keep confidential, provided, however, that this Section 8.5.D shall not affect the notice requirements set forth in Section 8.5.C .

Section 8.6

Redemption Right

A. General . (i) Subject to Section 8.6.C and Section 11.6.E , and except as required by Section 8.6.B(iv) , at any time on or after one year following the later of (a) the beginning of the first full calendar month following the first date on which the common shares of the General Partner Entity are Publicly Traded or (b) the date of the initial issuance thereof (which, in the event of the transfer of a Class A Unit or Class B Unit, shall be deemed to be the date that the Class A Unit or such Class B Unit, as the case may be, was issued to the original recipient thereof for purposes of this Section 8.6 ), the holder of a Class A Unit or a Class B Unit (if other than the General Partner Entity or any Subsidiary of the General Partner Entity) shall have the right (the “ Redemption Right ”) to require the Partnership to redeem such Partnership Unit, with such redemption to occur on the Specified Redemption Date and at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. Any such Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner Entity) by the holder of the Partnership Units who is exercising the Redemption Right (the “ Redeeming Partner ”). A Limited Partner may exercise the Redemption Right from time to time, without limitation as to frequency, with respect to part or all of the Partnership Units that it owns, as selected by the Limited Partner, provided , however , that a Limited Partner may not exercise the Redemption Right for fewer than one thousand (1,000) Partnership Units of a particular class unless such Redeeming Partner then holds fewer than one thousand (1,000) Partnership Units in that class, in which event the Redeeming Partner must exercise the Redemption Right for all of the Partnership Units held by such Redeeming Partner in that class, and provided further that, with respect to a Limited Partner which is an entity, such Limited Partner may exercise the Redemption Right for fewer than one thousand (1,000) Partnership Units without regard to whether or not such Limited Partner is exercising the Redemption Right for all of the Partnership Units held by such Limited

Partner as long as such Limited Partner is exercising the Redemption Right on behalf of one or more of its equity owners in respect of one hundred percent (100%) of such equity owners’ interests in such Limited Partner. For purposes hereof, a Class A Unit issued upon conversion of a Class B Unit shall be deemed to have been issued when the Class B Unit was issued.

(ii) The Redeeming Partner shall have no right with respect to any Partnership Units so redeemed to receive any distributions paid in respect of a Partnership Record Date for distributions in respect of Partnership Units after the Specified Redemption Date with respect to such Partnership Units.

(iii) The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6 , and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Limited Partner’s Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.

(iv) Notwithstanding the foregoing, and subject to Section 8.6.B(iv) , if the General Partner Entity provides notice to the Limited Partners pursuant to Section 8.5.C hereof, the Redemption Right shall be exercisable, without regard to whether the Partnership Units have been outstanding for any specified period, during the period commencing on the date on which the General Partner Entity provides such notice and ending on the record date to determine shareholders eligible to receive such distribution or participate in such Extraordinary Transaction. If this subparagraph (iv) applies, the Specified Redemption Date is the date on which the Partnership and the General Partner receive notice of exercise of the Redemption Right, rather than ten (10) Business Days after receipt of the Notice of Redemption.

B. General Partner Entity Assumption of Redemption Right . (i) If a Limited Partner has delivered a Notice of Redemption, the General Partner Entity may, in its sole and absolute discretion (subject to the limitations on ownership and transfer of Shares set forth in the organizational documents of the General Partner, or, if the General Partner is not the General Partner Entity, the organizational documents of the General Partner Entity), elect to assume directly and satisfy a Redemption Right. If such election is made by the General Partner Entity, the Partnership shall determine whether the General Partner Entity shall pay the Redemption Amount in the form of the Cash Amount or the Shares Amount. The Partnership’s decision regarding whether such payment shall be made in the form of the Cash Amount or the Shares Amount shall be made by the General Partner, in its capacity as the general partner of the Partnership and in its sole and absolute discretion. Payment of the Redemption Amount in the form of Shares shall be in Shares duly authorized, validly issued, fully paid and nonassessable and if applicable, free and clear of any pledge, lien, encumbrance or restriction, other than those provided in the organizational documents of the General Partner Entity, the Securities Act, relevant state securities or blue sky laws and any applicable registration rights agreement with respect to such Shares entered into by the Redeeming Partner, and shall bear a legend in form and substance determined by the General Partner Entity. Upon such payment by the General Partner Entity, the General Partner Entity shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all

purposes of this Agreement as the owner of such Partnership Units. Unless the General Partner Entity, in its sole and absolute discretion, shall exercise its right to assume directly and satisfy the Redemption Right, the General Partner Entity shall not have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner’s exercise of the Redemption Right. If the General Partner Entity shall exercise its right to assume directly and satisfy the Redemption Right in the manner described in the first sentence of this Section 8.6B and shall fully perform its obligations in connection therewith, the Partnership shall have no right or obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner’s exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership and the General Partner Entity shall, for U.S. federal income tax purposes, treat the transaction between the General Partner Entity and the Redeeming Partner as a sale of the Redeeming Partner’s Partnership Units to the General Partner Entity.

(ii) If the General Partner Entity determines that the General Partner Entity shall pay the Redeeming Partner the Redemption Amount in the form of Shares, the total number of Shares to be paid to the Redeeming Partner in exchange for the Redeeming Partner’s Partnership Units shall be the applicable Shares Amount. If this amount is not a whole number of Shares, the Redeeming Partner shall be paid (i) that number of Shares which equals the nearest whole number less than such amount plus (ii) an amount of cash which the General Partner Entity determines, in its reasonable discretion, to represent the fair value of the remaining fractional Share which would otherwise be payable to the Redeeming Partner.

(iii) Each Redeeming Partner agrees to execute such documents or provide such information or materials as the General Partner Entity may reasonably require in connection with the issuance of Shares upon exercise of the Redemption Right.

(iv) Notwithstanding anything to the contrary set forth in this Section 8.6 , but subject to Section 8.6.C and Section 11.6.E , in the event of an Extraordinary Transaction, unless the Redemption Rights with respect to any Partnership Units have been earlier exercised in accordance with the other provisions of this Section 8.6 , the General Partner shall have the right, exercisable in its sole and absolute discretion by written notice to the Limited Partners, no later than the date on which the Extraordinary Transaction is consummated, to require (x) the Redemption Rights of all Limited Partners to be deemed to be automatically exercised, (y) the General Partner Entity to be deemed to have elected to assume the obligation to satisfy all such Redemption Rights by payment of applicable Share Amounts, all without regard to whether the Partnership Units have been outstanding for any specified period, and (z) the Specified Redemption Date in such case shall be deemed to be the date on which the Extraordinary Transaction is consummated, rather than ten (10) Business Days after receipt of the Notice of Redemption. Provided that the General Partner exercises the right provided in this paragraph, the requirement set forth in Section 11.2.B(ii) shall be deemed to have been met with respect to such Extraordinary Transaction.

C. Exceptions to Exercise of Redemption Right . Notwithstanding the provisions of Sections 8.6.A and 8.6.B , a Partner shall not be entitled to exercise the Redemption Right pursuant to Section 8.6.A if (but only as long as) the delivery of Shares to such Partner on the Specified Redemption Date would (i) be prohibited under the restrictions on the ownership or transfer of

Shares in the organizational documents of the General Partner (or, if the General Partner is not the General Partner Entity, the organizational documents of the General Partner Entity), (iii) be prohibited under applicable federal or state securities laws or regulations (in each case regardless of whether the General Partner Entity would in fact assume and satisfy the Redemption Right), (iii) without limiting the foregoing, result in the General Partner’s Shares being owned by fewer than 100 persons (determined without reference to rules of attribution), (iv) without limiting the foregoing, result in the Partnership being “closely held” within the meaning of Section 856(h) of the Code or cause the General Partner to own, actually or constructively, ten percent (10%) or more of the ownership interests in a tenant of the General Partner, the Partnership or a subsidiary of the Partnership’s real property within the meaning of Section 856(d)(2)(B) of the Code, and (v) without limiting the foregoing, cause the acquisition of the Shares by the Redeeming Partner to be “integrated” with any other distribution of Shares for purposes of complying with the registration provision of the Securities Act, as amended. Notwithstanding the foregoing, the General Partner may, in its sole and absolute discretion, waive such prohibition set forth in this Section 8.6.C .

D. No Liens on Partnership Units Delivered for Redemption . Each Limited Partner covenants and agrees that all Partnership Units delivered for redemption shall be delivered to the Partnership or the General Partner Entity, as the case may be, free and clear of all liens; and, notwithstanding anything contained herein to the contrary, neither the General Partner Entity nor the Partnership shall be under any obligation to acquire Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, if any Federal, state or local tax is payable as a result of the transfer of its Partnership Units to the Partnership or the General Partner Entity, such Limited Partner shall assume and pay such transfer tax.

E. Additional Partnership Interests; Modification of Holding Period . If the Partnership issues Partnership Interests to any Additional Limited Partner pursuant to Article IV , the General Partner may make such revisions to this Section 8.6 as it determines are necessary to reflect the issuance of such Partnership Interests (including setting forth any restrictions on the exercise of the Redemption Right with respect to such Partnership Interests which differ from those set forth in this Agreement); provided , however , that no such revisions shall materially adversely affect the rights of any other Limited Partner to exercise its Redemption Right without that Limited Partner’s prior written consent. In addition, the General Partner may, with respect to any holder or holders of Partnership Units, at any time and from time to time, as it shall determine in its sole and absolute discretion, (i) reduce or waive the length of the period prior to which such holder or holders may not exercise the Redemption Right or (ii) reduce or waive the length of the period between the exercise of the Redemption Right and the Specified Redemption Date.

ARTICLE IX

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 9.1

Records and Accounting

The General Partner shall keep or cause to be kept at the principal office of the Partnership appropriate books and records with respect to the Partnership’s business, including, without limitation, all books and records necessary to provide to the Limited Partners any information, lists

and copies of documents required to be provided pursuant to Section 9.3 . Any records maintained by or on behalf of the Partnership in the regular course of its business may be kept on, or be in the form of, punch cards, magnetic tape, photographs, micrographics or any other information storage device, provided , however , that the records so maintained are convertible into clearly legible written form within a reasonable period of time. The books of the Partnership shall be maintained, for financial and tax reporting purposes, on an accrual basis in accordance with generally accepted accounting principles.

Section 9.2

Fiscal Year

The fiscal year of the Partnership shall be the calendar year.

Section 9.3

Reports

A. Annual Reports . As soon as practicable, but in no event later than the date on which the General Partner Entity mails its annual report to its shareholders, the General Partner Entity shall cause to be mailed to each Limited Partner an annual report, as of the close of the most recently ended Fiscal Year, containing financial statements of the Partnership, or of the General Partner Entity (and, if different, the General Partner) if such statements are prepared on a consolidated basis with the Partnership, for such Fiscal Year, presented in accordance with generally accepted accounting principles, such statements to be audited by a nationally recognized “Big Four” firm of independent public accountants selected by the General Partner Entity.

B. Quarterly Reports . If and to the extent that the General Partner Entity mails quarterly reports to its shareholders, as soon as practicable, but in no event later than the date on such reports are mailed, the General Partner Entity shall cause to be mailed to each Limited Partner a report containing unaudited financial statements, as of the last day of such fiscal quarter, of the Partnership, or of the General Partner Entity (and, if different, the General Partner) if such statements are prepared on a consolidated basis with the Partnership, and such other information as may be required by applicable law or regulation, or as the General Partner determines to be appropriate.

ARTICLE X

TAX MATTERS

Section 10.1

Preparation of Tax Returns

The General Partner shall arrange for the preparation and timely filing of all returns of Partnership income, gains, deductions, losses and other items required of the Partnership for federal and state income tax purposes and shall use all reasonable efforts to furnish, within ninety (90) days of the close of each taxable year, the tax information reasonably required by Limited Partners for federal and state income tax reporting purposes.

Section 10.2

Tax Elections

A. Except as otherwise provided herein, the General Partner shall, in its sole and absolute discretion, determine whether to make any available election pursuant to the Code

(including the election under Section 754 of the Code). The General Partner shall have the right to seek to revoke any such election upon the General Partner’s determination in its sole and absolute discretion that such revocation is in the best interests of the Partners.

B. Without limiting the foregoing, the Partners, intending to be legally bound, hereby authorize the General Partner, on behalf of the Partnership, to make an election (the “ LV Safe Harbor Election ”) to have the “liquidation value” safe harbor provided in Proposed Treasury Regulation § 1.83-3(1) and the Proposed Revenue Procedure set forth in Internal Revenue Service Notice 2005-43, as such safe harbor may be modified when such proposed guidance is issued in final form or as amended by subsequently issued guidance (the “LV Safe Harbor”), apply to LTIP Units and any interest in the Partnership transferred to, or for the benefit of, a service provider while the Safe Harbor Election remains effective, to the extent such interest meets the LV Safe Harbor requirements (collectively, such interests are referred to as “ LV Safe Harbor Interests ”). The Tax Matters Partner is authorized and directed to execute and file the LV Safe Harbor Election on behalf of the Partnership and the Partners. The Partnership and the Partners (including any person to whom an LTIP Unit or other interest in the Partnership is transferred in connection with the performance of services) hereby agree to comply with all requirements of the LV Safe Harbor (including forfeiture allocations) with respect to all LV Safe Harbor Interests and to prepare and file all U.S. federal income tax returns reporting the tax consequences of the issuance and vesting of LV Safe Harbor Interests consistent with such final LV Safe Harbor guidance. The Partnership is also authorized to take such actions as are necessary to achieve, under the LV Safe Harbor, the effect that the election and compliance with all requirements of the LV Safe Harbor referred to above would be intended to achieve under Proposed Treasury Regulation § 1.83-3, including amending this Agreement.

Section 10.3

Tax Matters Partner

A. General . The General Partner shall be the “tax matters partner” of the Partnership for federal income tax purposes. Pursuant to Section 6223(c)(3) of the Code, upon receipt of notice from the IRS of the beginning of an administrative proceeding with respect to the Partnership, the tax matters partner shall furnish the IRS with the name, address, taxpayer identification number and profit interest of each of the Limited Partners and any Assignees; provided, however, that such information is provided to the Partnership by the Limited Partners.

B. Powers . The tax matters partner is authorized, but not required:

(1)

to enter into any settlement with the IRS with respect to any administrative or judicial proceedings for the adjustment of Partnership items required to be taken into account by a Partner for income tax purposes (such administrative proceedings being referred to as a “tax audit” and such judicial proceedings being referred to as “judicial review”), and in the settlement agreement the tax matters partner may expressly state that such agreement shall bind all Partners, except that such settlement agreement shall not bind any Partner (i) who (within the time prescribed pursuant to the Code and Regulations) files a statement with the IRS providing that the tax matters partner shall not have the authority to enter into a settlement agreement on behalf of such Partner or (ii) who is a “notice partner” (as defined in Section 6231(a)(8) of the Code) or a member of a “notice group” (as defined in Section 6223(b)(2) of the Code);

(2)

if a notice of a final administrative adjustment at the Partnership level of any item required to be taken into account by a Partner for tax purposes (a “final adjustment”) is mailed to the tax matters partner, to seek judicial review of such final adjustment, including the filing of a petition for readjustment with the Tax Court or the filing of a complaint for refund with the United States Claims Court or the District Court of the United States for the district in which the Partnership’s principal place of business is located;

(3)

to intervene in any action brought by any other Partner for judicial review of a final adjustment;

(4)

to file a request for an administrative adjustment with the IRS at any time and, if any part of such request is not allowed by the IRS, to file an appropriate pleading (petition or complaint) for judicial review with respect to such request;

(5)

to enter into an agreement with the IRS to extend the period for assessing any tax which is attributable to any item required to be taken into account by a Partner for tax purposes, or an item affected by such item;

(6)

to take any other action on behalf of the Partners of the Partnership in connection with any tax audit or judicial review proceeding, to the extent permitted by applicable law or regulations; and

(7)

to take any other action required by the Code and Regulations in connection with its role as tax matters partner.

The taking of any action and the incurring of any expense by the tax matters partner in connection with any such audit or proceeding referred to in clause (6) above, except to the extent required by law, is a matter in the sole and absolute discretion of the tax matters partner and the provisions relating to indemnification of the General Partner set forth in Section 7.7 shall be fully applicable to the tax matters partner in its capacity as such.

C. Reimbursement . The tax matters partner shall receive no compensation for its services. All third party costs and expenses incurred by the tax matters partner in performing its duties as such (including legal and accounting fees and expenses) shall be borne by the Partnership. Nothing herein shall be construed to restrict the Partnership from engaging an accounting firm and/or law firm to assist the tax matters partner in discharging its duties hereunder, so long as the compensation paid by the Partnership for such services is reasonable.

Section 10.4

Organizational Expenses

The Partnership shall elect to deduct expenses as provided in Section 709 of the Code.

Section 10.5

Withholding

Each Limited Partner hereby authorizes the Partnership to withhold from or pay on behalf of or with respect to such Limited Partner any amount of U.S. federal, state, local, or foreign taxes that the General Partner determines that the Partnership is required to withhold or pay with respect to any cash or property distributable, allocable or otherwise transferred to such Limited Partner pursuant to this Agreement, including, without limitation, any taxes required to be withheld or paid by the Partnership pursuant to Section 1441, 1442, 1445, or 1446 of the Code. Any amount withheld with respect to a Limited Partner pursuant to this Section 10.5 shall be treated as paid or distributed, as applicable, to such Limited Partner for all purposes under this Agreement. Any amount paid on behalf of or with respect to a Limited Partner, in excess of any such withheld amount, shall constitute a loan by the Partnership to such Limited Partner, which loan shall be repaid by such Limited Partner within fifteen (15) days after notice from the General Partner that such payment must be made unless (i) the Partnership withholds such payment from a distribution which would otherwise be made to the Limited Partner or (ii) the General Partner determines, in its sole and absolute discretion, that such payment may be satisfied out of the available funds of the Partnership which would, but for such payment, be distributed to the Limited Partner. Any amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as having been distributed or otherwise paid to such Limited Partner. Each Limited Partner hereby unconditionally and irrevocably grants to the Partnership a security interest in such Limited Partner’s Partnership Interest to secure such Limited Partner’s obligation to pay to the Partnership any amounts required to be paid pursuant to this Section 10.5 . Any amounts payable by a Limited Partner hereunder shall bear interest at 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, plus four (4) percentage points (but not higher than the maximum rate that may be charged under applicable law) from the date such amount is due (i.e., fifteen (15) days after demand) until such amount is paid in full. Each Limited Partner shall take such actions as the Partnership or the General Partner shall request to perfect or enforce the security interest created hereunder.

ARTICLE XI

TRANSFERS AND WITHDRAWALS

Section 11.1

Transfer

A. Definition . The term “transfer,” when used in this Article XI with respect to a Partnership Interest or a Partnership Unit, shall be deemed to refer to a transaction by which the General Partner purports to assign all or any part of its General Partner Interest to another Person or by which a Limited Partner purports to assign all or any part of its Limited Partner Interest to another Person, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise. The term “transfer” when used in this Article XI does not include any redemption or repurchase of Partnership Units by the Partnership from a Partner or acquisition of Partnership Units from a Limited Partner by the General Partner Entity pursuant to Section 8.6 or otherwise. No part of the interest of a Limited Partner shall be subject to the claims of any creditor, any spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily alienated or encumbered except as may be specifically provided for in this Agreement.

B. General . No Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article XI . Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article XI shall be null and void.

Section 11.2

Transfers of Partnership Interests of General Partner

A. General . The General Partner may not transfer any of its Partnership Interests except in connection with (i) a transaction permitted under Section 11.2.B , (ii) any merger (including a triangular merger), consolidation or other combination with or into another Person following the consummation of which the equity holders of the surviving entity are substantially identical to the shareholders of the General Partner prior to such transaction, or (iii) as otherwise expressly permitted under this Agreement, nor shall the General Partner withdraw as the General Partner except in connection with a transaction permitted under Section 11.2.B or any merger, consolidation, or other combination permitted under clause (ii) of this Section 11.2.A or as otherwise expressly permitted under this Agreement.

B. Termination Transaction . The General Partner Entity shall not engage in any merger (including, without limitation, a triangular merger), consolidation or other combination with or into another Person (other than any transaction permitted by Section 11.2.A ), sale of all or substantially all of its assets or any reclassification, recapitalization or other similar change in the outstanding Shares (other than a change in par value, or from par value to no par value, or as a result of a subdivision or combination as described in the definition of “Conversion Factor”) (“ Termination Transaction ”), unless: (i) the Termination Transaction has been approved by the Consent of Partners holding Partnership Interests representing more than fifty percent (50%) of the Percentage Interest of the Class A Units (including Class A Units held by the General Partner), and (ii) all Partners either will receive, or will have the right to receive, in connection with the Termination Transaction, for each Partnership Unit, an amount of cash, securities, or other property equal to the product of the Conversion Factor and the greatest amount of cash, securities or other property paid to a holder of Shares, if any, corresponding to such Unit in consideration of one such Share at any time during the period from and after the date on which the Termination Transaction is consummated; provided , however , that, if in connection with the Termination Transaction, a purchase, tender or exchange offer shall have been made to and accepted by the holders of the percentage required for the approval of mergers under the organizational documents of the General Partner Entity, each holder of Partnership Units shall receive, or shall have the right to receive, the greatest amount of cash, securities, or other property which such holder would have received had it exercised the Redemption Right and received Shares in exchange for its Partnership Units immediately prior to the expiration of such purchase, tender or exchange offer and had thereupon accepted such purchase, tender or exchange offer.

C. Creation of New General Partner . The General Partner shall not enter into an agreement or other arrangement providing for or facilitating the creation of a general partner of the Partnership other than the General Partner Entity, unless the successor general partner executes and

delivers a counterpart to this Agreement pursuant to which such successor general partner agrees to be fully bound by all of the terms and conditions contained herein that are applicable to the General Partner or General Partner Entity.

Section 11.3

Limited Partners’ Rights to Transfer

A. General . Except to the extent expressly permitted in Sections 11.3.B and 11.3.C or in connection with the exercise of a Redemption Right pursuant to Section 8.6, a Limited Partner may not transfer any portion of its Partnership Interest, or any of such Limited Partner’s rights as a Limited Partner, without the prior written consent of the General Partner, which consent may be withheld in the General Partner’s sole and absolute discretion. Any transfer otherwise permitted under Sections 11.3.B and 11.3.C shall be subject to the conditions set forth in Section 11.3.D and 11.3.E , and all permitted transfers shall be subject to Section 11.5 and Section 11.6 . Notwithstanding anything to the contrary set forth in this Section 11.3 , no Limited Partner may transfer any LTIP Units without the consent of the General Partner.

B. Incapacitated Limited Partner . If a Limited Partner is subject to Incapacity, the executor, administrator, trustee, committee, guardian, conservator or receiver of such Limited Partner’s estate shall have all the rights of a Limited Partner, but not more rights than those enjoyed by other Limited Partner, for the purpose of settling or managing the estate and such power as the Incapacitated Limited Partner possessed to transfer all or any part of its interest in the Partnership. The Incapacity of a Limited Partner, in and of itself, shall not dissolve or terminate the Partnership.

C. Permitted Transfers . A Limited Partner may transfer, with or without the consent of the General Partner, all or a portion of its Partnership Interest (other than LTIP Units) (i) in the case of a Limited Partner who is an individual, to a member of his Immediate Family, any trust formed for the benefit of himself and/or members of his Immediate Family, or any partnership, limited liability company, joint venture, corporation or other business entity comprised only of himself and/or members of his Immediate Family and entities the ownership interests in which are owned by or for the benefit of himself and/or members of his Immediate Family, (ii) in the case of a Limited Partner which is a trust, to the beneficiaries of such trust, (iii) in the case of a Limited Partner which is a partnership, limited liability company, joint venture, corporation or other business entity to which Units were transferred pursuant to clause (i) above, to its partners, owners or shareholders, as the case may be, who are members of the Immediate Family of or are actually the Person(s) who transferred Partnership Units to it pursuant to clause (i) above, (iv) in the case of a Limited Partner which acquired Partnership Units as of the date hereof and which is a partnership, limited liability company, joint venture, corporation or other business entity, to its partners, owners, shareholders or Affiliates thereof, as the case may be, or the Persons owning the beneficial interests in any of its partners, owners or shareholders or Affiliates thereof (it being understood that this clause (iv) will apply to all of each Person’s Interests whether the Partnership Units relating thereto were acquired on the date hereof or hereafter), (v) in the case of a Limited Partner which is a partnership, limited liability company, joint venture, corporation or other business entity other than any of the foregoing described in clause (iii) or (iv), in accordance with the terms of any agreement between such Limited Partner and the Partnership pursuant to which such Partnership Interest was issued, (vi) pursuant to a gift or other transfer without consideration, (vii) pursuant to applicable laws of descent or

distribution, (viii) to another Limited Partner, and (ix) pursuant to a grant of security interest or other encumbrance thereof effectuated in a bona fide pledge transaction with a bona fide financial institution as a result of the exercise of remedies related thereto, subject to the provisions of Section 11.3.E hereof. A trust or other entity will be considered formed “for the benefit” of a Partner’s Immediate Family even though some other Person has a remainder interest under or with respect to such trust or other entity.

D. No Transfers Violating Securities Laws . The General Partner may prohibit any transfer of Partnership Units by a Limited Partner unless it receives a written opinion of legal counsel (which opinion and counsel shall be reasonably satisfactory to the Partnership) to such Limited Partner to the effect that such transfer would not require filing of a registration statement under the Securities Act or would not otherwise violate any federal or state securities laws or regulations applicable to the Partnership or the Partnership Unit or, at the option of the Partnership, an opinion of legal counsel to the Partnership to the same effect.

E. No Transfers to Holders of Nonrecourse Liabilities . No pledge or transfer of any Partnership Units may be made to a lender to the Partnership or any Person who is related (within the meaning of Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose loan otherwise constitutes a Nonrecourse Liability unless (i) the General Partner is provided prior written notice thereof and (ii) the lender enters into an arrangement with the Partnership and the General Partner to exchange or redeem for the Redemption Amount any Partnership Units in which a security interest is held simultaneously with the time at which such lender would be deemed to be a partner in the Partnership for purposes of allocating liabilities to such lender under Section 752 of the Code.

Section 11.4

Substituted Limited Partners

A. Consent of General Partner . No Limited Partners shall have the right to substitute a transferee as a Limited Partner in its place. The General Partner shall, however, have the right to consent to the admission of a transferee of the interest of a Limited Partner pursuant to this Section 11.4 as a Substituted Limited Partner, which consent may be given or withheld by the General Partner in its sole and absolute discretion. The General Partner’s failure or refusal to permit a transferee of any such interests to become a Substituted Limited Partner shall not give rise to any cause of action against the Partnership, the General Partner or any Partner. The General Partner hereby grants its consent to the admission as a Substituted Limited Partner to any bona fide financial institution that loans money or otherwise extends credit to a holder of Partnership Units (other than LTIP Units) and thereafter becomes the owner of such Partnership Units pursuant to the exercise by such financial institution of its rights under a pledge of such Partnership Units granted in connection with such loan or extension of credit.

B. Rights of Substituted Partner . A transferee who has been admitted as a Substituted Limited Partner in accordance with this Article XI shall have all the rights and powers and be subject to all the restrictions and liabilities of a Limited Partner under this Agreement. The admission of any transferee as a Substituted Limited Partner shall be conditioned upon the transferee executing and delivering to the Partnership an acceptance of all the terms and conditions of this Agreement (including, without limitation, the provisions of Section 15.11 ) and such other documents or instruments as may be required to effect the admission.

C. Partner Registry . Upon the admission of a Substituted Limited Partner, the General Partner shall update the Partner Registry in the books and records of the Partnership as it deems necessary to reflect such admission in the Partner Registry.

Section 11.5

Assignees

If the General Partner, in its sole and absolute discretion, does not consent to the admission of any permitted transferee under Section 11.3 as a Substituted Limited Partner, as described in Section 11.4 , such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be entitled to all the rights of an assignee of a limited partnership interest under the Act, including the right to receive distributions from the Partnership and the share of Net Income, Net Losses, gain, loss and Recapture Income attributable to the Partnership Units assigned to such transferee, and shall have the rights granted to the Limited Partners under Section 8.6 , but shall not be deemed to be a holder of Partnership Units for any other purpose under this Agreement, and shall not be entitled to vote such Partnership Units in any matter presented to the Limited Partners for a vote (such Partnership Units being deemed to have been voted on such matter in the same proportion as all other Partnership Units held by Limited Partners are voted). If any such transferee desires to make a further assignment of any such Partnership Units, such transferee shall be subject to all the provisions of this Article XI to the same extent and in the same manner as any Limited Partner desiring to make an assignment of Partnership Units.

Section 11.6

General Provisions

A. Withdrawal of Limited Partner . No Limited Partner may withdraw from the Partnership other than as a result of a permitted transfer of all of such Limited Partner’s Partnership Units in accordance with this Article XI , or pursuant to redemption of all of its Partnership Units under Section 8.6 .

B. Termination of Status as Limited Partner . Any Limited Partner who shall transfer all of its Partnership Units in a transfer permitted pursuant to this Article XI or pursuant to redemption of all of its Partnership Units under Section 8.6 shall cease to be a Limited Partner.

C. Timing of Transfers . Transfers pursuant to this Article XI may only be made upon ten (10) Business Days prior notice to the General Partner, unless the General Partner otherwise agrees.

D. Allocations . If any Partnership Interest is transferred during any quarterly segment of the Partnership’s fiscal year in compliance with the provisions of this Article XI or redeemed or transferred pursuant to Section 8.6 , Net Income, Net Losses, each item thereof and all other items attributable to such interest for such fiscal year shall be divided and allocated between the transferor Partner and the transferee Partner by taking into account their varying interests during the fiscal year in accordance with Section 706(d) of the Code and corresponding Regulations, using the interim closing of the books method (unless the General Partner, in its sole and absolute discretion, elects to adopt a daily, weekly, or a monthly proration period, in which event Net Income, Net Losses, each

item thereof and all other items attributable to such interest for such fiscal year shall be prorated based upon the applicable method selected by the General Partner). Solely for purposes of making such allocations, each of such items for the calendar month in which the transfer or redemption occurs shall be allocated to the Person who is a Partner as of midnight on the last day of said month. All distributions of Available Cash attributable to any Partnership Unit with respect to which the Partnership Record Date is before the date of such transfer, assignment or redemption shall be made to the transferor Partner or the Redeeming Partner, as the case may be, and, in the case of a transfer or assignment other than a redemption, all distributions of Available Cash thereafter attributable to such Partnership Unit shall be made to the transferee Partner.

E. Additional Restrictions . Notwithstanding anything to the contrary herein, and in addition to any other restrictions on transfer contained herein or in the Equity Incentive Plan, including, without limitation, the provisions of Article VII and this Article XI , in no event may any transfer or assignment of a Partnership Interest by any Partner (including pursuant to Section 8.6 ) be made without the express consent of the General Partner, in its sole and absolute discretion, (i) to any person or entity who lacks the legal right, power or capacity to own a Partnership Interest; (ii) in violation of applicable law; (iii) of any component portion of a Partnership Interest, such as the Capital Account, or rights to distributions, separate and apart from all other components of a Partnership Interest; (iv) if in the opinion of legal counsel to the Partnership there is a significant risk that such transfer would cause a termination of the Partnership for U.S. federal or state income tax purposes (except as a result of the redemption or exchange for Shares of all Partnership Units held by all Limited Partners other than the General Partner, or any Subsidiary of either, or pursuant to a transaction expressly permitted under Section 11.2 ); (v) if in the opinion of counsel to the Partnership, there is a significant risk that such transfer would cause the Partnership to cease to be classified as a partnership for U.S. federal income tax purposes (except as a result of the redemption or exchange for Shares of all Units held by all Limited Partners other than the General Partner, or any Subsidiary of either, or pursuant to a transaction expressly permitted under Section 11.2 ); (vi) if such transfer requires the registration of such Partnership Interest pursuant to any applicable federal or state securities laws; (vii) if such transfer is effectuated through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code or such transfer causes the Partnership to become a “publicly traded partnership,” as such term is defined in Section 469(k)(2) or Section 7704(b) of the Code (provided, however, that, this clause (vii) shall not be the basis for limiting or restricting in any manner the exercise of the Redemption Right under Section 8.6 unless, and only to the extent that, outside tax counsel provides to the General Partner an opinion to the effect that, in the absence of such limitation or restriction, there is a significant risk that the Partnership will be treated as a “publicly traded partnership” and, by reason thereof, taxable as a corporation); (viii) if such transfer subjects the Partnership or the activities of the Partnership to regulation under the Investment Company Act of 1940, the Investment Advisors Act of 1940 or ERISA, each as amended; (ix) if the General Partner Entity attempts to qualify as a REIT and, in the opinion of legal counsel for the Partnership, there is a risk that such transfer would adversely affect the ability of the General Partner Entity to continue to qualify as a REIT or subject the General Partner Entity to any additional taxes under Section 857 and Section 4981 of the Code.

F. Avoidance of “Publicly Traded Partnership” Status . The General Partner shall monitor the transfers of interests in the Partnership to determine (i) if such interests are being traded on an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code and (ii) whether additional transfers of interests would result in the Partnership being unable to qualify for at least one of the “safe harbors” set forth in Regulations Section 1.7704-1 (or such other guidance subsequently published by the IRS setting forth safe harbors under which interests will not be treated as “readily tradable on a secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code) (the “ Safe Harbors ”). The General Partner shall take all steps reasonably necessary or appropriate to prevent any trading of interests or any recognition by the Partnership of transfers made on such markets and, except as otherwise provided herein, to insure that at least one of the Safe Harbors is met; provided , however , that the foregoing shall not authorize the General Partner to limit or restrict in any manner the right of any holder of a Partnership Unit to exercise the Redemption Right in accordance with the terms of Section 8.6 unless, and only to the extent that, outside tax counsel provides to the General Partner an opinion to the effect that, in the absence of such limitation or restriction, there is a significant risk that the Partnership will be treated as a “publicly traded partnership” and, by reason thereof, taxable as a corporation.

ARTICLE XII

ADMISSION OF PARTNERS

Section 12.1

Admission of a Successor General Partner

A successor to all of the General Partner’s General Partner Interest pursuant to Section 11.2 who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective upon such transfer. Any such successor shall carry on the business of the Partnership without dissolution. In such case, the admission shall be subject to such successor General Partner executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement and such other documents or instruments as may be required to effect the admission.

Section 12.2

Admission of Additional Limited Partners

A. General . No Person shall be admitted as an Additional Limited Partner without the consent of the General Partner, which consent shall be given or withheld in the General Partner’s sole and absolute discretion. A Person who makes a Capital Contribution to the Partnership in accordance with this Agreement or who exercises an option to receive Partnership Units shall be admitted to the Partnership as an Additional Limited Partner only with the consent of the General Partner and only upon furnishing to the General Partner (i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement, including, without limitation, the power of attorney granted in Section 15.11 and (ii) such other documents or instruments as may be required in the discretion of the General Partner to effect such Person’s admission as an Additional Limited Partner. The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership, following the consent of the General Partner to such admission.

B. Allocations to Additional Limited Partners . If any Additional Limited Partner is admitted to the Partnership on any day other than the first day of a Fiscal Year, then Net Income, Net Losses, each item thereof and all other items allocable among Partners and Assignees for such Fiscal Year shall be allocated among such Additional Limited Partner and all other Partners and Assignees by taking into account their varying interests during the Fiscal Year in accordance with Section 706(d) of the Code, using the interim closing of the books method (unless the General Partner, in its sole and absolute discretion, elects to adopt a daily, weekly or monthly proration method, in which event Net Income, Net Losses, and each item thereof would be prorated based upon the applicable period selected by the General Partner). Solely for purposes of making such allocations, each of such items for the calendar month in which an admission of any Additional Limited Partner occurs shall be allocated among all the Partners and Assignees including such Additional Limited Partner. All distributions of Available Cash with respect to which the Partnership Record Date is before the date of such admission shall be made solely to Partners and Assignees other than the Additional Limited Partner, and all distributions of Available Cash thereafter shall be made to all the Partners and Assignees including such Additional Limited Partner.

Section 12.3

Amendment of Agreement and Certificate of Limited Partnership

For the admission to the Partnership of any Partner, the General Partner shall take all steps necessary and appropriate under the Act to amend the records of the Partnership and, if necessary, to prepare as soon as practical an amendment of this Agreement (including an amendment to the Partner Registry) and, if required by law, shall prepare and file an amendment to the Certificate of Limited Partnership and may for this purpose exercise the power of attorney granted pursuant to Section 15.11 hereof.

ARTICLE XIII

DISSOLUTION AND LIQUIDATION

Section 13.1

Dissolution

The Partnership shall not be dissolved by the admission of Substituted Limited Partners or Additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Upon the withdrawal of the General Partner, any successor General Partner shall continue the business of the Partnership. The Partnership shall dissolve, and its affairs shall be wound up, upon the first to occur of any of the following (“ Liquidating Events ”):

(i) an event of withdrawal of the General Partner (other than an event of bankruptcy), unless within ninety (90) days after the withdrawal, the Consent of the Outside Limited Partners to continue the business of the Partnership and to the appointment, effective as of the date of withdrawal, of a substitute General Partner is obtained;

(ii) an election to dissolve the Partnership made by the General Partner in its sole and absolute discretion;

(iii) entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Act;

(iv) the sale of all or substantially all of the assets and properties of the Partnership for cash or for marketable securities; or

(v) a final and non-appealable judgment is entered by a court of competent jurisdiction ruling that the General Partner is bankrupt or insolvent, or a final and non-appealable order for relief is entered by a court with appropriate jurisdiction against the General Partner, in each case under any federal or state bankruptcy or insolvency laws as now or hereafter in effect, unless prior to or at the time of the entry of such order or judgment, the Consent of the Partners holding more than 50% of the Percentage Interests represented by the Class A Units is obtained to continue the business of the Partnership and to the appointment, effective as of a date prior to the date of such order or judgment, of a substitute General Partner.

Section 13.2

Winding Up

A. General . Upon the occurrence of a Liquidating Event, the Partnership shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Partners. No Partner shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Partnership’s business and affairs. The General Partner (or, if there is no remaining General Partner, any Person elected by a majority in interest of the Limited Partners (the “ Liquidator ”)) shall be responsible for overseeing the winding up and dissolution of the Partnership and shall take full account of the Partnership’s liabilities and property and the Partnership property shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom (which may, to the extent determined by the General Partner, include equity or other securities of the General Partner or any other entity) shall be applied and distributed in the following order:

(1)

First, to the payment and discharge of all of the Partnership’s debts and liabilities to creditors other than the Partners;

(2)

Second, to the payment and discharge of all of the Partnership’s debts and liabilities to the General Partner;

(3)

Third, to the payment and discharge of all of the Partnership’s debts and liabilities to the Limited Partners;

(4)

Fourth, to the holders of Partnership Interests that are entitled to any preference in distribution upon liquidation in accordance with the rights of any such class or series of Partnership Interests (and, within each such class or series, to each holder thereof pro rata based on its Percentage Interest in such class); and

(5)

Fifth, the balance, if any, to the Partners, including without limitation the holders of the Vested Class RS LTIP Units and the Vested Class O LTIP Units, in proportion to their respective positive Capital Account balances, determined after giving effect to all contributions, distributions, and allocations for all periods.

The General Partner shall not receive any additional compensation for any services performed pursuant to this Article XIII .

B. Deferred Liquidation . Notwithstanding the provisions of Section 13.2.A which require liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or upon dissolution of the Partnership the Liquidator determines that an immediate sale of part or all of the Partnership’s assets would be impractical or would cause undue loss to the Partners, the Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Partnership (including to those Partners as creditors) or distribute to the Partners, in lieu of cash, in accordance with the provisions of Section 13.2.A , undivided interests in such Partnership assets as the Liquidator deems not suitable for liquidation. Any such distributions in kind shall be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in the best interest of the Partners, and shall be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operation of such properties at such time. The Liquidator shall determine the fair market value of any property distributed in kind using such reasonable method of valuation as it may adopt.

Section 13.3

Compliance with Timing Requirements of Regulations; Restoration of Deficit Capital Accounts

A. Timing of Distributions . If the Partnership is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made under this Article XIII to the General Partner and Limited Partners who have positive Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2). In the discretion of the General Partner a pro rata portion of the distributions that would otherwise be made to the General Partner and Limited Partners pursuant to this Article XIII may be: (A) distributed to a trust established for the benefit of the General Partner and Limited Partners for the purposes of liquidating Partnership assets, collecting amounts owed to the Partnership and paying any contingent or unforeseen liabilities or obligations of the Partnership or of the General Partner arising out of or in connection with the Partnership (in which case the assets of any such trust shall be distributed to the General Partner and Limited Partners from time to time, in the reasonable discretion of the General Partner, in the same proportions as the amount distributed to such trust by the Partnership would otherwise have been distributed to the General Partner and Limited Partners pursuant to this Agreement); or (B) withheld to provide a reasonable reserve for Partnership liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Partnership; provided, however, that such withheld amounts shall be distributed to the General Partner and Limited Partners as soon as practicable.

B. Restoration of Deficit Capital Accounts Upon Liquidation of the Partnership . If any Partner has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all taxable years, including the year during which such liquidation

occurs), such Partner shall have no obligation to make any contribution to the capital of the Partnership with respect to such deficit, and such deficit shall not be considered a debt owed to the Partnership or to any other Person for any purpose whatsoever, except as otherwise set forth in this Section 13.3.B , or as otherwise expressly agreed in writing by the affected Partner and the Partnership after the date hereof. Notwithstanding the foregoing, (i) if the General Partner has a deficit balance in its Capital Account (after giving effect to all contributions, distributions, and allocations for all Partnership years or portions thereof, including the year during which such liquidation occurs), the General Partner shall contribute to the capital of the Partnership the amount necessary to restore such deficit balance to zero in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(3); (ii) if a DRO Partner has a deficit balance in its Capital Account (after giving effect to all contributions, distributions, and allocations for all Partnership Years or portions thereof, including the year during which such liquidation occurs), such DRO Partner shall be obligated to make a contribution to the Partnership with respect to any such deficit balance in such DRO Partner’s Capital Account upon a liquidation of the Partnership in an amount equal to the lesser of such deficit balance or such DRO Partner’s DRO Amount; and (iii) the first sentence of this Section 13.3.B shall not apply with respect to any other Partner to the extent, but only to such extent, that such Partner previously has agreed in writing, with the consent of the General Partner, to undertake an express obligation to restore all or any portion of a deficit that may exist in its Capital Account upon a liquidation of the Partnership. No Limited Partner shall have any right to become a DRO Partner, to increase its DRO Amount, or otherwise agree to restore any portion of any deficit that may exist in its Capital Account without the express written consent of the General Partner, in its sole and absolute discretion. Any contribution required of a Partner under this Section 13.3.B . shall be made on or before the later of (i) the end of the Partnership Year in which the interest is liquidated or (ii) the ninetieth (90th) day following the date of such liquidation. The proceeds of any contribution to the Partnership made by a DRO Partner with respect to a deficit in such DRO Partner’s Capital Account balance shall be treated as a Capital Contribution by such DRO Partner and the proceeds thereof shall be treated as assets of the Partnership to be applied as set forth in Section 13.2.A .

C. Restoration of Deficit Capital Accounts Upon a Liquidation of a Partner’s Interest by Transfer . If a DRO Partner’s interest in the Partnership is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) (other than in connection with a liquidation of the Partnership) which term shall include a redemption by the Partnership of such DRO Partner’s interest upon exercise of the Redemption Right, and such DRO Partner is designated on Exhibit E as Part II DRO Partner, such DRO Partner shall be required to contribute cash to the Partnership equal to the lesser of (i) the amount required to increase its Capital Account balance as of such date to zero, or (ii) such DRO Partner’s DRO Amount. For this purpose, (i) the DRO Partner’s deficit Capital Account balance shall be determined by taking into account all contributions, distributions, and allocations for the portion of the Fiscal Year ending on the date of the liquidation or redemption, and (ii) solely for purposes of determining such DRO Partner’s Capital Account balance, the General Partner shall re-determine the Carrying Value of the Partnership’s assets on such date based upon the principles set forth in Sections 1.D.(3) and (4) of Exhibit B hereto, and shall take into account the DRO Partner’s allocable share of any Unrealized Gain or Unrealized Loss resulting from such redetermination in determining the balance of its Capital Account. The amount of any payment required hereunder shall be due and payable within the time period specified in the second to last sentence of Section 13.3.B .

D. Effect of the Death of a DRO Partner . After the death of a DRO Partner who is an individual, the executor of the estate of such DRO Partner may elect to reduce (or eliminate) the DRO Amount of such DRO Partner. Such elections may be made by such executor by delivering to the General Partner within two hundred and seventy (270) days of the death of such Limited Partner, a written notice setting forth the maximum deficit balance in its Capital Account that such executor agrees to restore under this Section 13.3 , if any. If such executor does not make a timely election pursuant to this Section 13.3 (whether or not the balance in the applicable Capital Account is negative at such time), then the DRO Partner’s estate (and the beneficiaries thereof who receive distributions of Partnership Interests therefrom) shall be deemed a DRO Partner with a DRO Amount in the same amount as the deceased DRO Partner. Any DRO Partner which itself is a partnership for U.S. federal income tax purposes may likewise elect, after the date of its partner’s death to reduce (or eliminate) its DRO Amount by delivering a similar notice to the General Partner within the time period specified above, and in the absence of any such notice the DRO Amount of such DRO Partner shall not be reduced to reflect the death of any of its partners.

Section 13.4

Rights of Limited Partners

Except as otherwise provided in this Agreement, each Limited Partner shall look solely to the assets of the Partnership for the return of its Capital Contributions and shall have no right or power to demand or receive property other than cash from the Partnership. Except as otherwise expressly provided in this Agreement, no Limited Partner shall have priority over any other Limited Partner as to the return of its Capital Contributions, distributions, or allocations.

Section 13.5

Notice of Dissolution

If a Liquidating Event occurs or an event occurs that would, but for provisions of an election or objection by one or more Partners pursuant to Section 13.1 , result in a dissolution of the Partnership, the General Partner shall, within thirty (30) days thereafter, provide written notice thereof to each of the Partners and to all other parties with whom the Partnership regularly conducts business (as determined in the discretion of the General Partner).

Section 13.6

Cancellation of Certificate of Limited Partnership

Upon the completion of the liquidation of the Partnership cash and property as provided in Section 13.2 , the Partnership shall be terminated and the Certificate of Limited Partnership and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the State of Delaware shall be canceled and such other actions as may be necessary to terminate the Partnership shall be taken.

Section 13.7

Reasonable Time for Winding Up

A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Partnership and the liquidation of its assets pursuant to Section 13.2 , to minimize any losses otherwise attendant upon such winding-up, and the provisions of this Agreement shall remain in effect among the Partners during the period of liquidation.

Section 13.8

Waiver of Partition

Each Partner hereby waives any right to partition of the Partnership property.

Section 13.9

Liability of Liquidator

The Liquidator shall be indemnified and held harmless by the Partnership in the same manner and to the same degree as an Indemnitee may be indemnified pursuant to Section 7.7 .

ARTICLE XIV

AMENDMENT OF PARTNERSHIP

AGREEMENT; MEETINGS

Section 14.1

Amendments

A. General . The General Partner’s prior written consent shall be required to amend or waive any provisions of this Agreement. The General Partner, without consent of the Limited Partners, may amend this Agreement in any respect; provided , however , that the following amendments shall require Consent of the Outside Limited Partners:

(i) any amendment to Section 8.6 , its related defined terms or otherwise affecting the operation of the Conversion Factor or the Redemption Right, except as permitted pursuant to Section 8.6.E , in each case in a manner that adversely affects the Limited Partners in any material respects;

(ii) any amendment to Article V , its related defined terms or otherwise affecting the rights of the Limited Partners to receive the distributions payable to them hereunder, other than in connection with the creation or issuance of new or additional Partnership Interests pursuant to Section 4.2 and except as permitted pursuant to Section 4.2 and Section 5.4 , in each case in a manner that adversely affects the Limited Partners in any material respects;

(iii) any amendment to Article VI , its related defined terms or otherwise that would materially alter the Partnership’s allocation of Profit and Loss to the Limited Partners, other than in connection with the creation or issuance of new or additional Partnership Interests pursuant to Section 4.2 and except as permitted pursuant to Section 6.2 ;

(iv) any amendment that would (x) convert a Limited Partner’s interest in the Partnership into a general partner’s interest, (y) modify the limited liability of a Limited Partner, or (z) impose on the Limited Partners any obligation to make additional Capital Contributions to the Partnership, or

(v) any amendment to Section 4.2.A (proviso only), Section 7.5 , Section 11.2 , Section 11.3 and this Article XIV , in each case together with their related defined terms.

B. The General Partner shall notify the Limited Partners in writing of any amendment or waiver not requiring the Consent of the Outside Limited Partners made pursuant to Section 14.1.A in the next regular communication to the Limited Partners or within ninety (90) days of such amendment, whichever is earlier. For any amendment or waiver requiring the Consent of the Outside Limited Partners pursuant to Section 14.1.A , the General Partner shall seek the written Consent of the Partners as set forth in Section 14.2 on such proposed amendments or waivers or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. For purposes of obtaining a written Consent, the General Partner may require a response within a reasonable specified time, but not less than seven (7) days, and failure to respond in such time period shall constitute a vote in favor of the recommendation of the General Partner. Any such proposed amendment or waiver shall be adopted and be effective as an amendment or waiver hereto if it is approved by the General Partner and receives the Consent of the Outside Limited Partners, as applicable, in accordance with Sections 14.1.A .

C. Amendment and Restatement of Partner Registry Not an Amendment . Notwithstanding anything in this Article XIV or elsewhere in this Agreement to the contrary, any amendment and restatement of the Partner Registry by the General Partner to reflect events or changes otherwise authorized or permitted by this Agreement shall not be deemed an amendment of this Agreement and may be done at any time and from time to time, as determined by the General Partner without the Consent of the Outside Limited Partners and without any notice requirement.

Section 14.2

Meetings of the Partners

A. General . Meetings of the Partners may be called by the General Partner. The call shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Partners not less than seven (7) days nor more than thirty (30) days prior to the date of such meeting. Partners may vote in person or by proxy at such meeting. Whenever the vote or Consent of Partners is permitted or required under this Agreement, such vote or Consent may be given at a meeting of Partners or may be given in accordance with the procedure prescribed in Section 14.1.A . Except as otherwise expressly provided in this Agreement, the Consent of holders of Partnership Interests representing a majority of the Percentage Interests of the Class A Units shall control (including Class A Units held by the General Partner).

B. Actions Without a Meeting . Except as otherwise expressly provided by this Agreement, any action required or permitted to be taken at a meeting of the Partners may be taken without a meeting if a written consent setting forth the action so taken is signed by Partners holding Partnership Interests representing more than fifty percent (50%) (or such other percentage as is expressly required by this Agreement) of the Percentage Interest of the Class A Units (including Class A Units held by the General Partner). Such consent may be in one instrument or in several instruments, and shall have the same force and effect as a vote of Partners. Such consent shall be filed with the General Partner. An action so taken shall be deemed to have been taken at a meeting held on the date on which written consents from the Partners holding the required Percentage Interest of the Class A Units have been filed with the General Partner.

C. Proxy . Each Limited Partner may authorize any Person or Persons to act for him by proxy on all matters in which a Limited Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Limited Partner or its attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Limited Partner executing it, such revocation to be effective upon the Partnership’s receipt of written notice thereof.

D. Votes . On matters on which Limited Partners are entitled to vote, each Limited Partner shall have the number of votes equal to the number of Class A Units held.

E. Conduct of Meeting . Each meeting of Partners shall be conducted by the General Partner or such other Person as the General Partner may appoint pursuant to such rules for the conduct of the meeting as the General Partner or such other Person deem appropriate.

ARTICLE XV

GENERAL PROVISIONS

Section 15.1

Addresses and Notice

Any notice, demand, request or report required or permitted to be given or made to a Partner or Assignee under this Agreement shall be in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail or by other means of written communication (including, but not limited to, via e-mail) to the Partner or Assignee at the address set forth in the Partner Registry or such other address as the Partners shall notify the General Partner in writing.

Section 15.2

Titles and Captions

All article or section titles or captions in this Agreement are for convenience only. They shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof. Except as specifically provided otherwise, references to “Articles” “Sections” and “Exhibits” are to Articles, Sections and Exhibits of this Agreement.

Section 15.3

Pronouns and Plurals

Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

Section 15.4

Further Action

The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

Section 15.5

Binding Effect

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.

Section 15.6

Creditors

Other than as expressly set forth herein with regard to any Indemnitee, none of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership.

Section 15.7

Waiver

No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

Section 15.8

Counterparts

This Agreement may be executed in counterparts, all of which together shall constitute one agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

Section 15.9

Applicable Law

This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.

Section 15.10

Invalidity of Provisions

If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

Section 15.11

Power of Attorney

A. General . Each Limited Partner and each Assignee who accepts Partnership Units (or any rights, benefits or privileges associated therewith) is deemed to irrevocably constitute and appoint the General Partner, any Liquidator and authorized officers and attorneys-in-fact of each, and each of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to:

(1)

execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (a) all certificates, documents and other instruments (including, without

limitation, this Agreement and the Certificate of Limited Partnership and all amendments or restatements thereof) that the General Partner or any Liquidator deems appropriate or necessary to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property, (b) all instruments that the General Partner or any Liquidator deem appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms, (c) all conveyances and other instruments or documents that the General Partner or any Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including, without limitation, a certificate of cancellation, (d) all instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Article XI , XII or XIII hereof or the Capital Contribution of any Partner and (e) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of Partnership Interests; and

(2)

execute, swear to, acknowledge and file all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole and absolute discretion of the General Partner or any Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Partners hereunder or is consistent with the terms of this Agreement or appropriate or necessary, in the sole and absolute discretion of the General Partner or any Liquidator, to effectuate the terms or intent of this Agreement.

Nothing contained in this Section 15.11 shall be construed as authorizing the General Partner or any Liquidator to amend this Agreement except in accordance with Article XIV hereof or as may be otherwise expressly provided for in this Agreement.

B. Irrevocable Nature . The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, in recognition of the fact that each of the Partners will be relying upon the power of the General Partner or any Liquidator to act as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership, and it shall survive and not be affected by the subsequent Incapacity of any Limited Partner or Assignee and the transfer of all or any portion of such Limited Partner’s or Assignee’s Partnership Units and shall extend to such Limited Partner’s or Assignee’s heirs, successors, assigns and personal representatives. Each such Limited Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or any Liquidator, acting in good faith pursuant to such power of attorney; and each such Limited Partner or Assignee hereby waives any and all defenses which may be available to contest, negate or disaffirm the action of the General Partner or any Liquidator, taken in good faith under such power of attorney. Each Limited Partner or Assignee shall execute and deliver to the General Partner or the Liquidator, within fifteen (15) days after receipt of the General Partner’s or Liquidator’s request therefor, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator, as the case may be, deems necessary to effectuate this Agreement and the purposes of the Partnership.

Section 15.12

Entire Agreement

This Agreement contains the entire understanding and agreement among the Partners with respect to the subject matter hereof and supersedes any prior written oral understandings or agreements among them with respect thereto.

Section 15.13

No Rights as Shareholders

Nothing contained in this Agreement shall be construed as conferring upon the holders of the Partnership Units any rights whatsoever as shareholders of the General Partner Entity, including, without limitation, any right to receive dividends or other distributions made to shareholders of the General Partner Entity, or to vote or to consent or receive notice as shareholders in respect to any meeting of shareholders for the election of trustees (or directors, if applicable) of the General Partner Entity or any other matter.

Section 15.14

Limitation to Preserve REIT Status

If the General Partner Entity attempts to qualify as a REIT, to the extent that any amount paid or credited to the General Partner Entity or any of its officers, trustees, employees or agents pursuant to Section 7.4 or Section 7.7 would constitute gross income to the General Partner for purposes of Section 856(c)(2) or 856(c)(3) of the Code (a “ General Partner Payment ”) then, notwithstanding any other provision of this Agreement, the amount of such General Partner Payment for any Fiscal Year shall not exceed the lesser of:

(i) an amount equal to the excess, if any, of (a) 4% of the General Partner Entity’s total gross income (within the meaning of Section 856(c)(3) of the Code but not including the amount of any General Partner Payments) for the Fiscal Year which is described in subsections (A) though (H) of Section 856(c)(2) of the Code over (b) the amount of gross income (within the meaning of Section 856(c)(2) of the Code) derived by the General Partner Entity from sources other than those described in subsections (A) through (H) of Section 856(c)(2) of the Code (but not including the amount of any General Partner Payments); or

(ii) an amount equal to the excess, if any of (a) 24% of the General Partner Entity’s total gross income (but not including the amount of any General Partner Payments) for the Fiscal Year which is described in subsections (A) through (I) of Section 856(c)(3) of the Code over (b) the amount of gross income (within the meaning of Section 856(c)(3) of the Code but not including the amount of any General Partner Payments) derived by the General Partner Entity from sources other than those described in subsections (A) through (I) of Section 856(c)(3) of the Code;

provided , however , that General Partner Payments in excess of the amounts set forth in subparagraphs (i) and (ii) above may be made if the General Partner Entity, as a condition precedent, obtains an opinion of tax counsel that the receipt of such excess amounts would not adversely affect the General Partner Entity’s ability to qualify as a REIT. To the extent General Partner Payments

may not be made in a given Fiscal Year due to the foregoing limitations, such General Partner Payments shall carry over and be treated as arising in the following year; provided , however , that such amounts shall not carry over for more than five Fiscal Years, and if not paid within such five Fiscal Year period, shall expire; and provided further that (i) as General Partner Payments are made, such payments shall be applied first to carry over amounts outstanding, if any, and (ii) with respect to carry over amounts for more than one Fiscal Year, such payments shall be applied to the earliest Fiscal Year first.

[Remainder of page intentionally left blank, signature page follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.


GENERAL PARTNER:

QTS Realty Trust, Inc.

By:
Name:
Title:

LIMITED PARTNERS:


Chad L. Williams


Mark D. Waddington

Quality Investment Group QTS, LLC

By:
Name:
Title:

Quality Investment Group QTS II, LLC

By:
Name:
Title:

Quality Technology Group, LLC

By:
Name:
Title:

S-1

[Signature page continued]


Paradox Partners, LLC

By:
Name:
Title:


John W. Barter


Peter Marino


Shirley E. Goza

S-2

EXHIBIT A

FORM OF PARTNER REGISTRY


	CLASS A, CLASS O AND CLASS RS UNITS
Name and Address of Partner	Partnership Units	Capital Account Balance (as of the date hereof)	Percentage Interest (1)

GENERAL PARTNER :

QTS Realty Trust, Inc. 12851 Foster Street, Suite 205 Overland Park, Kansas 66213 Attn: Chad L. Williams Facsimile: (913) 312-5519

LIMITED PARTNERS :

[NAME]

[NAME]

[NAME]


TOTAL PARTNERSHIP UNITS	Class A Units			100.000	%

	Class O Units

	Class RS Units

NOTES :

(1)	For purposes of this calculation, the Class A Units, Class O Units and Class RS Units are treated as a single class.

Exhibit A-1

EXHIBIT B

CAPITAL ACCOUNT MAINTENANCE

1.	Capital Accounts of the Partners

A. The Partnership shall maintain for each Partner a separate Capital Account in accordance with the rules of Regulations Section l.704-l(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of all Capital Contributions and any other deemed contributions made by such Partner to the Partnership pursuant to this Agreement and (ii) all items of Partnership income and gain (including income and gain exempt from tax) computed in accordance with Section 1.B hereof and allocated to such Partner pursuant to Section 6.1 of the Agreement and Exhibit C thereof, and decreased by (x) the amount of cash or Agreed Value of property actually distributed or deemed to be distributed to such Partner pursuant to this Agreement and (y) all items of Partnership deduction and loss computed in accordance with Section 1.B hereof and allocated to such Partner pursuant to Section 6.1 of the Agreement and Exhibit C thereof.

B. For purposes of computing the amount of any item of income, gain, deduction or loss to be reflected in the Partners’ Capital Accounts, unless otherwise specified in this Agreement, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes determined in accordance with Section 703(a) of the Code (for this purpose all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

(1) Except as otherwise provided in Regulations Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and deduction shall be made without regard to any adjustments to the adjusted bases of the assets of the Partnership pursuant to Sections 754 of the Code, provided, however, that the amounts of any adjustments to the adjusted bases of the assets of the Partnership made pursuant to Section 734 of the Code as a result of the distribution of property by the Partnership to a Partner (to the extent that such adjustments have not previously been reflected in the Partners’ Capital Accounts) shall be reflected in the Capital Accounts of the Partners in the manner and subject to the limitations prescribed in Regulations Section l.704-1(b)(2)(iv)(m)(4).

(2) The computation of all items of income, gain, and deduction shall be made without regard to the fact that items described in Sections 705(a)(l)(B) or 705(a)(2)(B) of the Code are not includible in gross income or are neither currently deductible nor capitalized for federal income tax purposes.

Exhibit B-1

(3) Any income, gain or loss attributable to the taxable disposition of any Partnership property shall be determined as if the adjusted basis of such property as of such date of disposition were equal in amount to the Partnership’s Carrying Value with respect to such property as of such date.

(4) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year.

(5) In the event the Carrying Value of any Partnership asset is adjusted pursuant to Section 1.D hereof, the amount of any such adjustment shall be taken into account as gain or loss from the disposition of such asset.

(6) Any items specially allocated under Section 2 of Exhibit C to the Agreement hereof shall not be taken into account.

C. A transferee (including any Assignee) of a Partnership Unit shall succeed to a pro rata portion of the Capital Account of the transferor in accordance with Regulations Section 1.704-1(b)(2)(iv)(l).

D. (1) Consistent with the provisions of Regulations Section 1.704-1(b)(2)(iv)(f), and as provided in Section 1.D(2) , the Carrying Values of all Partnership assets shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as of the times of the adjustments provided in Section 1.D(2) hereof, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property and allocated pursuant to Section 6.1 of the Agreement.

(2) Such adjustments shall be made as of the following times: (a) immediately prior to the acquisition of an additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (b) immediately prior to the distribution by the Partnership to a Partner of more than a de minimis amount of property as consideration for an interest in the Partnership; (c) immediately prior to the liquidation of the Partnership within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g); and (d) immediately prior to the issuance of any LTIP Units; provided, however, that adjustments pursuant to clauses (a), (b) and (d) above shall be made only if the General Partner determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership.

(3) In accordance with Regulations Section 1.704- l(b)(2)(iv)(e), the Carrying Value of Partnership assets distributed in kind shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as of the time any such asset is distributed.

(4) In determining Unrealized Gain or Unrealized Loss for purposes of this Exhibit B , the aggregate cash amount and fair market value of all Partnership assets (including cash or cash equivalents) shall be determined by the General Partner using such reasonable method of valuation

Exhibit B-2

as it may adopt, or in the case of a liquidating distribution pursuant to Article XIII of the Agreement, shall be determined and allocated by the Liquidator using such reasonable methods of valuation as it may adopt. The General Partner, or the Liquidator, as the case may be, shall allocate such aggregate fair market value among the assets of the Partnership in such manner as it determines in its sole and absolute discretion to arrive at a fair market value for individual properties.

E. The provisions of the Agreement (including this Exhibit B and the other Exhibits to the Agreement) relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. In the event the General Partner shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Partnership, the General Partner, or the Limited Partners) are computed in order to comply with such Regulations, the General Partner may make such modification without regard to Article XIV of the Agreement, provided that it is not likely to have a material effect on the amounts distributable to any Person pursuant to Article XIII of the Agreement upon the dissolution of the Partnership. The General Partner also shall (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of Partnership capital reflected on the Partnership’s balance sheet, as computed for book purposes, in accordance with Regulations Section l.704-l(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section l.704-1(b).

2.	No Interest

No interest shall be paid by the Partnership on Capital Contributions or on balances in Partners’ Capital Accounts.

3.	No Withdrawal

No Partner shall be entitled to withdraw any part of its Capital Contribution or Capital Account or to receive any distribution from the Partnership, except as provided in Articles IV, V , VII and XIII of the Agreement.

Exhibit B-3

EXHIBIT C

SPECIAL ALLOCATION RULES

Special Allocation Rules.

Notwithstanding any other provision of the Agreement or this Exhibit C , the following special allocations shall be made in the following order:

A. Minimum Gain Chargeback . Notwithstanding the provisions of Section 6.1 of the Agreement or any other provisions of this Exhibit C , if there is a net decrease in Partnership Minimum Gain during any Fiscal Year, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner’s share of the net decrease in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Section 1.704-2(f)(6). This Section 1.A is intended to comply with the minimum gain chargeback requirements in Regulations Section 1.704-2(f) and for purposes of this Section 1.A only, each Partner’s Adjusted Capital Account Deficit shall be determined prior to any other allocations pursuant to Section 6.1 of the Agreement or this Exhibit C with respect to such Fiscal Year and without regard to any decrease in Partner Minimum Gain during such Fiscal Year.

B. Partner Minimum Gain Chargeback . Notwithstanding any other provision of Section 6.1 of this Agreement or any other provisions of this Exhibit C (except Section 1.A hereof), if there is a net decrease in Partner Minimum Gain attributable to a Partner nonrecourse Debt during any Fiscal Year, each Partner who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner’s share of the net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each General Partner and Limited Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Section 1.704-2(i)(4). This Section 1.B is intended to comply with the minimum gain chargeback requirement in such Section of the Regulations and shall be interpreted consistently therewith. Solely for purposes of this Section 1.B , each Partner’s Adjusted Capital Account Deficit shall be determined prior to any other allocations pursuant to Section 6.1 of the Agreement or this Exhibit C with respect to such Fiscal Year, other than allocations pursuant to Section 1.A hereof.

C. Qualified Income Offset . In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Regulations Sections 1.704-l(b)(2)(ii)(d)(4), l.704-1(b)(2)(ii)(d)(5), or 1.704-l(b)(2)(ii)(d)(6), and after giving effect to the allocations required

Exhibit C-1

under Sections 1.A and 1.B hereof with respect to such Fiscal Year, such Partner has an Adjusted Capital Account Deficit, items of Partnership income and gain (consisting of a pro rata portion of each item of Partnership income, including gross income and gain for the Fiscal Year) shall be specifically allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, its Adjusted Capital Account Deficit created by such adjustments, allocations or distributions as quickly as possible. This Section 1.C is intended to constitute a “qualified income offset” under Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

D. Gross Income Allocation . In the event that any Partner has an Adjusted Capital Account Deficit at the end of any Fiscal Year (after taking into account allocations to be made under the preceding paragraphs hereof with respect to such Fiscal Year), each such Partner shall be specially allocated items of Partnership income and gain (consisting of a pro rata portion of each item of Partnership income, including gross income and gain for the Fiscal Year) in an amount and manner sufficient to eliminate, to the extent required by the Regulations, its Adjusted Capital Account Deficit.

E. Nonrecourse Deductions . Except as may otherwise be expressly provided by the General Partner pursuant to Section 4.2 of the Agreement with respect to other classes of Partnership Units, Nonrecourse Deductions for any Fiscal Year shall be allocated only to the Partners holding Class A Units and Class B Units in accordance with their respective Percentage Interests. If the General Partner determines in its good faith discretion that the Partnership’s Nonrecourse Deductions must be allocated in a different ratio to satisfy the safe harbor requirements of the Regulations promulgated under Section 704(b) of the Code, the General Partner is authorized, upon notice to the Limited Partners, to revise the prescribed ratio for such Fiscal Year to the numerically closest ratio which would satisfy such requirements.

F. Partner Nonrecourse Deductions . Any Partner Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Partner who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with Regulations Sections 1.704-2(b)(4) and 1.704-2(i).

G. Adjustments Pursuant to Code Section 734 and Section 743 . To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Regulations Section 1.704-l(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Regulations.

Exhibit C-2

2.	Allocations for Tax Purposes

A. Except as otherwise provided in this Section 2 , for federal income tax purposes, each item of income, gain, loss and deduction shall be allocated among the Partners in the same manner as its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit C .

B. In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or Adjusted Property, items of income, gain, loss, and deduction shall be allocated for federal income tax purposes among the Partners as follows:

(1) (a) In the case of a Contributed Property, such items attributable thereto shall be allocated among the Partners consistent with the principles of Section 704(c) of the Code to take into account the variation between the Section 704(c) Value of such property and its adjusted basis at the time of contribution (taking into account Section 2.C of this Exhibit C ); and

(b) any item of Residual Gain or Residual Loss attributable to a Contributed Property shall be allocated among the Partners in the same manner as its correlative item of “book” gain or loss is allocated pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit C .

(2) (a) In the case of an Adjusted Property, such items shall

(i) first, be allocated among the Partners in a manner consistent with the principles of Section 704(c) of the Code to take into account the Unrealized Gain or Unrealized Loss attributable to such property and the allocations thereof pursuant to Exhibit B ;

(ii) second, in the event such property was originally a Contributed Property, be allocated among the Partners in a manner consistent with Section 2.B(1) of this Exhibit C ; and

(b) any item of Residual Gain or Residual Loss attributable to an Adjusted Property shall be allocated among the Partners in the same manner its correlative item of “book” gain or loss is allocated pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit C .

(3) all other items of income, gain, loss and deduction shall be allocated among the Partners the same manner as their correlative item of “book” gain or loss is allocated pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit C .

C. To the extent Regulations promulgated pursuant to Section 704(c) of the Code permit a Partnership to utilize alternative methods to eliminate the disparities between the Carrying Value of property and its adjusted basis, the General Partner shall, subject to any agreements between the Partnership and a Partner have the authority to elect the method to be used by the Partnership and such election shall be binding on all Partners.

Exhibit C-3

EXHIBIT D

NOTICE OF REDEMPTION

The undersigned hereby irrevocably (i) redeems Partnership Units in QualityTech, LP in accordance with the terms of the Fifth Amended and Restated Agreement of Limited Partnership of QualityTech, LP, as amended, and the Redemption Right referred to therein, (ii) surrenders such Partnership Units and all right, title and interest therein and (iii) directs that the Cash Amount or Shares Amount (as determined by the General Partner) deliverable upon exercise of the Redemption Right be delivered to the address specified below, and if Shares are to be delivered, such Shares be registered or placed in the name(s) and at the address(es) specified below. The undersigned hereby represents, warrants, and certifies that the undersigned (a) has marketable and unencumbered title to such Partnership Units, free and clear of the rights of or interests of any other person or entity, (b) has the full right, power and authority to redeem and surrender such Partnership Units as provided herein and (c) has obtained the consent or approval of all persons or entities, if any, having the right to consult or approve such redemption and surrender.


Dated:						Name of Limited Partner:


						(Signature of Limited Partner)


						(Street Address)



						(City) (State) (Zip Code)

						Signature Guaranteed by:

Exhibit D-1


IF SHARES ARE TO BE ISSUED, ISSUE TO:

Name:



Social Security or tax identifying number:

Exhibit D-2

EXHIBIT E

FORM OF DRO REGISTRY


PART I DRO PARTNERS		DRO AMOUNT

PART II DRO PARTNERS

Exhibit E-1

EXHIBIT F

NOTICE OF ELECTION BY HOLDER TO CONVERT

CLASS RS LTIP UNITS INTO CLASS A UNITS

The undersigned holder of Class RS LTIP Units hereby irrevocably (i) elects to convert Vested Class RS LTIP Units in QualityTech, LP (the “Partnership”) into Class A Units in accordance with the terms of the Fifth Amended and Restated Agreement of Limited Partnership of the Partnership, as may be amended from time to time; and (ii) directs that any cash in lieu of Class A Units that may be deliverable upon such conversion be delivered to the address specified below. The undersigned hereby represents, warrants and certifies that the undersigned (a) has title to such Vested Class RS LTIP Units, free and clear of the rights or interests of any other person or entity other than the Partnership; (b) has the full right, power and authority to cause the conversion of such Vested Class RS LTIP Units as provided herein; and (c) has obtained the consent to or approval of all persons or entities, if any, having the right to consent or approve such conversion.


Dated:						Name of Holder:


						(Signature of Holder)


						(Street Address)


						(City) (State) (Zip Code)

						Signature Guaranteed by:

Ex. F-1

EXHIBIT G

NOTICE OF ELECTION BY PARTNERSHIP TO REQUIRE CONVERSION OF

CLASS RS LTIP UNITS INTO CLASS A UNITS

QualityTech, LP (the “Partnership”) hereby irrevocably elects to cause the number of Class RS LTIP Units held by the holder of Class RS LTIP Units set forth below to be converted into Class A Units in accordance with the terms of the Fifth Amended and Restated Agreement of Limited Partnership of the Partnership, as may be amended from time to time.


		Name of Holder:

		Date of this Notice:

		Number of Class RS LTIP Units to be Converted:

		Please Print: Exact Name as Registered with Partnership

Ex. G-1

EXHIBIT H

NOTICE OF ELECTION BY HOLDER TO CONVERT

CLASS O LTIP UNITS INTO CLASS A UNITS

The undersigned holder of Class O LTIP Units hereby irrevocably (i) elects to convert Vested Class O LTIP Units in QualityTech, LP (the “ Partnership ”) into Class A Units in accordance with the terms of the Fifth Amended and Restated Agreement of Limited Partnership of the Partnership, as may be amended from time to time; and (ii) directs that any cash in lieu of Class A Units that may be deliverable upon such conversion be delivered to the address specified below. The undersigned hereby represents, warrants and certifies that the undersigned (a) has title to such Vested Class O LTIP Units, free and clear of the rights or interests of any other person or entity other than the Partnership; (b) has the full right, power and authority to cause the conversion of such Vested Class O LTIP Units as provided herein; and (c) has obtained the consent to or approval of all persons or entities, if any, having the right to consent or approve such conversion.


Dated:						Name of Holder:


						(Signature of Holder)


						(Street Address)


						(City) (State) (Zip Code)

						Signature Guaranteed by:

Ex. G-1

EXHIBIT I

NOTICE OF ELECTION BY PARTNERSHIP TO REQUIRE CONVERSION OF

CLASS O LTIP UNITS INTO CLASS A UNITS

QualityTech, LP (the “ Partnership ”) hereby irrevocably elects to cause the number of Class O LTIP Units held by the holder of Class O LTIP Units set forth below to be converted into Class A Units in accordance with the terms of the Fifth Amended and Restated Agreement of Limited Partnership of the Partnership, as may be amended from time to time.


		Name of Holder:

		Date of this Notice:

		Number of Class O LTIP Units to be Converted:

		Please Print: Exact Name as Registered with Partnership

Ex. I-1

Exhibit 10.4

EMPLOYMENT AGREEMENT

(Chad L. Williams)

THIS EMPLOYMENT AGREEMENT (the “ Agreement ”) is made as of August 15, 2013 (“ Effective Date ”), by and among QualityTech, LP, a Delaware limited partnership (the “ Company ”), QualityTech GP, LLC, a Delaware limited liability company and general partner of the Company (together with any successor general partner of the Company, the “ General Partner ”), Quality Technology Services, LLC, a Delaware limited liability company and an affiliate of the Company (“ QTS LLC ”), and Chad L. Williams, an individual (“ Executive ”), with respect to the following facts and circumstances:

RECITALS

WHEREAS, QTS LLC desires to employ Executive as Chief Executive Officer (“ CEO ”) of the Company, and the General Partner desires to appoint Executive as its CEO, and Executive desires to accept such employment and appointment, on the terms set forth below.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE 1

EMPLOYMENT, TERM AND DUTIES

1.1 Employment and Positions . During the Term (defined below), QTS LLC shall employ Executive as the CEO of the Company, upon the terms and conditions set forth in this Agreement, and Executive shall report directly to the Board of Managers (or Board of Directors or other comparable governing body, as applicable) of the General Partner (the “ Board ”), unless otherwise determined by the Board. In addition, during the Term, Executive shall serve as the CEO of the General Partner and shall report to the Board, unless otherwise determined by the Board.

1.2 Term . The period of employment of the Executive by the Company shall, subject to earlier termination as provided in this Agreement, commence upon the date hereof (the “Effective Date” ) and continue thereafter for a term (the “ Term ”) of three (3) years; provided , that the Term shall automatically renew for additional one (1)-year periods unless either QTS LLC or Executive gives notice of non-renewal at least ninety (90) days prior to expiration of the Term (as it may have been extended by any renewal period).

1.3 Service as an Employee . During the Term, Executive shall (a) perform all duties and obligations reasonably associated with the position of CEO of the General Partner and the Company, consistent with the Bylaws or other governing documents of the Company and the General Partner, as applicable, as in effect from time to time, and (b) perform such other duties reasonably associated with a senior executive officer of the business of the Company, the General Partner, QTS LLC and their subsidiaries and affiliates (the “ Quality Companies ”), including duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the Board (including the performance of services

for the board of directors or a comparable governing body of, any member of the Quality Companies without any additional compensation), subject, in all cases described in clauses (a) and (b), to the supervision and direction of the Board. Executive shall devote substantially all of his business time and effort to the performance of Executive’s duties hereunder and to the affairs of the Quality Companies; provided, that in no event shall this provision prohibit Executive from (i) performing social, civic, charitable and religious activities, (ii) managing personal investments and affairs, including active involvement in real estate or other investments not involving data centers in any material respect, (iii) participating in educational or professional associations, or (iv) any other activities approved by the Board, so long as the activities set forth in clauses (i) through (iv) above do not materially and adversely interfere with Executive’s duties and obligations hereunder or to the business affairs of the Quality Companies.

1.4 Service as a Director . During the Term, the General Partner agrees that Executive shall be nominated for election to and as Chairman of the Board at each annual meeting of the General Partner’s equityholders or other meeting of the General Partner’s equityholders at which directors are elected. Provided that Executive is so nominated and is elected, Executive hereby agrees to serve as Chairman of the Board.

ARTICLE 2

COMPENSATION

2.1 Salary . In consideration for Executive’s services hereunder, QTS LLC shall pay Executive an annual salary at the rate of not less than $550,000 per year during each of the years of the Term, payable in accordance with QTS LLC’s regular payroll schedule from time to time (less any deductions required for Social Security, state, federal and local withholding taxes, and any other authorized or mandated similar withholdings). The annual salary shall be reviewed by the Compensation Committee of the Board (the “ Compensation Committee ”), or, if there is none, the Board, no less frequently than annually. Executive’s salary may be adjusted upward upon annual review, but shall not be decreased.

2.2 Bonus . In addition to an annual base salary, if the Executive achieves certain corporate and individual objectives as established by the Compensation Committee, or if there is none, the Board, then QTS LLC shall pay to the Executive bonus compensation, not later than 75 days following the end of the fiscal year. QTS LLC’s award of bonus compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of his duties hereunder, that may be established from time to time for the calculation of bonus awards by the Compensation Committee, or if there is none, the Board, which shall be established and communicated to Executive in writing no later than sixty (60) days following the beginning of the applicable fiscal year. The factors and criteria for the bonus applicable to the period beginning with the first year of the Term shall be delivered to Executive prior to the execution of this Agreement. Annual bonuses will be targeted at 100% of annual salary with 100% of annual salary paid for targeted performance and additional amounts paid for exceptional performance as determined by the Compensation Committee, if there is one, and approved by the Board. The Board may award discretionary bonuses in addition to performance bonuses.

2.3 Equity Award . Executive previously has received a one-time award of 500,000 Class O LTIP Units in QualityTech Employee Pool, LLC (the “ Equity Award ”). The Equity Award is subject to a four (4)-year vesting schedule and will become 100% vested upon either the occurrence of a “Change of Control” as defined in the QualityTech, LP 2010 Equity Incentive Plan or as otherwise provided in this Agreement. The Equity Awards are in the form of partnership “profits interest” units and, accordingly, require Executive to complete a form Section 83(b) election. Additional equity awards may be made in accordance with the Company’s policies and as deemed appropriate by the Compensation Committee.

ARTICLE 3

EXECUTIVE BENEFITS

3.1 Vacation . Executive shall be entitled to the greater of twenty-five (25) days of paid vacation or at least the equivalent paid vacation provided to other executives of the Company, the General Partner and QTS LLC, for each calendar year of the Term in accordance with the general policies of the Company and QTS LLC applicable to other senior executives of the Company, the General Partner and QTS LLC. Unused vacation shall carry over, if at all, in accordance with the general policies of the Company and QTS LLC as the same shall be in effect from time to time. For the avoidance of doubt, any days on which Executive works remotely or otherwise works from a location outside of Executive’s normal work location shall not be deemed to constitute vacation days to which Executive is entitled by virtue of this Section 3.1 .

3.2 Employee Benefits . Executive shall receive all group insurance and retirement plan benefits and any other benefits on the same basis as are available to other senior executives of the Company, the General Partner and QTS LLC under the personnel policies in effect from time to time, and Executive shall be provided individual life and disability insurance benefits on substantially the same terms as apply to the Company’s and the General Partner’s top executives. Executive shall receive all other such fringe benefits as the Company, the General Partner and QTS LLC may offer to other senior executives generally under personnel policies in effect from time to time, such as health and disability insurance coverage and paid sick leave. Executive’s Family shall be covered under the Company’s health insurance plan, or, to the extent the same is not so permitted by law or the terms of such health insurance plans, Company shall pay or reimburse Executive for the cost of substantially similar coverage during the Term and as otherwise provided below following the Termination Date. For purposes of this Agreement, Executive’s “ Family ” shall include Executive’s spouse, children and legal dependents. To the extent the same is not so permitted by law or the terms of its health insurance plans, the Company shall provide health insurance to Executive’s father, mother, sister and the children or legal dependents of Executive’s sister (the “ Extended Family ”) with coverage commensurate with that offered to employees of the Company, provided , however , that Executive shall reimburse the Company for such coverage of Executive’s Extended Family in an amount equal to the insurance premium cost incurred by the Company plus the amount paid by the Company for the self-insured portion of such coverage, if any, up to but not in excess of the self-insured cap for such coverage (“ Extended Family Coverage” ). The Company shall notify Executive of the amount that Executive must reimburse the Company for such Extended Family Coverage, and Executive shall pay such amount by December 31 of the calendar year following the calendar year in which such Extended Family Coverage was provided.

3.3 Reimbursement for Expenses . Executive shall be reimbursed for all documented reasonable expenses incurred by Executive in the performance of his duties set forth in Section 1.3 and in furtherance of the business of the Quality Companies, including those for administrative support set forth below, in accordance with the reimbursement policies in effect from time to time. Any reimbursement under this Section 3.3 that is taxable to Executive shall be made by December 31 of the calendar year following the calendar year in which Executive incurred the expense.

3.4 Administrative Support . Executive shall be provided with administrative support commensurate with Executive’s position in the Company and Executive’s duties set forth in Section 1.3 , in addition to executive support services applicable to other senior executives of the Company. The Company shall make available to Executive the services of a full-time assistant who may assist the Executive in Company and personal matters. In addition, Executive may from time to time seek assistance from two Company employees agreed upon by Executive and the Company for personal accounting and financial matters. To the extent that Executive utilizes other employees for matters unrelated to Company business, such arrangements will be in accordance with established procedures, including reimbursement of the reasonable value associated with any material use. In the event Executive’s use of other Company employees is expected to become material, Executive shall notify the Company’s Chief Financial Officer, Chief Operating Officer or General Counsel (“ Executive Leader ”) and the Executive Leader shall, in the sole discretion of the Executive Leader, determine whether such employee is able to accommodate Executive’s request. If the Executive Leader determines such employee is capable of completing Executive’s request, the Executive Leader will establish a written procedure for Executive’s use of such employee and Executive shall comply with such procedure, including reimbursement of the reasonable value associated with such use. If the Executive Leader determines such employee is not capable of completing Executive’s request, the Executive Leader will notify the Executive and recommend a path forward in writing, including, if necessary, the use of an outside vendor. Executive’s use of Company employees from time to time pursuant to this Section 3.4 shall not individually or in the aggregate constitute grounds for termination with Cause as defined in Section 4.1.2 of this Agreement unless Executive shall have refused to reimburse the Company for material use of an employee within thirty (30) days of an Executive Leader’s written demand.

ARTICLE 4.

TERMINATION

4.1 Grounds for Termination .

Company, if any, or (y) if no such insurance coverage is provided, that in the good faith judgment of the Board, prevents or would prevent Executive from performing his duties and obligations under this Agreement or participating effectively and actively in the management of the business of the Quality Companies for more than three consecutive months or for more than 90 days in any 180-day period.

4.1.2 Cause . QTS LLC shall have the right to terminate Executive’s employment by giving written notice of such termination to Executive upon the occurrence of any one or more of the following events (which, for purposes of this Agreement, shall constitute “ Cause ”):

(a)

any willful act or omission by Executive, other than as a result of Executive’s death or Disability, that causes material harm and represents a breach of Section 5.1 ;

(b)

Executive’s conviction and exhaustion of all appeals of, or pleading guilty or nolo contendere to, a crime that constitutes a felony involving dishonesty or moral turpitude; or

(c)

Executive’s willful commission of an act of fraud, embezzlement, misappropriation or breach of fiduciary duty against any of the Quality Companies; provided that no act or failure to act on the part of Executive shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of the applicable Quality Company. Any act or failure to act, based upon specific authority given pursuant to a resolution duly adopted by the Board or a committee thereof or based on the advice of counsel for the Company or the General Partner shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the applicable Quality Company.

Except as provided in Section 4.1.1 of this Agreement, any termination of Executive by the Company for any reason, including without limitation, a termination for alleged failures of performance, shall be deemed a termination without Cause, unless it is established that the reason for the termination was the occurrence of an event constituting Cause.

It shall be a condition precedent to QTS LLC’s right to terminate Executive’s employment for Cause under clauses (a) or (c) above that Cause be established as follows: (i) QTS LLC shall have first given Executive written notice stating with reasonable specificity the act(s) on which such termination is premised within twenty (20) days after the party providing such notice becomes aware or reasonably should have become aware of such act, and (ii) the Board by affirmative vote of at least three-fourths of its members (other than Executive if then serving as a member of the Board) find that the act alleged to be Cause constitutes Cause, has not been cured or remedied within thirty (30) days after receipt of such notice, and provided, such act is of such a nature that it

cannot with due diligence be cured within the time required, Executive shall not have commenced, or shall not thereafter diligently prosecute to completion, all steps necessary to cure such act alleged to be Cause within a reasonable period of time.

4.1.3 Good Reason . Executive may terminate his employment under this Agreement by giving written notice to QTS LLC upon the occurrence of any one or more of the following events (which, for purposes of this Agreement, shall constitute “ Good Reason ”):

(a)

diminution in Executive’s authority, duties or responsibilities, or any adverse change in Executive’s title as CEO of the Company or in Executive’s title as Chairman of the Board or CEO the General Partner (including failure of Executive to be elected Chairman of the Board at any annual meeting of the General Partner’s equityholders), or failure of the General Partner to nominate Executive for election as Chairman of the Board at any annual meeting of the General Partner’s equityholders;

(b)

Executive’s place of employment is moved more than fifty (50) miles from the Company’s current location in Overland Park, Kansas;

(c)

any diminution in Executive’s base compensation, as in effect from time to time;

(d)

a material breach by the Company, QTS LLC or the General Partner of any term of this Agreement; or

(e)

the failure of any successor to the Company, QTS LLC or the General Partner to assume this Agreement.

It shall be a condition precedent to Executive’s right to terminate his employment for Good Reason that (a) he shall have first given the Board written notice stating with reasonable specificity the act(s) on which such termination is premised within ninety (90) days after Executive becomes aware of such act(s), (b) if such act(s) is susceptible of cure or remedy, it has not been cured or remedied within thirty (30) days after receipt of such notice, and Executive has terminated his employment within twelve (12) months after the occurrence of the event giving rise to Good Reason.

4.1.4 Any Other Reason . Notwithstanding anything to the contrary herein, QTS LLC shall have the right to terminate Executive’s employment under this Agreement at any time without Cause by giving written notice of such termination to Executive, and Executive shall have the right to terminate Executive’s employment under this Agreement at any time without Good Reason by giving written notice of such termination to QTS LLC. Any notice by Executive hereunder shall be given at least ninety (90) days in advance of such termination. Any notice by Company shall be given at least ninety (90) days in advance of such termination.

4.2 Termination Date . Except as provided in Section 4.1.1 with respect to Executive’s death or Disability, any termination under Section 4.1 shall be effective on the termination of the applicable notice period following receipt of notice by Executive or QTS LLC, as the case may be, of such termination or upon such other later date as may be provided herein or specified by QTS LLC or Executive in the notice (the “ Termination Date ”).

4.3 Effect of Termination .

4.3.1 Termination with Cause or without Good Reason . In the event that Executive’s employment is terminated by QTS LLC with Cause or by Executive without Good Reason, QTS LLC shall pay, in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by applicable law (i) all Accrued Obligations to Executive, and (ii) any performance bonus or discretionary bonus under Section 2.2 that has been earned or declared for a bonus period ending before the Termination Date but not paid before the Termination Date. For purposes of this Agreement, the term “ Accrued Obligations ” means the sum of (a) Executive’s salary hereunder through the Termination Date to the extent not theretofore paid; (b) the amount of any accrued but unused vacation pay; and (c) any business expense reimbursements incurred by Executive as of the Termination Date and submitted for reimbursement, in each case, consistent with the policy for such reimbursements, within ten (10) days following the Termination Date.

4.3.2 Termination without Cause or with Good Reason . In the event that Executive’s employment is terminated by QTS LLC without Cause or by Executive for Good Reason:

(a)

QTS LLC shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law;

(b)

QTS LLC shall pay to Executive, in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law, any performance bonus or discretionary bonus under Section 2.2 that has been earned or declared for a bonus period ending before the Termination Date but not paid before the Termination Date;

(c)

If not previously vested in full, the Equity Award and any other equity awards granted to Executive following the date hereof shall fully vest as of the Termination Date;

(d)

QTS LLC shall pay to Executive, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date, an amount equal to two (2) times Executive’s annual salary as in effect on the Termination Date;

(e)

QTS LLC shall pay to Executive, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date an amount equal to two (2) times Executive’s Annual Bonus (as defined below) for the year in which the termination occurs; and

(f)

QTS LLC shall, to the extent permitted by law or the terms of such health insurance plans, continue to cover Executive and Executive’s Family under the Quality Companies’ health insurance plans that covered such individuals immediately prior to the Termination Date for up to twenty-four (24) months following the Termination Date, or, to the extent the same is not so permitted, pay or reimburse the cost of substantially similar coverage for Executive and his Family for up to twenty-four (24) months following the Termination Date. To the extent the same is not so permitted by law or the terms of its health insurance plans, the Company shall provide Extended Family Coverage to Executive’s Extended Family for up to twenty-four (24) months following the Termination Date, and Executive shall reimburse the Company for such Extended Family Coverage in the manner provided in Section 3.2 . Any reimbursement under this Section 4.3.2(f) that is taxable to Executive or any of his Family members shall be made (subject to the provisions of such health care plans that may require earlier payment) by December 31 of the calendar year following the calendar year in which Executive or any member of Executive’s Family incurred the expense. Executive shall provide appropriate HIPPA releases necessary to determine cost and reimbursement requirements associated with Family and Extended Family coverage.

QTS LLC’s delivery of any notice under Section 1.2 of this Agreement that the Agreement will not be renewed and any subsequent termination of Executive’s employment at the expiration of such Term of the Agreement shall not be considered a termination without Cause, and Executive shall not be entitled to any payments or benefits under this Section 4.3.2 under such circumstance.

4.3.3 Termination Due to Death or Disability . In the event that Executive’s employment is terminated due to Executive’s death or Disability, QTS LLC shall pay Executive the following:

(a)

QTS LLC shall pay all Accrued Obligations to Executive or Executive’s legal representative, in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law;

(b)

QTS LC shall pay to Executive, in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law, any performance bonus or discretionary bonus under Section 2.2 that has been earned or declared for a bonus period ending before the Termination Date but not paid before the Termination Date;

(c)

If not previously vested in full, the Equity Award and any other equity awards granted to Executive following the date hereof shall fully vest as of the Termination Date;

(d)

QTS LLC shall pay to Executive or Executive’s legal representative, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date an amount equal to one (1) times Executive’s annual salary as in effect on the Termination Date;

(e)

QTS LLC shall pay to Executive or Executive’s legal representative, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date an amount equal to one (1) times Executive’s Annual Bonus (as defined below) for the year in which the termination occurs; and

(f)

QTS LLC shall, to the extent permitted by law or the terms of such health insurance plans, continue to cover Executive and Executive’s Family under the Quality Companies’ health insurance plans that covered such individuals immediately prior to the Termination Date for up to twenty-four (24) months following the Termination Date, or, to the extent the same is not so permitted, pay or reimburse the cost of substantially similar coverage for Executive and his Family for up to twenty-four (24) months following the Termination Date. To the extent the same is not so permitted by law or the terms of its health insurance plans, the Company shall provide Extended Family Coverage to Executive’s Extended Family for up to twenty-four (24) months following the Termination Date, and Executive shall reimburse the Company for such Extended Family Coverage in the manner provided in Section 3.2 . Any reimbursement under this Section 4.3.3(f) that is taxable to Executive or any of his Family members shall be made (subject to the provisions of such health care plans that may require earlier payment) by December 31 of the calendar year following the calendar year in which Executive or any member of Executive’s Family incurred the expense. Executive shall provide appropriate HIPPA releases necessary to determine cost and reimbursement requirements associated with Family and Extended Family coverage.

4.3.4 Termination upon Change in Control . In the event that Executive’s employment is terminated following a Change in Control, the following provisions shall apply:

(a)

Upon the occurrence of a Triggering Event:

(1) QTS LLC shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law;

(2) QTS LC shall pay to Executive, in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date

required by law, any performance bonus or discretionary bonus under Section 2.2 that has been earned or declared for a bonus period ending before the Termination Date but not paid before the Termination Date;

(3) If not previously vested in full, the Equity Award and any other equity awards granted to Executive following the date hereof shall fully vest as of the Termination Date;

(4) QTS LLC shall pay to Executive, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date, an amount equal to three (3) times Executive’s annual salary as in effect on the date of the Triggering Event or on the date on which the Change in Control occurs, whichever is higher;

(5) QTS LLC shall pay to Executive, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date an amount equal to three (3) times Executive’s Annual Bonus (as defined below) for the year in which the termination occurs;

(6) QTS LLC shall, to the extent permitted by law or the terms of such health insurance plans, continue to cover Executive and Executive’s Family under the Quality Companies’ health insurance plans that covered such individuals immediately prior to the Termination Date for up to twenty-four (24) months following the Termination Date, or, to the extent the same is not so permitted, pay or reimburse the cost of substantially similar coverage for Executive and his Family for up to twenty-four (24) months following the Termination Date. To the extent the same is not so permitted by law or the terms of its health insurance plans, the Company shall provide Extended Family Coverage to Executive’s Extended Family for up to twenty-four (24) months following the Termination Date, and Executive shall reimburse the Company for such Extended Family Coverage in the manner provided in Section 3.2 . Any reimbursement under this Section 4.3.4(a)(6) that is taxable to Executive or any of his Family members shall be made (subject to the provisions of such health care plans that may require earlier payment) by December 31 of the calendar year following the calendar year in which Executive or any member of Executive’s Family incurred the expense. Executive shall provide appropriate HIPPA releases necessary to determine cost and reimbursement requirements associated with Family and Extended Family coverage.

(7) QTS LLC shall provide Executive, at QTS LLC’s expense, with outplacement services and support, the scope and provider of which will be selected by Executive, for a period of one (1) year following the date of the Triggering Event.

(b)

“ Change in Control ” means:

(1) Prior to any initial public offering of securities of the General Partner (“ IPO ”), (i) any transaction or series of transactions pursuant to which ownership of at least 30% of the combined voting power of the Company’s outstanding voting securities as of the Effective Date is transferred (through merger, transfer of units or other similar transaction) to persons or entities other than the persons or entities (“ Incumbent Partners ”) who were partners of the Company as of the Effective Date, or (ii) any transfer of direct or indirect ownership or control of QTS LLC or its assets by the Company, and

(2) Following an IPO, Change of Control means:

A. Any “person” as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) (other than the General Partner or the Company, any Incumbent Partner, any trustee or other fiduciary holding securities under any employee benefit plan of the General Partner, the Company or QTS LLC or any corporation owned, directly or indirectly, by the partners of the Company in substantially the same proportion as their ownership of interests in the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the General Partner or the Company representing 30% or more of the then combined voting power of the then outstanding voting securities of the General Partner or the Company, as the case may be;

B. During any period of twelve (12) consecutive months, individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the General Partner or the Company to effect a transaction described in clause (A), (C) or (D) hereof) whose election by the Board or nomination for election by the General Partner’s equityholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or actual threatened solicitation of proxies or consents by or on behalf of a person other than the Board, cease for any reason to constitute at least a majority of the Board;

thereof) pursuant to applicable exchange requirements, other than (A) a merger or consolidation which would result in (x) the voting securities of the General Partner outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) more than 70% of the combined voting power of the voting securities of the General Partner or such surviving or parent entity outstanding immediately after such merger or consolidation and (y) the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) more than 70% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the General Partner or the Company (or similar transaction) in which no “person” (as defined above) is or becomes the beneficial owner, directly or indirectly, of securities of the General Partner or the Company representing 30% or more of the then combined voting power of the General Partner’s or the Company’s, as the case may be, then outstanding voting securities; or

D. The consummation of the sale or disposition by the General Partner or the Company of all or substantially all of the assets of the General Partner or the Company, as the case may be (or any transaction or series of transactions within a period of twelve months ending on the date of the last sale or disposition having a similar effect), or any transfer of direct or indirect ownership or control of QTS LLC or its assets by the Company.

For the avoidance of doubt, an IPO shall not constitute a Change in Control and no reorganization of the Company or its ownership in contemplation of an IPO shall constitute a Change in Control.

(c) “ Triggering Event ” will be deemed to have occurred if (i) within two (2) years from the date on which the Change in Control occurred, QTS LLC terminates the employment of Executive, other than in the case of a termination for Cause, or (ii) within two (2) years from the date on which the Change in Control occurred, the Executive terminates his employment for Good Reason.

(d) “ Executive’s Annual Bonus ” means, for purposes of Section 4.3.2 , Section 4.3.3 and this Section 4.3.4 , Executive’s annual bonus (i) at the time of the Termination Date for purposes of Section 4.3.2 and Section 4.3.3 , and (ii) with regard to a Triggering Event, the annual bonus in effect on the Termination Date or on the date on which the Change in Control occurred, whichever is higher, calculated on the basis of the target bonus available to Executive and the assumption that all performance goals are satisfied at a 100% achievement level by QTS LLC and Executive in the year in which such Termination without Cause or for Good Reason, Triggering Event or such Change in Control, as the case may be, occurred.

For the avoidance of doubt, in the event of a Change of Control and a Triggering Event under circumstances entitling Executive to payments and benefits under this Section 4.3.4 , such payments and benefits shall be in lieu of payments and benefits under Section 4.3.2 , and Executive shall not be entitled to any compensation or benefits under Section 4.3.2 .

4.3.5 Waiver and Release Agreement . In consideration of the severance payments and other benefits described in Section 4.3.2 , Section 4.3.3 and Section 4.3.4 , to which severance payments and benefits Executive would not otherwise be entitled, and as a precondition to Executive becoming entitled to such severance payments and other benefits under this Agreement, Executive agrees to execute and deliver to QTS LLC on or before the sixtieth (60 ^th ) day after the applicable Termination Date a waiver and general release of claims in favor of the Quality Companies, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, in a form reasonably satisfactory to QTS LLC, that has become effective in accordance with its terms, and for which any revocation periods applicable to such release shall have expired on or prior to the sixtieth (60 ^th ) day following Executive’s Termination Date. If Executive fails to execute and deliver such release agreement on or before the sixtieth (60 ^th ) day following the applicable Termination Date, if any revocation period applicable to such release has not expired on or before the sixtieth (60 ^th ) day following Executive’s Termination Date or if Executive revokes such release as provided therein, QTS LLC shall have no obligation to provide any of the severance payments and other benefits described in Section 4.3.2 , Section 4.3.3 or Section 4.3.4 other than any Accrued Obligations.

amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred and any right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of QTS LLC.

4.5 Non-Exclusivity of Rights . Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the General Partner, Company or QTS LLC, and for which Executive may qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any other contract or agreement with the General Partner, Company or QTS LLC at or subsequent to the Termination Date, which shall be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement.

4.6 No Set-Off or Mitigation . QTS LLC’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any setoff, counterclaim, recoupment, defense, or other claim, right or action that QTS LLC may have against Executive or others, except to the extent of the mitigation and setoff provisions provided for in this Agreement. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment.

4.7 Excise Tax-Related Provisions . The payments and benefits that Executive may be entitled to receive under this Agreement and other payments and benefits that Executive is or may be entitled to receive under other plans, agreements and arrangements (which, together with the benefits provided under this Agreement, are referred to as “ Payments ”), may constitute Parachute Payments (as defined below) that are subject to Sections 280G and 4999 of the Code. As provided in this Section 4.7 , the Parachute Payments will be reduced if, and only to the extent that, a reduction will allow Executive to receive a greater Net After Tax Amount (as defined below) than Executive would receive absent a reduction.

4.7.1 The Accounting Firm (as defined below) will first determine the amount of any Parachute Payments that are payable to the Executive. The Accounting Firm also will determine the Net After Tax Amount attributable to the Executive’s total Parachute Payments.

4.7.2 The Accounting Firm will next determine the largest amount of Payments that may be made to the Executive without subjecting Executive to tax under Section 4999 of the Code (the “ Capped Payments ”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.

4.7.3 Executive will receive the total Parachute Payments or the Capped Payments, whichever provides Executive with the higher Net After Tax Amount. If Executive will receive the Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount of any cash benefits under this Agreement or any other plan, agreement or arrangement (with the source of the reduction to be directed by the Company) and then by reducing the amount of any noncash benefits under this Agreement or any other plan, agreement or arrangement (with the source of the reduction to be directed by the Company). The Accounting Firm will notify Executive and the Company if it determines that the Parachute Payments must be reduced to the Capped Payments and will send Executive and the Company a copy of its detailed calculations supporting that determination.

4.7.4 As a result of the uncertainty in the application of Sections 280G and 4999 of the Code at the time that the Accounting Firm makes its determinations under this Section 4.7 , it is possible that amounts will have been paid or distributed to Executive that should not have been paid or distributed under this Section 4.7 (“ Overpayments ”), or that additional amounts should be paid or distributed to the Executive under this Section 4.7 (“ Underpayments ”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Executive, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Executive must repay to the Company, without interest, the amount of the Overpayment; provided , however , that no amount will be payable by the Executive to the Company unless, and then only to the extent that, the payment would either reduce the amount on which the Executive is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Executive and the Company of that determination and the amount of that Underpayment will be paid to the Executive promptly by the Company.

For purposes of this Section 4.7 , the term “ Accounting Firm ” means the independent accounting firm engaged by the Company immediately before a Change in Control. For purposes of this Section 4.7 , the term “ Net After Tax Amount ” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Sections 1, 3101(b) and 4999 of the Code and any State or local income taxes applicable to Executive on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment. For purposes of this Section 4.7 , the term “ Parachute Payment ” means a payment that is described in Section 280G(b)(2) of the Code, determined in accordance with Section 280G of the Code and the regulations promulgated or proposed thereunder.

ARTICLE 5

RESTRICTIVE COVENANTS

5.1 Confidential Information .

(1) Obligation to Maintain Confidentiality . Executive acknowledges that, by reason of Executive’s employment by the Company and position with the General Partner, Executive will have access to confidential matters relating to the names, addresses, buying habits and other special information regarding past and present customers, as well as potential customers with whom the Company has established material contacts and entered into active negotiations for the sale of products or services, employees and suppliers of the Company; customer contracts and transactions or price lists of the Company; products, services, programs and processes sold, licensed or developed by the Company; technical data, plans and specifications; financial and/or marketing data known only by the Company and respecting the conduct of the present or future phases of business of the Company; computer programs, systems and/or software developed by the Company; ideas, inventions, trademarks, trade secrets, business information, know-how, processes, designs, redesigns, discoveries and developments of the Company; and information considered confidential by any customers or suppliers of the Company (collectively, “ Confidential Information ”) of the Quality Companies. Executive acknowledges that such Confidential Information is a valuable and unique asset of the Quality Companies and covenants that, both during the Term and for a period of one (1) year after the Executive’s Termination Date Executive shall not disclose any Confidential Information to any person, partnership, corporation, limited liability company, or any other entity (“ Person ”) (except as Executive’s duties as a manager, director, officer or employee of the Company or the General Partner require) without the prior written authorization of the Board. Notwithstanding the foregoing, information which (i) at the time of receipt is, or thereafter becomes, publicly known through no wrongful act of Executive, (ii) is received from a third party not under an obligation to keep such information confidential and without breach of this Agreement, or (iii) was developed by Executive independently of and without reference to information obtained from the Company shall not be considered “Confidential Information.” Notwithstanding the foregoing, Executive shall not be restricted from disclosing Confidential Information to the extent required by law, court order, subpoena or other legal proceeding or to his attorneys and advisors in connection with a dispute between Executive and a Quality Company.

(2) Company Property . All records, designs, business plans, financial statements, customer lists, manuals, memoranda, lists, research and development plans, Intellectual Property and other property delivered to or compiled by Executive by or on behalf of any Quality Company or its providers, clients or customers that pertain to the business of any Quality Company shall be and remain the property of such Quality Company and be subject at all times to its discretion and control. Likewise, all correspondence, reports, records, charts, advertising materials and other similar data pertaining to the business, activities, research and development, Intellectual Property or future plans of a Quality Company that is collected by Executive shall be delivered promptly to such Quality Company without request by it upon termination of Executive’s employment for any reason. For purposes of this Section 5.1.2 , “ Intellectual Property ” shall mean patents, copyrights, trademarks, trade dress, trade secrets, other such rights and any applications therefor.

jointly with others during the Term that relate to the business of such Quality Company. This assignment shall include (a) the right to file and prosecute patent applications on such inventions in any and all countries, (b) the patent applications filed and patents issuing thereon, and (c) the right to obtain copyright, trademark or trade name protection for any such work product. Executive shall promptly and fully disclose all such contributions and inventions to the Company and assist the Company or any other Quality Company, as the case may be, in obtaining and protecting the rights therein (including patents thereon), in any and all countries; provided, however, that said contributions and inventions shall be the property of the applicable Quality Company, whether or not patented or registered for copyright, trademark or trade name protection, as the case may be. Notwithstanding the foregoing, no Quality Company shall have any right, title or interest in any work product or copyrightable work developed outside of work hours and without the use of any Quality Company’s resources that does not relate to the business of any Quality Company and does not result from any work performed by Executive for any Quality Company.

5.3 Nondisparagement .

(a) Executive agrees that during the term and after Executive’s termination for Cause or without Good Reason he will not talk about or otherwise communicate to any third parties in a malicious, disparaging or defamatory manner regarding the Company, the General Partner, QTS LLC or any of their respective affiliates, owners or their past or present employees, directors, officers or other representatives and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of the Company, the General Partner, QTS LLC or any of their respective affiliates, owners or their past or present employees, directors, officers or other representatives

(b) The Company, QTS LLC and the General Partner agree that during the term and thereafter they will not talk about or otherwise communicate to any third parties in a malicious, disparaging, or defamatory manner regarding Executive and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of Executive. For purposes of this non-disparagement provision, the Company, QTS LLC and the General Partner are defined to mean the Company’s executive team and the Board.

5.4 Non-Compete . The Executive agrees that for the period during which the Executive is employed by, or serving as an officer or manager or director of, the Company, the General Partner, QTS LLC or any of the Quality Companies and for one (1) year after Executive’s termination (the “ Restricted Period ”), the Executive will not (a) directly or indirectly, engage in any business involving the development, construction, acquisition, ownership or operation of data center properties, colocation facilities and/or the provision of managed services in the United States, whether such business is conducted by the Executive individually or as a principal, partner, member, stockholder, joint venturer, director, trustee, officer, employee, consultant, advisor or independent contractor of any Person (as defined below) or (b) own any interests in any data center facilities, colocation facilities or managed service providers in the United States; provided , however , that this Section 5.4 shall not be deemed to prohibit the direct or indirect ownership by the Executive of up to five (5) percent of the outstanding equity interests of any public company. For purposes of this Agreement, “ Person ” means any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity.

5.5 Non-Solicitation . The Executive agrees that during the Term or otherwise for the period during which the Executive is employed by, or serving as an officer or manager or director of, the Company, the General Partner or any of the Quality Companies, and for one (1) year after Executive’s termination, such Executive will not directly or indirectly (a) solicit, induce or encourage any employee (other than clerical employees) or independent contractor to terminate their employment with the Quality Companies or to cease rendering services to the Quality Companies, and the Executive shall not initiate discussions with any such Person for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other Person, or (b) solicit any customers of the Quality Companies to lease, purchase or otherwise occupy data center space in the United States of America or encourage any of the tenants of the Quality Companies to reduce its patronage of the Quality Companies. Notwithstanding the foregoing, Executive’s solicitation of a former Company employee whose employment has been involuntarily terminated by the Company shall not constitute a solicitation barred under this Agreement. The term “solicit” includes any communication (written or oral) from or initiated by Executive or his agents, or any search or other recruitment entity or person employed by Executive, to any customer, employee or independent contractor of the Company but does not include advertising or press releases in any newspaper, industry publication or other media of general circulation.

5.6 Reasonable and Necessary Restrictions . Executive acknowledges that the restrictions, prohibitions and other provisions hereof, including, without limitation, the Restricted Period set forth in Section 5.4 , are reasonable, fair and equitable in terms of duration, scope and geographic area, as are necessary to protect the legitimate business interests of the Quality Companies, and are a material inducement to the Company, the General Partner and QTS LLC to enter into this Agreement.

5.7 Breach of Restrictive Covenants . The parties agree that a breach or violation of any provision of this Article 5 will result in immediate and irreparable injury and harm to the business of the Quality Companies, and that the Company, the General Partner, QTS LLC and each other Quality Company shall have, in addition to any and all remedies of law and other consequences under this Agreement, the right to seek an injunction, specific performance or other equitable relief to prevent the violation of the obligations hereunder, including without limitation, to address any threatened breach or violation, and to enjoin and restrain Executive and each and every person, firm, company or corporation concerned therewith, from the violation or continuance of such violation or breach. In addition thereto, Executive shall be responsible for all damages, including reasonable attorneys’ fees, sustained by the Company, the General Partner, QTS LLC and any other Quality Company by reason of said violation. In addition to any other remedy which may be available at law or in equity, or pursuant to any other provision of this Agreement, the payments by QTS LLC of any severance to which Executive may otherwise be entitled under this Agreement will cease as of the date on which such violation first occurs.

ARTICLE 6

GOVERNING LAW, DISPUTE RESOLUTION

6.1 Governing Law . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF KANSAS APPLICABLE TO AGREEMENTS MADE AND TO BE WHOLLY PERFORMED WITHIN THAT STATE, WITHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS OR THE CONFLICT OF LAWS PROVISIONS OF ANY OTHER JURISDICTION WHICH WOULD CAUSE THE APPLICATION OF ANY LAW OTHER THAN THAT OF THE STATE OF KANSAS.

6.2 Waiver of Jury Trial . Each party hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect to any litigation, directly or indirectly, arising out of or relating to this Agreement or any transaction contemplated hereby. Each party (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 6.2 .

ARTICLE 7

MISCELLANEOUS

7.1 Amendments . The provisions of this Agreement may not be waived, altered, amended or repealed in whole or in part except by the signed written consent of the parties sought to be bound by such waiver, alteration, amendment or repeal.

7.2 Entire Agreement . This Agreement constitutes the total and complete agreement of the parties with respect to the subject matter hereof and thereof and supersedes all prior and contemporaneous understandings and agreements heretofore made, and there are no other representations, understandings or agreements.

7.3 Counterparts . This Agreement may be executed in one of more counterparts, each of which shall be deemed and original, but all of which shall together constitute one and the same instrument.

7.4 Severability . Each term, covenant, condition or provision of this Agreement shall be viewed as separate and distinct, and in the event that any such term, covenant, condition or provision shall be deemed by an arbitrator or a court of competent jurisdiction to be invalid or unenforceable, the court or arbitrator finding such invalidity or unenforceability shall modify or reform this Agreement to give as much effect as possible to the terms and provisions of this Agreement. Any term or provision which cannot be so modified or reformed shall be deleted and the remaining terms and provisions shall continue in full force and effect.

7.5 Waiver or Delay . The failure or delay on the part of the Company, the General Partner, QTS LLC or any Quality Company or Executive to exercise any right or remedy, power

or privilege hereunder shall not operate as a waiver thereof, except as explicitly set forth herein. A waiver, to be effective, must be in writing and signed by the party making the waiver. A written waiver of default shall not operate as a waiver of any other default or of the same type of default on a future occasion.

7.6 Successors and Assigns . This Agreement shall be binding on and shall inure to the benefit of the parties to it and their respective heirs, legal representatives, successors and assigns, except as otherwise provided herein. Neither this Agreement nor any of the rights, benefits, obligations or duties hereunder may be assigned or transferred by Executive except by operation of law. The Company, the General Partner and QTS LLC may assign this Agreement or their respective obligations under this Agreement to any affiliate or successor, provided, however, that (1) the Company, the General Partner and QTS LLC shall remain liable for the obligations to Executive under this Agreement and (2) the Company, the General Partner and QTS LLC shall require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, the General Partner or QTS LLC to assume expressly and agree, and the Company shall cause any successor general partner of the Company to assume expressly and agree, to perform this Agreement in the same manner and to the same extent that the Company, the General Partner or QTS LLC, as applicable, would be required to perform if no such succession had taken place.

7.7 Necessary Acts . Each party to this Agreement shall perform any further acts and execute and deliver any additional agreements, assignments or documents that may be reasonably necessary to carry out the provisions or to effectuate the purpose of this Agreement.

7.8 Notices . All notices, requests, demands and other communications to be given under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service, if personally served on the party to whom notice is to be given, or 48 hours after mailing, if mailed to the party to whom notice is to be given by certified or registered mail, return receipt requested, postage prepaid, and properly addressed to the party at his address set forth as follows or any other address that any party may designate by written notice to the other parties:


To Executive:		Chad L. Williams Address on file with the Company

To the Company, the General Partner or QTS LLC:		c/o QualityTech GP, LLC 12851 Foster Street, Suite 205 Overland Park, Kansas 66213 Attention: General Counsel Facsimile: (913) 814-7766

7.9 Headings and Captions . The headings and captions used herein are solely for the purpose of reference only and are not to be considered as construing or interpreting the provisions of this Agreement.

7.10 Construction . All terms and definitions contained herein shall be construed in such a manner that shall give effect to the fullest extent possible to the express or implied intent of the parties hereby.

7.11 Counsel . Executive has been advised by the Company, the General Partner and QTS LLC that he should consider seeking the advice of counsel in connection with the execution of this Agreement and the other agreements contemplated hereby and Executive has had an opportunity to do so. Executive has read and understands this Agreement and has sought the advice of counsel to the extent he has determined appropriate.

7.12 Withholding of Compensation . Executive hereby agrees that QTS LLC may deduct and withhold from the compensation or other amounts payable to Executive hereunder or otherwise in connection with Executive’s employment any amounts required to be deducted and withheld by QTS LLC under the provisions of any applicable Federal, state and local statute, law, regulation, ordinance or order.

7.13 Executive Representation . Executive acknowledges that by entering into or complying with any provision of this Agreement he is not breaching or acting in contravention of any other agreement or commitment he has to any other firm, corporation, partnership, organization, person or any other individual or entity.

7.14 D & O Insurance . The Company, the General Partner and/or QTS LLC will maintain directors’ and officers’ liability insurance during the Term and for a period of not less than six (6) years thereafter, covering acts and omissions of Executive during the Term, on terms substantially no less favorable than those in effect on the date of this Agreement. During the Term and for a period of not less than six (6) years thereafter, Executive shall receive the same benefits provided to any of the Company’s, General Partner’s or QTS LLC’s officers and directors under any additional D&O insurance or similar policy, any indemnification agreement, Company, General Partner or QTS LLC policies or the articles of organization or bylaws of the Company, the General Partner or QTS LLC as in effect as of the date hereof, provided , however , that in the event that the benefits provided to any of the Company’s, General Partner’s and QTS LLC officers and directors under any of the foregoing documents or policies are enlarged after the date hereof, Executive shall receive such enlarged benefits.

7.15 Legal Fees . QTS LLC shall reimburse Executive for all reasonable legal fees incurred by Executive in connection with the negotiation, preparation and execution of this Agreement.

hereby consent to the jurisdiction of any or all of the following courts: (i) the United States District Court for the State of Kansas, (ii) any of the courts of the State of Kansas, or (iii) any other court having jurisdiction. Company, General Partner, QTS LLC and Executive further agree that any service of process or notice requirements in any such proceeding shall be satisfied if the rules of such court relating thereto have been substantially satisfied. Company, General Partner, QTS LLC and Executive hereby waive, to the fullest extent permitted by applicable law, any objection which it or he may now or hereafter have to such jurisdiction and any defense of inconvenient forum. Company, General Partner, QTS LLC and Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party shall bear its or his costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 7.16 ; provided , however , that the party that substantially prevails in an arbitration shall be reimbursed by the other party for all reasonable costs, including reasonable attorneys’ fees and costs, incurred by such prevailing party in connection with the arbitration. Notwithstanding any provision in this Section 7.16 , Executive shall be paid all compensation due and owing under this Agreement during the pendency of any dispute or controversy arising under or in connection with this Agreement.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.


COMPANY

QUALITYTECH, LP

By:	QUALITYTECH GP, LLC,
	its sole general partner

	By:	/s/ Shirley E. Goza
		Name:	Shirley E. Goza
		Title:	Vice President, General Counsel & Secretary

GENERAL PARTNER

QUALITYTECH GP, LLC

By:	/s/ Shirley E. Goza
Name:	Shirley E. Goza
Title:	Vice President, General Counsel & Secretary

QTS LLC

QUALITY TECHNOLOGY SERVICES, LLC

By:	/s/ Shirley E. Goza
Name:	Shirley E. Goza
Title:	Vice President, General Counsel & Secretary

EXECUTIVE

/s/ Chad L. Williams
CHAD L. WILLIAMS

Exhibit 10.5

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

(William H. Schafer)

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “ Agreement ”) is made as of August 14, 2013 (“ Effective Date ”), by and among QualityTech, LP, a Delaware limited partnership (the “ Company ”), QualityTech GP, LLC, a Delaware limited liability company and general partner of the Company (together with any successor general partner of the Company, the “ General Partner ”), Quality Technology Services, LLC, a Delaware limited liability company and an affiliate of the Company (“ QTS LLC ”), and William H. Schafer, an individual (“ Executive ”), with respect to the following facts and circumstances:

RECITALS

WHEREAS, the parties hereto are parties to that certain Employment Agreement dated February 16, 2010 (the “ Original Agreement ”) pursuant to which the Company employed Executive as its Chief Financial Officer (“ CFO ”), and the GP appointed Executive as its CFO, and Executive accepted such employment and appointment; and

WEHEREAS, the parties now wish to amend and restate the Original Agreement on the terms set forth herein, and this Agreement shall supersede and replace the Original Agreement in its entirety, which hereby is terminated and shall be of no further force or effect.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE 1

EMPLOYMENT, TERM AND DUTIES

1.1 Employment and Positions . During the Term (defined below), QTS LLC shall employ Executive as the Chief Financial Officer (“ CFO ”) of the Company, upon the terms and conditions set forth in this Agreement, and Executive shall report directly to the Chief Executive Officer of the Company, unless otherwise determined by the Board of Managers (or Board of Directors or other comparable governing body, as applicable) of the General Partner (the “ Board ”). In addition, during the Term, Executive shall serve as the CFO of the General Partner and shall report to the Chief Executive Officer of the General Partner (the “ GP CEO ”), unless determined otherwise by the Board.

1.2 Term . The period of employment of the Executive by the Company shall, subject to earlier termination as provided in this Agreement, commence upon the date hereof (the “Effective Date” ) and continue until March 31, 2016 (the “ Term ”); provided , that the Term shall automatically renew for additional one (1)-year periods thereafter unless either QTS LLC or Executive gives notice of non-renewal at least ninety (90) days prior to expiration of the Term (as it may have been extended by any renewal period).

1.3 Duties . During the Term, Executive shall (a) perform all duties and obligations reasonably associated with the position of CFO of the General Partner and the Company, consistent with the Bylaws or other governing documents of the Company and the General Partner, as applicable, as in effect from time to time, and (b) perform such other duties reasonably associated with a senior executive officer of the business of the Company, the General Partner, QTS LLC and their subsidiaries and affiliates (the “ Quality Companies ”), including duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the Board (including the performance of services for the board of directors or a comparable governing body of, any member of the Quality Companies without any additional compensation), subject, in all cases described in clauses (a) and (b), to the supervision and direction of the Chief Executive Officer of the Company or the GP CEO, as applicable, and the Board. Executive shall devote substantially all of his business time and effort to the performance of Executive’s duties hereunder and to the affairs of the Quality Companies; provided, that in no event shall this provision prohibit Executive from (i) performing social, civic, charitable and religious activities, (ii) managing personal investments and affairs, (iii) participating in educational or professional associations, or (iv) any other activities approved by the Board, so long as the activities set forth in clauses (i) through (iv) above do not materially and adversely interfere with Executive’s duties and obligations hereunder or to the business affairs of the Quality Companies.

ARTICLE 2

COMPENSATION

2.1 Salary . In consideration for Executive’s services hereunder, QTS LLC shall pay Executive an annual salary at the rate of not less than $350,000 per year during each of the years of the Term, payable in accordance with QTS LLC’s regular payroll schedule from time to time (less any deductions required for Social Security, state, federal and local withholding taxes, and any other authorized or mandated similar withholdings). The annual salary shall be reviewed by the Compensation Committee of the Board (the “ Compensation Committee ”), or, if there is none, the Board, no less frequently than annually. Executive’s salary may be adjusted upward upon annual review, but shall not be decreased.

2.2 Bonus . In addition to an annual base salary, if the Executive achieves certain corporate and individual objectives as established by the Compensation Committee, or if there is none, the Board, then QTS LLC shall pay to the Executive bonus compensation, not later than 75 days following the end of the fiscal year. QTS LLC’s award of bonus compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of his duties hereunder, that may be established from time to time for the calculation of bonus awards by the Compensation Committee, or, if there is none, the Board, which shall be established and communicated to Executive in writing no later than sixty (60) days following the beginning of the applicable fiscal year. Annual bonuses will be targeted at 100% of annual salary with 100% of annual salary paid for threshold performance and additional amounts paid for exceptional performance as determined by the Compensation Committee, if there is one, and approved by the Board. The Board may award discretionary bonuses in addition to performance bonuses.

2.3 Equity Award . Executive previously has received an award of 100,000 Class O LTIP Units in QualityTech Employee Pool, LLC and 75,000 Class RS LTIP Units in QualityTech Employee Pool, LLC (the “ Equity Awards ”). The Equity Awards generally are subject to a four (4)-year vesting schedule and will become 100% vested upon either the occurrence of a “Change of Control” as defined in the QualityTech, LP 2010 Equity Incentive Plan (together with any successor plan thereto, the “ Plan ”) or as otherwise provided in this Agreement. The Equity Awards are in the form of partnership “profits interest” units and, accordingly, required Executive to complete a form Section 83(b) election. Additional equity awards may be made pursuant to the Plan in accordance with the Company’s policies and as deemed appropriate by the Compensation Committee.

ARTICLE 3

EXECUTIVE BENEFITS

3.1 Vacation . Executive shall be entitled to four (4) weeks paid vacation each calendar year of the Term in accordance with the general policies of the Company and QTS LLC applicable to other senior executives of the Company, the General Partner and QTS LLC. Unused vacation shall carry over, if at all, in accordance with the general policies of the Company, the General Partner and QTS LLC as the same shall be in effect from time to time.

3.3 Reimbursement for Expenses . Executive shall be reimbursed for all documented reasonable expenses incurred by Executive in the performance of his duties set forth in Section 1.3 in furtherance of the business of the Quality Companies in accordance with the reimbursement policies in effect from time to time. Any reimbursement under this Section 3.3 that is taxable to Executive shall be made by December 31 of the calendar year following the calendar year in which Executive incurred the expense.

3.4 Corporate Membership . Executive will have access to a corporate country club membership and QTS LLC will pay for all dues and assessments associated with such membership.

3.5 Supplemental Disability . QTS LLC will reimburse Executive for existing annual supplemental disability premiums which currently approximate $10,000.00.

ARTICLE 4.

TERMINATION

4.1 Grounds for Termination .

4.1.1 Death or Disability . Executive’s employment with QTS LLC pursuant to this Agreement shall terminate immediately in the event of Executive’s death or Disability. “ Disability ” means any: (i) physical disability or impairment, (ii) mental disability or impairment, (iii) illness or (iv) injury, that, in the good faith judgment of the Board, prevents or would prevent Executive from performing his duties and obligations under this Agreement or participating effectively and actively in the management of the business of the Quality Companies for more than three consecutive months or for more than 90 days in any 180-day period.

(a)

any willful act or omission by Executive, other than as a result of Executive’s Disability, that causes material harm and represents (i) a material breach of any of the terms of this Agreement or (ii) any breach of Article 5 of this Agreement;

(b)

Executive’s conviction of, or pleading guilty or nolo contendere to, a crime that constitutes a felony or a misdemeanor involving dishonesty or moral turpitude;

(c)

Executive’s willful and material violation of the written rules, regulations, procedures, or policies relating to the conduct of employees, directors or officers of any member of the Quality Companies that cause material harm;

(d)

any commission by Executive of an act of dishonesty, theft, fraud, embezzlement or material misappropriation of property of any of the Quality Companies; or

(e)

any act by Executive that will or is reasonably expected to have, a significant adverse effect on the business or reputation of any member of the Quality Companies unless such act was taken with the good faith belief that it was in the best interest of any member of the Quality Companies.

Except as provided in Section 4.1.1 of this Agreement, any termination of Executive by QTS LLC for any reason, including without limitation, a termination for alleged failures of performance or a termination in connection with a nonrenewal of this Agreement, shall be deemed a termination without Cause, unless it is established that the reason for the termination was the occurrence of an event constituting Cause.

It shall be a condition precedent to QTS LLC’s right to terminate Executive’s employment for Cause that Cause be established as follows: (i) QTS LLC shall have

first given Executive written notice stating with reasonable specificity the act(s) on which such termination is premised within twenty (20) days after the party providing such notice becomes aware or reasonably should have become aware of such act, and (ii) at least two-thirds of the members of the Board find that the act alleged to be Cause constitutes Cause and has not been cured or remedied within thirty (30) days after receipt of such notice, and provided, such act is of such a nature that it cannot with due diligence be cured within the time required, Executive shall not have commenced, or shall not thereafter diligently prosecute to completion, all steps necessary to cure such act alleged to be Cause within a reasonable period of time.

(a)

a material diminution in Executive’s authority, duties or responsibilities, or any significant adverse change in Executive’s title as CFO of the Company, the General Partner and QTS LLC;

(b)

Executive’s place of employment is moved more than fifty (50) miles from the Company’s current location in Overland Park, Kansas;

(c)

a material diminution in Executive’s base compensation, as in effect from time to time; or

(d)

a material breach by QTS LLC or the General Partner of any term of this Agreement.

4.1.4 Any Other Reason . Notwithstanding anything to the contrary herein, QTS LLC shall have the right to terminate Executive’s employment under this Agreement at any time without Cause by giving written notice of such termination to Executive, and Executive shall have the right to terminate Executive’s employment under this Agreement at any time without Good Reason by giving written notice of such termination to QTS LLC. Any notice by Executive hereunder shall be given at least sixty (60) days in advance of such termination. Any notice by QTS LLC shall be given at least ninety (90) days in advance of such termination.

4.3 Effect of Termination .

4.3.1 Termination with Cause or without Good Reason . In the event that Executive’s employment is terminated by QTS LLC with Cause or by Executive without Good Reason, QTS LLC shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by applicable law. “ Accrued Obligations ” means the sum of (a) Executive’s salary hereunder through the Termination Date to the extent not theretofore paid; (b) the amount of any accrued but unused vacation pay; (c) any business expense reimbursements incurred by Executive as of the Termination Date and submitted for reimbursement, in each case, consistent with the policy for such reimbursements, within ten (10) days following the Termination Date; and (d) any performance bonus or discretionary bonus under Section 2.2 that has been earned or declared for a bonus period ending before the Termination Date but not paid before the Termination Date.

4.3.2 Termination without Cause, with Good Reason or at Death or Disability . In the event that Executive’s employment is terminated by QTS LLC without Cause, by Executive for Good Reason, or on death or disability:

(a)

QTS LLC shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law;

(b)

Solely in the case of a termination for death or disability, if not previously vested in full, the Equity Awards and any other equity awards granted to Executive shall fully vest as of the Termination Date;

(c)

Solely in the case of a termination by QTS LLC without Cause or by Executive for Good Reason, if not previously vested in full, the Equity Awards and any other equity awards granted to Executive that otherwise would vest during the then-current term of this Agreement (whether the initial term or any renewal term) shall fully vest as of the Termination Date;

(d)

QTS LLC shall pay to Executive, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date, an amount equal to one (1) times Executive’s annual salary as in effect on the Termination Date;

(e)

QTS LLC shall pay to Executive, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date, a prorated bonus for the year in which the termination occurs determined by multiplying the target bonus for such year by the quotient of the number of calendar days of employment during the year of termination divided by 365;

(f)

QTS LLC shall pay to Executive, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date, an amount equal to one (1) times Executive’s Annual Bonus (as defined below) for the year in which the termination occurs; and

(g)

QTS LLC shall provide Executive with continuing coverage under its health benefit plans for the one (1) year period following the Termination Date. If Executive elects COBRA coverage, at the end of such year, QTS LLC shall reimburse Executive for his premiums for such coverage. If the QTS LLC is not able to provide continuing coverage of Executive under its health benefit plans, other than via COBRA coverage, then in addition to paying the premiums during the COBRA period, the Company shall pay Executive an additional amount equal to the cost of substantially similar coverage for himself and his family for one (1) year of coverage. Any reimbursement under this Section 4.3.2(f) that is taxable to Executive or any of his Family Members shall be made (subject to the provisions of such health care plans that may require earlier payment) by December 31 of the calendar year following the calendar year in which Executive or such Family Member incurred the expense. For purposes of this Agreement, “ Family Members ” shall include Executive’s immediate family and any parent, brother or sister.

4.3.3 Termination upon Change in Control . In the event that Executive’s employment is terminated following a Change in Control, the following provisions shall apply:

(a)

Upon the occurrence of a Triggering Event:

(1) QTS LLC shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law;

(2) QTS LLC shall pay to Executive a lump sum severance benefit in cash on the first payroll date following sixty (60) days after the Termination Date, which will be in addition to any other compensation or remuneration to which Executive is or becomes entitled to receive from QTS LLC, in an amount equal to the sum of (i) two (2) times Executive’s Annual Bonus (as defined below) plus (ii) two (2) times Executive’s annual salary as in effect on the date of the Triggering Event or on the date on which the Change in Control occurs, whichever is higher;

(3) QTS LLC shall pay or reimburse the cost of health, disability and accidental death, and dismemberment insurance in an amount not less than that provided at the time of the Triggering Event or, if greater, on the date on which the Change in Control occurred, until the earlier of (x)

in the event that Executive shall become employed by another employer after a Triggering Event, the date on which Executive shall be eligible to receive benefits from such employer which are substantially equivalent to or greater than the benefits Executive and Executive’s family received from Company or (y) the second anniversary of the date of the Triggering Event. Any reimbursement under this Section 4.3.3(a)(2) that is taxable to Executive or any of his Family Members shall be made (subject to the provisions of such health care plans that may require earlier payment) by December 31 of the calendar year following the calendar year in which Executive or such Family Member incurred the expense; and

(4) QTS LLC shall provide Executive, at QTS LLC’s expense, with outplacement services and support, the scope and provider of which will be selected by Executive, for a period of one (1) year following the date of the Triggering Event.

(b)

“ Change in Control ” means:

(1) Prior to any initial public offering of securities of the General Partner (“ IPO ”), (i) any transaction or series of transactions pursuant to which ownership of at least a majority of the combined voting power of the Company’s outstanding voting securities as of the Effective Date is transferred (through merger, transfer of units or other similar transaction) to persons or entities other than the persons or entities (“ Incumbent Partners ”) who were partners of the Company as of the Effective Date, or (ii) any transfer of direct or indirect ownership or control of QTS LLC or its assets by the Company, and

(2) Following an IPO, Change of Control means:

A. Any “person” as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) (other than the General Partner or the Company, any Incumbent Partner, any trustee or other fiduciary holding securities under any employee benefit plan of the General Partner, the Company or QTS LLC or any corporation or other entity owned, directly or indirectly, by the partners of the Company in substantially the same proportion as their ownership of interests in the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the General Partner or the Company representing 30% or more of the then combined voting power of the then outstanding voting securities of the General Partner or the Company, as the case may be;

B. During any period of twelve (12) consecutive months, individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who

has entered into an agreement with the General Partner or the Company to effect a transaction described in clause (A), (C) or (D) hereof) whose election by the Board or nomination for election by the General Partner’s equityholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or actual threatened solicitation of proxies or consents by or on behalf of a person other than the Board, cease for any reason to constitute at least a majority of the Board;

C. The equityholders of the General Partner or the Partners of the Company approve a merger or consolidation of the General Partner or the Company with any other entity or approve the issuance of voting securities in connection with a merger or consolidation of the General Partner or the Company (or any direct or indirect subsidiary thereof) pursuant to applicable exchange requirements, other than (A) a merger or consolidation which would result in (x) the voting securities of the General Partner outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) more than 70% of the combined voting power of the voting securities of the General Partner or such surviving or parent entity outstanding immediately after such merger or consolidation and (y) the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) more than 70% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the General Partner or the Company (or similar transaction) in which no “person” (as defined above) is or becomes the beneficial owner, directly or indirectly, of securities of the General Partner or the Company representing 30% or more of the then combined voting power of the General Partner’s or the Company’s, as the case may be, then outstanding voting securities; or

For the avoidance of doubt, an IPO shall not constitute a Change in Control and no reorganization of the Company or its ownership in contemplation of an IPO shall constitute a Change in Control.

(d) “ Executive’s Annual Bonus ” means, for purposes of Section 4.3.2 and this Section 4.3.3 , Executive’s annual bonus (i) at the time of the Termination Date for purposes of Section 4.3.2, calculated on the basis of the target bonus available to Executive and the assumption that all performance goals are satisfied at the target achievement level by QTS LLC and Executive in the year in which such Termination without Cause or for Good Reason occurred, and (ii) with regard to a Triggering Event, the annual bonus in effect on the Termination Date or on the date on which the Change in Control occurred, whichever is higher, calculated on the basis of the maximum bonus available to Executive and the assumption that all performance goals are satisfied at a 100% achievement level by QTS LLC and Executive in the year in which such Triggering Event or such Change in Control, as the case may be, occurred.

For the avoidance of doubt, in the event of a Change of Control and a Triggering Event under circumstances entitling Executive to payments and benefits under this Section 4.3.3 , such payments and benefits shall be in lieu of payments and benefits under Section 4.3.2 , and Executive shall not be entitled to any compensation or benefits under Section 4.3.2 .

4.3.4 Waiver and Release Agreement . In consideration of the severance payments and other benefits described in Section 4.3.2 and Section 4.3.3 , to which severance payments and benefits Executive would not otherwise be entitled, and as a precondition to Executive becoming entitled to such severance payments and other benefits under this Agreement, Executive agrees to execute and deliver to QTS LLC on or before the sixtieth (60 ^th ) day after the applicable Termination Date a waiver and general release of claims in favor of the Quality Companies, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, in a form reasonably satisfactory to QTS LLC, that has become effective in accordance with its terms, and for which any revocation periods applicable to such release shall have expired on or prior to the sixtieth (60 ^th ) day following Executive’s Termination Date. If Executive fails to execute and deliver such release agreement on or before the sixtieth (60 ^th ) day following the applicable Termination Date, if any revocation period applicable to such release has not expired on or before the sixtieth (60 ^th ) day following Executive’s Termination Date or if Executive revokes such release as provided therein, QTS LLC shall have no obligation to provide any of the severance payments and other benefits described in Section 4.3.2 or Section 4.3.3 other than any Accrued Obligations.

4.4 Required Delay For Certain Deferred Compensation and Section 409A. In the event that any compensation with respect to Executive’s termination is “deferred compensation” within the meaning of Section 409A of the Code and the regulations promulgated thereunder (“ Section 409A ”), and Executive is determined to be a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code, payment of such compensation shall be delayed as required by Section 409A. Such delay shall last six (6) months from the date of Executive’s termination, except in the event of Executive’s death. Within twenty (20) business days following the end of such six (6)-month period, or, if earlier, Executive’s death, QTS LLC shall make a catch-up payment to Executive equal to the total amount of such payments that would have been made during the six (6)-month period but for this Section 4.4 . Such catch-up payment shall bear simple interest at the prime rate of interest as published by the Wall Street Journal’s bank survey as of the first day of the six (6)-month period, which such interest shall be paid with the catch-up payment. Wherever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A. The Executive will be deemed to have a Termination Date for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A. Any amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred and any right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of QTS LLC.

4.5 Non-Exclusivity of Rights . Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or QTS LLC, and for which Executive may qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any other contract or agreement with the Company or QTS LLC at or subsequent to the Termination Date, which shall be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement.

ARTICLE 5

RESTRICTIVE COVENANTS

5.1 Confidential Information .

5.1.1 Obligation to Maintain Confidentiality . Executive acknowledges that, by reason of Executive’s employment by QTS LLC and position with the Company and the General Partner, Executive will have access to confidential matters relating to the business, assets and operations (collectively, “ Confidential Information ”) of the Quality Companies. Executive acknowledges that such Confidential Information is a valuable and unique asset of the Quality Companies and covenants that, both during and after the Term, Executive shall not disclose any Confidential Information to any person, partnership, corporation, limited liability company, or any other entity (each, a “ Person ”) (except as Executive’s duties as a manager, director, officer or employee of the Company or the General Partner require) without the prior written authorization of the Board. Notwithstanding the foregoing, information which (i) at the time of receipt is, or thereafter becomes, publicly known through no wrongful act of Executive, (ii) is received from a third party not under an obligation to keep such information confidential and without breach of this Agreement, or (iii) was developed by Executive independently of and without reference to information obtained from the Company shall not be considered “Confidential Information.” Notwithstanding the foregoing, Executive shall not be restricted from disclosing Confidential Information to the extent required by law, court order, subpoena or other legal proceeding or to his attorneys and advisors in connection with a dispute between Executive and a Quality Company.

pertaining to the business, activities, research and development, Intellectual Property or future plans of a Quality Company that is collected by Executive shall be delivered promptly to such Quality Company without request by it upon termination of Executive’s employment for any reason. For purposes of this Section 5.1.2 , “ Intellectual Property ” shall mean patents, copyrights, trademarks, trade dress, trade secrets, other such rights and any applications therefor.

5.2 Inventions . Executive is hereby retained in a capacity such that Executive’s responsibilities may include the making of technical and managerial contributions of value to the Quality Companies. Executive hereby assigns to the applicable Quality Company all rights, title and interest in such contributions and inventions made or conceived by Executive alone or jointly with others during the Term that relate to the business of such Quality Company. This assignment shall include (a) the right to file and prosecute patent applications on such inventions in any and all countries, (b) the patent applications filed and patents issuing thereon, and (c) the right to obtain copyright, trademark or trade name protection for any such work product. Executive shall promptly and fully disclose all such contributions and inventions to the Company and assist the Company or any other Quality Company, as the case may be, in obtaining and protecting the rights therein (including patents thereon), in any and all countries; provided, however, that said contributions and inventions shall be the property of the applicable Quality Company, whether or not patented or registered for copyright, trademark or trade name protection, as the case may be. Notwithstanding the foregoing, no Quality Company shall have any right, title or interest in any work product or copyrightable work developed outside of work hours and without the use of any Quality Company’s resources that does not relate to the business of any Quality Company and does not result from any work performed by Executive for any Quality Company.

5.3 Nondisparagement .

(a) Executive agrees that he will not talk about or otherwise communicate to any third parties in a malicious, disparaging or defamatory manner regarding the Company, the General Partner, QTS LLC or any of their respective affiliates, owners or their past or present employees, directors, officers or other representatives and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of the Company, the General Partner, QTS LLC or any of their respective affiliates, owners or their past or present employees, directors, officers or other representatives

(b) The Company and the General Partner agree that they will not talk about or otherwise communicate to any third parties in a malicious, disparaging, or defamatory manner regarding Executive and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of Executive. For purposes of this non-disparagement provision, the Company and the General Partner are defined to mean the Company’s executive team and the Board.

5.4 Non-Compete . The Executive acknowledges the Quality Companies’ reliance and expectation of the Executive’s continued commitment to performance of the Executive’s duties and responsibilities during the term of this Agreement. In light of such reliance and expectation on the part of the Quality Companies, during the term of this Agreement and for a period of one (1) year thereafter (and, as to subparagraph (b), at any time during and after the term of this Agreement), the Executive shall not, directly or indirectly do or suffer either of the following:

(a) Own, manage, control or participate in the ownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor or otherwise with, any other company, corporation, partnership, proprietorship, firm, association or other business entity engaged in the business of, or otherwise engage in the business of, acquiring, owning, developing or managing data centers or colocation facilities and/or the provision of cloud or managed services; provided , however , that the ownership of not more than five percent (5%) of any class of publicly traded securities of any entity shall not be deemed a violation of this covenant; or

(b) disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Quality Companies, any confidential information relating to the Quality Companies’ operations, properties or otherwise to the particular business or other trade secrets of the Quality Companies, it being acknowledged by the Executive that all such information regarding the business of the Quality Companies compiled or obtained by, or furnished to, the Executive while the Executive shall have been employed by the Quality Companies is confidential information and the Quality Companies’ exclusive property; provided , however , that the foregoing restrictions shall not apply to the extent that such information (A) is clearly obtainable in the public domain, (B) becomes obtainable in the public domain, except by reason of the breach by the Executive of the terms hereof, (C) was not acquired by the Executive in connection with the Executive’s employment or affiliation with the Quality Companies, (D) was not acquired by the Executive from the Quality Companies or their representatives or (E) is required to be disclosed by rule of law or by order of a court or governmental body or agency.

5.5 Non-Solicitation . The Executive will not directly or indirectly during the term of this Agreement and for a period of one (1) year after the expiration of this Agreement or the termination of Executive’s employment for any reason, (a) solicit or induce or attempt to solicit or induce any employee(s) of the Company and/or any subsidiary, affiliated or related companies to terminate their employment with the Company and/or any subsidiary, affiliated or related companies, (b) solicit, recruit, induce for employment or hire (on behalf of the Executive or any other person or entity) any employee (other than clerical employees) or independent contractor who has left the employment or other service of the Quality Companies (or any predecessor thereof) within one (1) year of the termination of such employee’s or independent contractor’s employment or other service with the Quality Companies or (c) solicit any of tenants of the Quality Companies to lease, purchase or otherwise occupy data center space in the United States of America or encourage any of the tenants of the Quality Companies to reduce its patronage of Quality.

5.6 Cooperation . At all times during Executive’s employment and after the date of Executive’s termination of employment, Executive agrees to reasonably cooperate (i) with the Company, the General Partner and QTS LLC in the defense of any legal matter involving any matter that arose during Executive’s employment in the business of the Company, the General Partner and QTS LLC, and (ii) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding pertaining to the business of the Company, the General Partner or QTS LLC. The Company, the General Partner or QTS LLC, as applicable, will reimburse Executive for reasonable travel and out of pocket expenses incurred by Executive in providing such cooperation.

5.7 Reasonableness of Restrictions; Blue-Penciling . Executive has carefully read and considered the provisions of Article 5 of this Agreement, and, having done so, agrees that the restrictions set forth in such paragraphs are fair and reasonable and reasonably required for the protection of the interests of the business of the Quality Companies. If any of the provisions of Article 5 shall be held to be invalid or unenforceable, the remaining provisions thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included therein. If any provision of Article 5 relating to time periods or areas of restriction shall be declared by a court of competent jurisdiction to exceed the maximum time period or areas such court deems reasonable and enforceable, said time periods and/or areas of restriction shall be deemed to become and thereafter be the maximum time period and/or areas which such court deems reasonable and enforceable.

5.8 Breach of Restrictive Covenants . The parties agree that a breach or violation of any provision of this Article 5 will result in immediate and irreparable injury and harm to the business of the Quality Companies, and that the Company, the General Partner, QTS LLC and each other Quality Company shall have, in addition to any and all remedies of law and other consequences under this Agreement, the right to seek an injunction, specific performance or other equitable relief to prevent the violation of the obligations hereunder, including without limitation, to address any threatened breach or violation, and to enjoin and restrain Executive and each and every person, firm, company or corporation concerned therewith, from the violation or continuance of such violation or breach. In addition thereto, Executive shall be responsible for all damages, including reasonable attorneys’ fees, sustained by the Company, the General Partner, QTS LLC and any other Quality Company by reason of said violation. In addition to any other remedy which may be available at law or in equity, or pursuant to any other provision of this Agreement, the payments by QTS LLC of any severance to which Executive may otherwise be entitled under this Agreement will cease as of the date on which such violation first occurs.

ARTICLE 6

GOVERNING LAW, DISPUTE RESOLUTION

seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 6.2 .

ARTICLE 7

MISCELLANEOUS

7.3 Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed and original, but all of which shall together constitute one and the same instrument.

7.5 Waiver or Delay . The failure or delay on the part of the Company, the General Partner, QTS LLC or any Quality Company or Executive to exercise any right or remedy, power or privilege hereunder shall not operate as a waiver thereof, except as explicitly set forth herein. A waiver, to be effective, must be in writing and signed by the party making the waiver. A written waiver of default shall not operate as a waiver of any other default or of the same type of default on a future occasion.

7.6 Successors and Assigns . This Agreement shall be binding on and shall inure to the benefit of the parties to it and their respective heirs, legal representatives, successors and assigns, except as otherwise provided herein. Neither this Agreement nor any of the rights, benefits, obligations or duties hereunder may be assigned or transferred by Executive except by operation of law. The Company, the General Partner and QTS LLC may assign this Agreement or their respective obligations under this Agreement to any affiliate or successor. The Company, the General Partner and QTS LLC shall require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, the General Partner or QTS LLC to assume expressly and agree, and the Company shall cause any successor general partner of the Company to assume expressly and agree, to perform this Agreement in the same manner and to the same extent that the Company, the General Partner or QTS LLC, as applicable, would be required to perform if no such succession had taken place.


To Executive:		Bill Schafer
		Address on file with the Company

To the Company, the General Partner or QTS LLC:		c/o QualityTech GP, LLC 12851 Foster Street, Suite 205 Overland Park, Kansas 66213 Attention: General Counsel Facsimile: (913) 814-7766

7.14 D & O Insurance . The Company, the General Partner and/or QTS LLC will maintain directors’ and officers’ liability insurance during the Term and for a period of not less than six (6) years thereafter, covering acts and omissions of Executive during the Term, on terms substantially no less favorable than those in effect on the date of this Agreement. During the Term and for a period of not less than six (6) years thereafter, Executive shall receive the same benefits provided to any of the Company’s officers and directors under any additional D&O insurance or similar policy, any indemnification agreement, Company policies or the articles of organization or bylaws of the Company or the General Partner as in effect as of the date hereof, provided , however , that in the event that the benefits provided to any of the Company’s officers and directors under any of the foregoing documents or policies are enlarged after the date hereof, Executive shall receive such enlarged benefits.

7.15 Legal Fees . QTS LLC shall reimburse Executive for all reasonable legal fees incurred by Executive in connection with the negotiation, preparation and execution of this Agreement.

7.16 Arbitration . Any dispute or controversy arising under or in connection with this Agreement other than a dispute pursuant to Section 5.4 and Section 5.5 , shall be settled exclusively by arbitration in the State of Kansas by three arbitrators in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association in effect at the time of submission to arbitration. Judgment may be entered on the arbitrators’ award in any court having jurisdiction. For purposes of entering any judgment upon an award rendered by the arbitrators, QTS LLC and Executive each hereby consent to the jurisdiction of any or all of the following courts: (i) the United States District Court for the State of Kansas, (ii) any of the courts of the State of Kansas, or (iii) any other court having jurisdiction. QTS LLC and Executive further agree that any service of process or notice requirements in any such proceeding shall be satisfied if the rules of such court relating thereto have been substantially satisfied. QTS LLC and Executive hereby waive, to the fullest extent permitted by applicable law, any objection which it or he may now or hereafter have to such jurisdiction and any defense of inconvenient forum. QTS LLC and Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party shall bear its or his costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 7.16 ; provided , however , that the party that substantially prevails in an arbitration shall be reimbursed by the other party for all reasonable costs, including reasonable attorneys’ fees and costs, incurred by such prevailing party in connection with the arbitration. Notwithstanding any provision in this Section 7.16 , Executive shall be paid all compensation due and owing under this Agreement during the pendency of any dispute or controversy arising under or in connection with this Agreement.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.


COMPANY

QUALITYTECH, LP

By:	QUALITYTECH GP, LLC,
	its sole general partner

	By:	/s/ Shirley E. Goza
		Name:	Shirley E. Goza
		Title:	Vice President, General Counsel & Secretary

GENERAL PARTNER

QUALITYTECH GP, LLC

By:	/s/ Shirley E. Goza
Name:	Shirley E. Goza
Title:	Vice President, General Counsel & Secretary

QTS LLC

QUALITY TECHNOLOGY SERVICES, LLC

By:	/s/ Shirley E. Goza
Name:	Shirley E. Goza
Title:	Vice President, General Counsel & Secretary

EXECUTIVE

/s/ William H. Schafer
WILLIAM H. SCHAFER

Exhibit 10.6

EMPLOYMENT AGREEMENT

(James Reinhart)

This EMPLOYMENT AGREEMENT (the “ Agreement ”) is made as of June 15, 2012 (“ Effective Date ”), by and among QualityTech GP, LLC, a Delaware limited liability company (the “ Company ”), QualityTech, LP, a Delaware limited partnership (the “ OP ”), and James Reinhart, an individual (“ Executive ”), with respect to the following facts and circumstances:

RECITALS

WHEREAS, the Company and the OP desire for the Company to employ Executive as its Chief Operations Officer – Operations (“ COO-Operations ”) and for the Company to cause the Executive to be appointed COO-Operations of Quality Technology Services, LLC, a Delaware limited partnership and affiliate of the Company and the OP (“ QTS ”), and Executive desires to accept such employment and appointment, on the terms set forth below.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE 1

EMPLOYMENT, TERM AND DUTIES

1.1 Employment . QTS and/or the Company shall hereby employ Executive as the COO-Operations of the Company, upon the terms and conditions set forth in this Agreement, and shall cause Executive to be appointed COO-Operations of the Company for and during the Term. Executive shall report directly to the Chief Executive Officer (“CEO”) of the Company, unless otherwise determined by the Board of Managers of the Company (“Board”)(but subject to Section 4.1.3(a)).

1.2 Term . QTS and/or the Company shall employ Executive, and Executive shall serve as the COO-Operations of the Company commencing upon the Effective Date, and continuing thereafter for a two (2) year term (the “ Term ”), unless earlier terminated under Article 4; provided , that the Term shall automatically renew for additional one (1)-year periods unless QTS (and/or the Company) or Executive gives notice of non-renewal at least thirty (30) days prior to expiration of the Term (as it may have been extended by any renewal period).

1.3 Duties . Executive shall perform all the duties and obligations reasonably associated with the position of COO-Operations and consistent with the Bylaws or other governing documents of QTS and/or the Company as in effect from time to time, subject to the supervision of the CEO of the Company, and shall perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the CEO (including the performance of services for any subsidiary or affiliate of the Company without any additional compensation). Executive shall perform the duties contemplated herein faithfully and diligently.

Executive shall devote substantially all of his business time and effort to the performance of Executive’s duties hereunder and to the business affairs of the OP and the Company; provided , that in no event shall this provision prohibit Executive from (i) performing social, civic, charitable and religious activities, (ii) managing personal investments and affairs, (iii) participating in educational or professional associations, or (iv) any other activities approved by the CEO, so long as the activities set forth in clauses (i) through (iv) above do not materially and adversely interfere with Executive’s duties and obligations hereunder or to the business affairs of the Company and/or QTS.

James Reinhart – Employment Agreement – Execution Version

ARTICLE 2

COMPENSATION

2.1 Salary . In consideration for Executive’s services hereunder, QTS or the Company shall pay Executive an annual salary at the rate of $350,000.00 per year during each of the years of the Term (“Base Pay”), payable in accordance with QTS’ regular payroll schedule from time to time (less any deductions required for Social Security, state, federal and local withholding taxes, and any other authorized or mandated similar withholdings). The Base Pay shall be reviewed by the Compensation Committee of the Company (the “ Compensation Committee ”), no less frequently than annually. Executive will have the opportunity to earn a bonus to be paid in accordance with QTS’ regular bonus payment schedule. Executive is eligible for a target bonus equal to 50% of his Base Pay based upon his performance and the performance of the Company (“Target Bonus”).

2.2 Equity Award : Executive will receive an equity award of Class O or Class RS Units with the Company’s regular issuance schedule, but not later than forty-five (45) days after the Effective Date (“Equity Awards”). The Equity Awards shall be structured as a “profits interest” intended to result in no tax at the time of issuance. The Equity Awards shall be subject to the terms of the OP’s 2010 Equity Participation Plan (or successor plan) (“Equity Plan”). The Equity Awards will be comprised of an initial grant of 50,000 Restricted Class A units (RS Units) and an initial grant of 50,000 Class A option awards (O Units). The Equity Awards will be subject to a four (4)-year vesting schedule and will become 100% vested upon the occurrence of a Change of Control as defined in the Equity Plan. The Equity Awards are in the form of partnership “profits interest” units and accordingly will require Executive to complete a form Section 83(b) election reporting $0.00 income. Additional equity awards may be made in accordance with QTS’ policies and as deemed appropriate by the Compensation Committee.

2.3 Attorneys’ Fees . The Company will reimburse Executive’s reasonably documented attorneys’ fees for purposes of review and negotiation of this Employment Agreement up to $10,000.00.

ARTICLE 3

EXECUTIVE BENEFITS

3.1 Vacation . Executive shall be entitled to four (4) weeks paid vacation each calendar year in accordance with the general policies of QTS or the Company applicable generally to other senior executives of QTS or the Company.

3.2 Employee Benefits . Executive shall receive all group insurance and retirement plan benefits and any other benefits on the same basis as are available to other senior executives of QTS and/or the Company under the personnel policies in effect from time to time. Executive shall receive all other such fringe benefits as QTS and/or the Company may offer to other senior executives under personnel policies in effect from time to time, such as health and disability insurance coverage and paid sick leave.

3.3 Reimbursement for Expenses . Executive shall be reimbursed for all documented reasonable expenses incurred by Executive in the performance of his duties or otherwise in furtherance of the business of QTS and/or the Company in accordance with the reimbursement policies in effect from time to time. Any reimbursement under this Section 3.3 that is taxable to Executive shall be made by December 31 of the calendar year following the calendar year in which Executive incurred the expense.

James Reinhart – Employment Agreement – Execution Version

ARTICLE 4

TERMINATION

4.1 Grounds for Termination .

4.1.1 Death or Disability . Executive’s employment shall terminate immediately in the event of Executive’s death or Disability. “ Disability ” means any: (i) physical disability or impairment, (ii) mental disability or impairment, (iii) illness or (iv) injury, that, in the good-faith judgment of the CEO, substantially prevents Executive from performing his duties and obligations under this Agreement or participating effectively and actively in the management of QTS, the Company, and/or the OP for more than three consecutive months or for more than 90 days in any 180-day period.

4.1.2 Cause . QTS and the Company shall have the right to terminate Executive’s employment by giving written notice of such termination to Executive upon the occurrence of any one or more of the following events (which, for purposes of this Agreement, shall constitute “ Cause ”):

(a)

Executive’s conviction of, or pleading guilty or nolo contendere to, a crime that constitutes a felony or any lesser criminal offense involving dishonesty or moral turpitude;

(b)

any commission by Executive of an act of dishonesty, theft, fraud, or embezzlement;

(c)

any willful act by Executive that has a significant adverse effect on the reputation of QTS, the Company, or any of their affiliates;

(d)

the substantial failure or refusal by Executive to perform the duties of COO-Operations. It shall be a condition precedent to the Company’s right to terminate employment for Cause pursuant to this subsection (d) that (i) the Company shall have first given Executive written notice stating with reasonable specificity the act(s) on which such termination is premised; (b) if such act(s) is susceptible of cure or remedy, Executive shall have sixty (60) days after receipt of such notice to cure any deficiencies, or;

(e)

Executive’s material violation of the material written rules, regulations, procedures, or policies relating to the conduct of employees, directors or officers of the Company.

For purposes of paragraph (c), no act or omission by Executive shall be “willful” if conducted in good faith and with a reasonable belief that such act or omission was in the best interests of the Company.

4.1.3 Good Reason . Executive may terminate his employment under this Agreement by giving written notice to the Company upon the occurrence of any one or more of the following events (which, for purposes of this Agreement, shall constitute “ Good Reason ”):

(a)

A material diminution in Executive’s authority, duties or responsibilities (including reporting responsibilities), or any significant adverse change in Executive’s title as COO-Operations of the Company and the GP, or;

James Reinhart – Employment Agreement – Execution Version

(b)

A material diminution in Executive’s Base Pay, as in effect from time to time, or;

(c)

The Executive’s place of employment is moved more than fifty (50) miles from the Company’s current location in Overland Park, Kansas, or;

(d)

The failure of a successor to the assets or business of the Company or the OP to assume the obligations of the Company under this Agreement.

It shall be a condition precedent to Executive’s right to terminate his employment for Good Reason that (a) he shall have first given the Company written notice stating with reasonable specificity the act(s) on which such termination is premised within forty-five (45) days after Executive becomes aware of such act(s), (b) if such act(s) is susceptible of cure or remedy, it has not been cured or remedied within thirty (30) days after receipt of such notice, and Executive has terminated his employment within forty-five (45) days after so notifying the Company.

4.1.4 Any Other Reason . Notwithstanding anything to the contrary herein, the Company shall have the right to terminate Executive’s employment under this Agreement at any time without Cause by giving written notice of such termination to Executive, and Executive shall have the right to terminate Executive’s employment under this Agreement at any time without Good Reason by giving written notice of such termination to the Company. Any notice by Executive hereunder shall be given at least sixty (60) days in advance of such termination.

4.2 Termination Date . Except as provided in Section 4.1.1 with respect to Executive’s death or Disability, any termination under Section 4.1 shall be effective upon receipt of notice by Executive or the Company, as the case may be, of such termination or upon such other later date as may be provided herein or specified by the Company or Executive in the notice (the “ Termination Date ”).

4.3 Effect of Termination.

4.3.1 Termination with Cause or without Good Reason . In the event that Executive’s employment is terminated by the Company with Cause or by Executive without Good Reason, the Company shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by applicable law. “Accrued Obligations” means the sum of (a) Executive’s Base Pay hereunder through the Termination Date to the extent not theretofore paid, (b) the amount of any accrued but unused vacation pay, and (c) any business expense reimbursements incurred by Executive as of the Termination Date and submitted for reimbursement, in each case, consistent with the policy for such reimbursements, within ten (10) days following the Termination Date.

4.3.2 Termination without Cause, with Good Reason or due to Company Non-Renewal after the initial two-year Term . In the event that Executive’s employment is terminated by the Company without Cause, by Executive for Good Reason or due to Company Non-Renewal after the initial two-year Term:

(a)

The Company shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law;

James Reinhart – Employment Agreement – Execution Version

(b)

The Company shall pay to Executive, in a lump sum in cash one (1) year of Executive’s Base Pay plus the Target Bonus as in effect on the Termination Date;

(c)

The Company shall pay to Executive, in a lump sum in cash all bonus amounts earned but not yet paid for the year prior to the year in which the Termination Date occurs;

(d)

If Executive elects COBRA coverage, the Company shall reimburse Executive for his premiums for such coverage for a period of twelve (12) months.

(e)

The Company shall provide to Executive, at the Company’s expense, with outplacement services and support, the scope and provider of which will be selected by Executive, for a period of one (1) year follow the Termination Date.

The Company’s delivery of any notice under Section 1.2 of this Agreement that the Agreement will not be renewed and any subsequent termination of Executive’s employment at the expiration of such Term of the Agreement shall not be considered a termination without Cause except in the case of non-renewal after the initial two-year Term, and Executive shall not be entitled to any payments or benefits under this Section 4.3.2 under such circumstance.

4.3.3 Termination Due to Death or Disability . In the event that Executive’s employment is terminated due to Executive’s death or Disability the OP shall pay all Accrued Obligations to Executive or Executive’s estate in a lump sum in cash within thirty (30) business days after the Termination Date.

4.3.4 Waiver and Release Agreement . In consideration of the severance payments and other benefits described in clauses (b), (c), (e) and (f) of Section 4.3.2, to which severance payments and benefits Executive would not otherwise be entitled, and as a precondition to Executive becoming entitled to such severance payments and other benefits under this Agreement, Executive agrees to execute and deliver to the Company within thirty (30) business days after the applicable Termination Date a waiver and general release of claims in favor of the Company and the OP, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, in a form reasonably satisfactory to the Company, that has become effective in accordance with its terms. If Executive fails to execute and deliver the Release Agreement within thirty (30) business days after the applicable Termination Date, or if Executive revokes such Release as provided therein, the Company shall have no obligation to provide any of the severance payments and other benefits described in clauses (b), (c), (e) or (f) of Section 4.3.2. If such severance payments and other benefits could be paid in either of two calendar years depending on the date such release is delivered to the Company, such payments shall be made on the later of January 15, or the dats such release is delivered and becomes non-revocable, of such later calendar year.

4.4 Required Delay For Certain Deferred Compensation and Section 409A . In the event that any compensation with respect to Executive’s termination is “deferred compensation” within the

James Reinhart – Employment Agreement – Execution Version

meaning of Section 409A of the Code and the regulations promulgated thereunder (“ Section 409A ”), the shares of the Company, the OP or any affiliate is publicly traded on an established securities market or otherwise, and Executive is determined to be a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code, payment of such compensation shall be delayed as required by Section 409A. Such delay shall last six (6) months from the date of Executive’s termination, except in the event of Executive’s death. Within twenty (20) business days following the end of such six (6)-month period, or, if earlier, Executive’s death, the Company shall make a catch-up payment to Executive equal to the total amount of such payments that would have been made during the six (6)-month period but for this Section 4.4. Such catch-up payment shall bear simple interest at the prime rate of interest as published by the Wall Street Journal’s bank survey as of the first day of the six (6)-month period, which such interest shall be paid with the catch-up payment. Wherever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A.

4.5 Non-Exclusivity of Rights . Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company, QTS, the OP or its subsidiaries and for which Executive may qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any other contract or agreement with the Company, QTS, the OP or its subsidiaries at or subsequent to the termination date, which shall be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement.

ARTICLE 5

RESTRICTIVE COVENANTS

5.1 Confidential Information .

5.1.1 Obligation to Maintain Confidentiality . Executive acknowledges that, by reason of Executive’s employment by the Company, the Executive will have access to confidential information (collectively, “ Confidential Information ”) of the Company, the OP and their respective subsidiaries (collectively, the “ Quality Companies ”). Executive acknowledges that such Confidential Information is a valuable and unique asset of the Quality Companies and covenants that, both during and after the Term, Executive shall not disclose any Confidential Information to any person, partnership, corporation, limited liability company, or any other entity (“ Person ”) (except as Executive’s duties as a manager, or employee of the Company and the OP require) without the prior written authorization of the Board. The obligation of confidentiality imposed by this Section 5.1 shall not apply to Confidential Information that otherwise becomes known to the public through no act of Executive in breach of this Agreement or which is required to be disclosed by court order, applicable law or regulatory requirements, nor shall it apply to Executive’s disclosure of Confidential Information to his attorneys and advisors in connection with a dispute between Executive and a Quality Company.

5.1.2 Company Property . All records, designs, business plans, financial statements, customer lists, manuals, memoranda, lists, research and development plans, Intellectual Property and other property delivered to or compiled by Executive by or on behalf of any Quality Company or its providers, clients or customers that pertain to the business of any Quality Company shall be and remain the property of such Quality Company and be subject at all times to its discretion and control. Likewise, all correspondence, reports, records, charts, advertising materials and other similar data pertaining to the business, activities, research and development, Intellectual Property or future plans of a Quality Company that is collected by the Executive shall be delivered promptly to such Quality Company without request by it upon termination of Executive’s employment for any reason. For purposes of this Section

James Reinhart – Employment Agreement – Execution Version

5.1.3 “ Intellectual Property ” shall mean patents, copyrights, trademarks, trade dress, trade secrets, other such rights, and any applications therefor.

5.2 Inventions . Executive is hereby retained in a capacity such that Executive’s responsibilities may include the making of technical and managerial contributions of value to the Quality Companies. Executive hereby assigns to the applicable Quality Company all rights, title and interest in such contributions and inventions made or conceived by Executive alone or jointly with others during the Term that relate to the business of such Quality Company. This assignment shall include (a) the right to file and prosecute patent applications on such inventions in any and all countries, (b) the patent applications filed and patents issuing thereon, and (c) the right to obtain copyright, trademark or trade name protection for any such work product. Executive shall promptly and fully disclose all such contributions and inventions to the Company and the OP and assist the Company and the OP or any other Quality Company, as the case may be, in obtaining and protecting the rights therein (including patents thereon), in any and all countries; provided , however , that said contributions and inventions shall be the property of the applicable Quality Company, whether or not patented or registered for copyright, trademark or trade name protection, as the case may be. Notwithstanding the foregoing, no Quality Company shall have any right, title or interest in any work product or copyrightable work developed outside of work hours and without the use of any Quality Company’s resources that does not relate to the business of any Quality Company and does not result from any work performed by Executive for any Quality Company.

5.3 Non-disparagement . Executive agrees that he will not talk about or otherwise communicate to any third parties in a malicious, disparaging, or defamatory manner regarding the Company, the OP or any of their affiliates, owners or their past or present employees, directors, officers or other representatives and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of the Company, the OP or any of their affiliates, owners or their past or present employees, directors, officers or other representatives or their past or present employees, officers or other representatives.

The Company and the OP agree that they will not talk about or otherwise communicate to any third parties in a malicious, disparaging, or defamatory manner regarding Executive and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of Executive. For purposes of this non-disparagement provision, the Company and the OP are defined to mean the Company’s executive team and the Board.

5.4 Cooperation . At all times during Executive’s employment and after the date of Executive’s termination of employment, Executive agrees to reasonably cooperate (if occurring after termination of employment, to the extent not interfering with Executive’s other full-time business endeavors) (i) with the Company and the OP in the defense of any legal matter involving any matter that arose during Executive’s employment in the business of the Company and the OP, and (ii) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding pertaining to the business of the Company and the OP. The Company or the OP, as applicable, will reimburse Executive for reasonable travel and out of pocket expenses incurred by Executive in providing such cooperation.

5.5 Reasonableness of Restrictions; Blue-Penciling . Executive has carefully read and considered the provisions of Section 5 of this Agreement, and, having done so, agrees that the restrictions set forth in such paragraphs are fair and reasonable and reasonably required for the protection of the interests of the Company and the OP and their businesses. If any of the provisions of Section 5 shall be held to be invalid or unenforceable, the remaining provisions thereof shall

James Reinhart – Employment Agreement – Execution Version

nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included therein. If any provision of Section 5 relating to time periods or areas of restriction shall be declared by a court of competent jurisdiction to exceed the maximum time period or areas such court deems reasonable and enforceable, said time periods and/or areas of restriction shall be deemed to become and thereafter be the maximum time period and/or areas which such court deems reasonable and enforceable.

5.6 Breach of Restrictive Covenants . The parties agree that a breach or violation of any provision of this Article 5 will result in immediate and irreparable injury and harm to the Company, the OP and their business, and that the Company, the OP and their affiliates shall have, in addition to any and all remedies of law and other consequences under this Agreement, the right to seek an injunction, specific performance or other equitable relief to prevent the violation of the obligations hereunder, including without limitation, to address any threatened breach or violation, and to enjoin and restrain Executive and each and every person, firm, company or corporation concerned therewith, from the violation or continuance of such violation or breach. In addition thereto, Executive shall be responsible for all damages, including reasonable attorneys’ fees, sustained by the Company, the OP and their affiliates by reason of said violation.

ARTICLE 6

GOVERNING LAW

ARTICLE 7

MISCELLANEOUS

7.3 Counterparts . This Agreement may be executed in one of more counterparts, each of which shall be deemed and original, but all of which shall together constitute one and the same instrument.

James Reinhart – Employment Agreement – Execution Version

7.5 Waiver or Delay . The failure or delay on the part of the Company or Executive to exercise any right or remedy, power or privilege hereunder shall not operate as a waiver thereof. A waiver, to be effective, must be in writing and signed by the party making the waiver. A written waiver of default shall not operate as a waiver of any other default or of the same type of default on a future occasion.


To Executive:		James Reinhart
		Address on file with the Company

To the Company or the OP:		c/o QualityTech GP, LLC 12851 Foster Street, Suite 205 Overland Park, Kansas 66213 Attention: General Counsel Facsimile: (913) 814-7766

7.11 Counsel . Executive has been advised by the Company and the OP that he should consider seeking the advice of counsel in connection with the execution of this Agreement and the other agreements contemplated hereby and Executive has had an opportunity to do so. Executive has read and understands this Agreement, and has sought the advice of counsel to the extent he has determined appropriate.

7.12 Withholding of Compensation . Executive hereby agrees that the Company may deduct and withhold from the compensation or other amounts payable to Executive hereunder or

James Reinhart – Employment Agreement – Execution Version

otherwise in connection with Executive’s employment any amounts required to be deducted and withheld by the Company under the provisions of any applicable Federal, state and local statute, law, regulation, ordinance or order.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.


COMPANY

QualityTech GP, LLC

By:	/s/ Shirley Goza
Name:	Shirley Goza
Title:	General Counsel

OP

QualityTech, LP

By:	QualityTech GP, LLC, its sole general partner

	By:	/s/ Shirley Goza
	Name:	Shirley Goza
	Title:	General Counsel

EXECUTIVE

/s/ James Reinhart
James Reinhart

James Reinhart – Employment Agreement – Execution Version

Exhibit 10.7

AMENDMENT NO. 1 TO

EMPLOYMENT AGREEMENT

(James Reinhart)

THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this “ Amendment ”) is made as of August 14, 2013 (“ Effective Date ”), by and among QualityTech GP, LLC, a Delaware limited liability company (the “ Company ”), QualityTech, LP, a Delaware limited partnership (the “ OP ”), Quality Technology Services, LLC, a Delaware limited liability company (“ QTS ”), and James Reinhart, an individual (“ Executive ”), with respect to the following facts and circumstances:

RECITALS

WHEREAS, the Company, the OP and the Executive have entered into that certain Employment Agreement, dated June 29, 2013 (the “ Employment Agreement ”), and now desire to amend the Employment Agreement on the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

1. Amendment.

(a) The Preamble to the Employment Agreement hereby is amended by deleting the defined term “(“ Company ”)” and replacing such defined term with: “(together with any successor general partner of the OP, the “ Company ”).”

(b) Section 4.3.3 of the Employment Agreement hereby is amended by inserting the following new clause (d) and re-numbering the remaining clauses accordingly:

“(d) If not previously vested in full, the Equity Awards and any other equity awards granted to Executive following the date hereof that otherwise would vest during the then-current term of this Agreement (whether the initial term or any renewal term) shall fully vest as of the Termination Date;”

(c) The Employment Agreement hereby is amended by deleting Section 4.3.3 and replacing such section with the following new Section 4.3.3:

“4.3.3 Termination Due to Death or Disability . In the event that Executive’s employment is terminated due to Executive’s death or Disability the OP shall pay all Accrued Obligations to Executive or Executive’s estate in a lump sum in cash within thirty (30) business days after the Termination Date. In addition, if not previously vested in full, the Equity Awards and any other equity awards granted to Executive shall fully vest as of the Termination Date.”

(d) The Employment Agreement hereby is amended by adding new Section 4.6 immediately following Section 4.5:

“4.6 Excise Tax-Related Provisions . The payments and benefits that Executive may be entitled to receive under this Agreement and other payments and benefits that Executive is or may be entitled to receive under other plans, agreements and arrangements (which, together with the benefits provided under this Agreement, are referred to as “ Payments ”), may constitute Parachute Payments (as defined below) that are subject to Sections 280G and 4999 of the Code. As provided in this Section 4.6 , the Parachute Payments will be reduced if, and only to the extent that, a reduction will allow Executive to receive a greater Net After Tax Amount (as defined below) than Executive would receive absent a reduction.

4.6.1 The Accounting Firm (as defined below) will first determine the amount of any Parachute Payments that are payable to the Executive. The Accounting Firm also will determine the Net After Tax Amount attributable to the Executive’s total Parachute Payments.

4.6.2 The Accounting Firm will next determine the largest amount of Payments that may be made to the Executive without subjecting Executive to tax under Section 4999 of the Code (the “ Capped Payments ”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.

4.6.3 Executive will receive the total Parachute Payments or the Capped Payments, whichever provides Executive with the higher Net After Tax Amount. If Executive will receive the Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount of any cash benefits under this Agreement or any other plan, agreement or arrangement (with the source of the reduction to be directed by the Company) and then by reducing the amount of any noncash benefits under this Agreement or any other plan, agreement or arrangement (with the source of the reduction to be directed by the Company). The Accounting Firm will notify Executive and the Company if it determines that the Parachute Payments must be reduced to the Capped Payments and will send Executive and the Company a copy of its detailed calculations supporting that determination.

believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Executive must repay to the Company, without interest, the amount of the Overpayment; provided , however , that no amount will be payable by the Executive to the Company unless, and then only to the extent that, the payment would either reduce the amount on which the Executive is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Executive and the Company of that determination and the amount of that Underpayment will be paid to the Executive promptly by the Company.

For purposes of this Section 4.6 , the term “ Accounting Firm ” means the independent accounting firm engaged by the Company immediately before a Change in Control. For purposes of this Section 4.6 , the term “ Net After Tax Amount ” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Sections 1, 3101(b) and 4999 of the Code and any State or local income taxes applicable to Executive on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment. For purposes of this Section 4.6 , the term “ Parachute Payment ” means a payment that is described in Section 280G(b)(2) of the Code, determined in accordance with Section 280G of the Code and the regulations promulgated or proposed thereunder.”

2. Joinder. QTS hereby joins the Employment Agreement as if QTS were originally a party thereto.

3. Employment Agreement Unchanged. Except as modified by this Amendment, all terms and conditions of the Employment Agreement shall remain in full force and effect and shall be unaffected hereby.

(e) Governing Law. This Amendment, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Kansas, but not including the choice-of-law rules thereof.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

IN WITNESS WHEREOF, each of the undersigned has executed and delivered this Amendment, or caused this Amendment to be duly executed on its behalf, as of the date first set forth above.


COMPANY

QUALITYTECH GP, LLC

By:	/s/ Chad L. Williams
Name:	Chad L. Williams
Title:	Chief Executive Officer

OP

QUALITYTECH, LP

By:	QUALITYTECH GP, LLC,
	its sole general partner

	By:	/s/ Chad L. Williams
		Name:	Chad L. Williams
		Title:	Chief Executive Officer

QTS

QUALITY TECHNOLOGY SERVICES, LLC

By:	/s/ Chad L. Williams
Name:	Chad L. Williams
Title:	Chief Executive Officer

EXECUTIVE

/s/ James Reinhart
JAMES REINHART

Exhibit 10.8

EMPLOYMENT AGREEMENT

(Daniel Bennewitz)

This EMPLOYMENT AGREEMENT (the “ Agreement ”) is made as of June 29, 2012 (“ Effective Date ”), by and among QualityTech GP, LLC, a Delaware limited liability company (the “ Company ”), QualityTech, LP, a Delaware limited partnership (the “ OP ”), and Daniel Bennewitz, an individual (“ Executive ”), with respect to the following facts and circumstances:

RECITALS

WHEREAS, the Company and the OP desire for the Company to employ Executive as its Chief Operations Officer–Sales and Marketing (“ COO-Sales and Marketing ”) and for the Company to cause the Executive to be appointed COO-Sales and Marketing of Quality Technology Services, LLC, a Delaware limited partnership and affiliate of the Company and the OP (“ QTS ”), and Executive desires to accept such employment and appointment, on the terms set forth below.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE 1

EMPLOYMENT, TERM AND DUTIES

1.1 Employment . QTS and/or the Company shall hereby employ Executive as the COO-Sales and Marketing of the Company, upon the terms and conditions set forth in this Agreement, and shall cause Executive to be appointed COO-Sales and Marketing of the Company for and during the Term. Executive shall report directly to the Chief Executive Officer (“CEO”) of the Company, unless otherwise determined by the Board of Managers of the Company (“Board”)(but subject to Section 4.1.3(a)).

1.2 Term . QTS and/or the Company shall employ Executive, and Executive shall serve as the COO-Sales and Marketing of the Company commencing upon the Effective Date, and continuing thereafter for a two (2) year term (the “ Term ”), unless earlier terminated under Article 4; provided , that the Term shall automatically renew for additional one (1)-year periods unless QTS (and/or the Company) or Executive gives notice of non-renewal at least thirty (30) days prior to expiration of the Term (as it may have been extended by any renewal period).

1.3 Duties . Executive shall perform all the duties and obligations reasonably associated with the position of COO-Sales and Marketing and consistent with the Bylaws or other governing documents of QTS and/or the Company as in effect from time to time, subject to the supervision of the CEO of the Company, and shall perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the CEO (including the performance of services for any subsidiary or affiliate of the Company without any additional compensation). Executive shall perform the duties contemplated herein faithfully and diligently.

Daniel Bennewitz – Employment Agreement – Execution Version

ARTICLE 2

COMPENSATION

2 . 3 Attorneys’ Fees . The Company will reimburse Executive’s reasonably documented attorneys’ fees for purposes of review and negotiation of this Employment Agreement up to $10,000.00.

ARTICLE 3

EXECUTIVE BENEFITS

3.2 Employee Benefits . Executive shall receive all group insurance and retirement plan benefits and any other benefits on the same basis as are available to other senior executives of QTS and/or the Company under the personnel policies in effect from time to time. Executive shall receive all other such fringe benefits as QTS and/or the Company may offer to other senior executives under personnel policies in effect from time to time, such as health and disability insurance coverage and paid sick leave.

Daniel Bennewitz – Employment Agreement – Execution Version

ARTICLE 4

TERMINATION

4.1 Grounds for Termination .

(a)

Executive’s conviction of, or pleading guilty or nolo contendere to, a crime that constitutes a felony or any lesser criminal offense involving dishonesty or moral turpitude;

(b)

any commission by Executive of an act of dishonesty, theft, fraud, or embezzlement;

(c)

any willful act by Executive that has a significant adverse effect on the reputation of QTS, the Company, or any of their affiliates;

(d)

the substantial failure or refusal by Executive to perform the duties of COO-Sales and Marketing. It shall be a condition precedent to the Company’s right to terminate employment for Cause pursuant to this subsection (d) that (i) the Company shall have first given Executive written notice stating with reasonable specificity the act(s) on which such termination is premised; (b) if such act(s) is susceptible of cure or remedy, Executive shall have sixty (60) days after receipt of such notice to cure any deficiencies, or;

(e)

Executive’s material violation of the material written rules, regulations, procedures, or policies relating to the conduct of employees, directors or officers of the Company.

(a)

Daniel Bennewitz – Employment Agreement – Execution Version

(b)

A material diminution in Executive’s Base Pay, as in effect from time to time, or;

(c)

The Executive’s place of employment is moved more than fifty (50) miles from the Company’s current location in Overland Park, Kansas, or;

(d)

The failure of a successor to the assets or business of the Company or the OP to assume the obligations of the Company under this Agreement.

4.3 Effect of Termination.

(a)

The Company shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law;

Daniel Bennewitz – Employment Agreement – Execution Version

(b)

The Company shall pay to Executive, in a lump sum in cash one (1) year of Executive’s Base Pay plus the Target Bonus as in effect on the Termination Date;

(c)

The Company shall pay to Executive, in a lump sum in cash all bonus amounts earned but not yet paid for the year prior to the year in which the Termination Date occurs;

(d)

If Executive elects COBRA coverage, the Company shall reimburse Executive for his premiums for such coverage for a period of twelve (12) months.

(e)

The Company’s delivery of any notice under Section 1.2 of this Agreement that the Agreement will not be renewed and any subsequent termination of Executive’s employment at the expiration of such Term of the Agreement shall not be considered a termination without Cause except in the case of non-renewal after the initial two-year Term, and Executive shall not be entitled to any payments or benefits under this Section 4.3.2 under such circumstance.

4.3.4 Waiver and Release Agreement . In consideration of the severance payments and other benefits described in clauses (b), (c), (e) and (f) of Section 4.3.2, to which severance payments and benefits Executive would not otherwise be entitled, and as a precondition to Executive becoming entitled to such severance payments and other benefits under this Agreement, Executive agrees to execute and deliver to the Company within thirty (30) business days after the applicable Termination Date a waiver and general release of claims in favor of the Company and the OP, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, in a form reasonably satisfactory to the Company, that has become effective in accordance with its terms. If Executive fails to execute and deliver the Release Agreement within thirty (30) business days after the applicable Termination Date, or if Executive revokes such Release as provided therein, the Company shall have no obligation to provide any of the severance payments and other benefits described in clauses (b), (c), (e) or (f) of Section 4.3.2. If such severance payments and other benefits could be paid in either of two calendar years depending on the date such release is delivered to the Company, such payments shall be made on the later of January 15, or the date such release is delivered and becomes non-revocable, of such later calendar year.

4.4 Required Delay For Certain Deferred Compensation and Section 409A . In the event that any compensation with respect to Executive’s termination is “deferred compensation” within the

Daniel Bennewitz – Employment Agreement – Execution Version

4.5 Non-Exclusivity of Rights . Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company, QTS, the OP or its subsidiaries and for which Executive may qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any other contract or agreement with the Company, QTS, the OP or its subsidiaries at or subsequent to the termination date, which shall be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement.

ARTICLE 5

RESTRICTIVE COVENANTS

5.1 Confidential Information .

Daniel Bennewitz – Employment Agreement – Execution Version

5.1.3 “ Intellectual Property ” shall mean patents, copyrights, trademarks, trade dress, trade secrets, other such rights, and any applications therefor.

5.2 Inventions . Executive is hereby retained in a capacity such that Executive’s responsibilities may include the making of technical and managerial contributions of value to the Quality Companies. Executive hereby assigns to the applicable Quality Company all rights, title and interest in such contributions and inventions made or conceived by Executive alone or jointly with others during the Term that relate to the business of such Quality Company. This assignment shall include (a) the right to file and prosecute patent applications on such inventions in any and all countries, (b) the patent applications filed and patents issuing thereon, and (c) the right to obtain copyright, trademark or trade name protection for any such work product. Executive shall promptly and fully disclose all such contributions and inventions to the Company and the OP and assist the Company and the OP or any other Quality Company, as the case may be, in obtaining and protecting the rights therein (including patents thereon), in any and all countries; provided , however , that said contributions and inventions shall be the property of the applicable Quality Company, whether or not patented or registered for copyright, trademark or trade name protection, as the case may be. Notwithstanding the foregoing, no Quality Company shall have any right, title or interest in any work product or copyrightable work developed outside of work hours and without the use of any Quality Company’s resources that does not relate to the business of any Quality Company and does not result from any work performed by Executive for any Quality Company.

Daniel Bennewitz – Employment Agreement – Execution Version

ARTICLE 6

GOVERNING LAW

ARTICLE 7

MISCELLANEOUS

7.3 Counterparts . This Agreement may be executed in one of more counterparts, each of which shall be deemed and original, but all of which shall together constitute one and the same instrument.

Daniel Bennewitz – Employment Agreement – Execution Version


To Executive:		Daniel Bennewitz
		Address on file with the Company

To the Company or the OP:		c/o QualityTech GP, LLC 12851 Foster Street, Suite 205 Overland Park, Kansas 66213 Attention: General Counsel Facsimile: (913) 814-7766

7.12 Withholding of Compensation . Executive hereby agrees that the Company may deduct and withhold from the compensation or other amounts payable to Executive hereunder or

Daniel Bennewitz – Employment Agreement – Execution Version

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.


COMPANY

QualityTech GP, LLC

By:	/s/ Shirley Goza
Name:	Shirley Goza
Title:	General Counsel

OP

QualityTech, LP

By:	QualityTech GP, LLC, its sole general partner

	By:	/s/ Shirley Goza
	Name:	Shirley Goza
	Title:	General Counsel

EXECUTIVE

/s/ Daniel Bennewitz
Daniel Bennewitz

Daniel Bennewitz – Employment Agreement – Execution Version

Exhibit 10.9

AMENDMENT NO. 1 TO

EMPLOYMENT AGREEMENT

(Daniel Bennewitz)

THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this “ Amendment ”) is made as of August 14, 2013 (“ Effective Date ”), by and among QualityTech GP, LLC, a Delaware limited liability company (the “ Company ”), QualityTech, LP, a Delaware limited partnership (the “ OP ”), Quality Technology Services, LLC, a Delaware limited liability company (“ QTS ”), and Daniel Bennewitz, an individual (“ Executive ”), with respect to the following facts and circumstances:

RECITALS

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

1. Amendment.

(b) Section 4.3.3 of the Employment Agreement hereby is amended by inserting the following new clause (d) and re-numbering the remaining clauses accordingly:

(c) The Employment Agreement hereby is amended by deleting Section 4.3.3 and replacing such section with the following new Section 4.3.3:

(d) The Employment Agreement hereby is amended by adding new Section 4.6 immediately following Section 4.5:

2. Joinder. QTS hereby joins the Employment Agreement as if QTS were originally a party thereto.

3. Employment Agreement Unchanged. Except as modified by this Amendment, all terms and conditions of the Employment Agreement shall remain in full force and effect and shall be unaffected hereby.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

IN WITNESS WHEREOF, each of the undersigned has executed and delivered this Amendment, or caused this Amendment to be duly executed on its behalf, as of the date first set forth above.


COMPANY

QUALITYTECH GP, LLC

By:	/s/ Chad L. Williams
Name:	Chad L. Williams
Title:	Chief Executive Officer

OP

QUALITYTECH, LP

By:	QUALITYTECH GP, LLC, its sole general partner

	By:	/s/ Chad L. Williams
		Name:	Chad L. Williams
		Title:	Chief Executive Officer

QTS

QUALITY TECHNOLOGY SERVICES, LLC

By:	/s/ Chad L. Williams
Name:	Chad L. Williams
Title:	Chief Executive Officer

EXECUTIVE

/s/ Daniel Bennewitz
DANIEL BENNEWITZ

Exhibit 10.10

EMPLOYMENT AGREEMENT

(Jeffrey Berson)

This EMPLOYMENT AGREEMENT (the “ Agreement ”) is made as of August 1, 2013 (“ Effective Date ”), by and among QualityTech, LP, a Delaware limited partnership (the “ Company ”), QualityTech GP, LLC, a Delaware limited liability company and general partner of the Company (together with any successor general partner of the Company, the “ General Partner ”), Quality Technology Services, LLC, a Delaware limited liability company and an affiliate of the Company (“ QTS LLC ”) and Jeffrey Berson, an individual (“ Executive ”), with respect to the following facts and circumstances:

RECITALS

WHEREAS, the Company desires to employ Executive as its Chief Investment Officer (“ CIO ”) and the GP desires to appoint Executive as its CIO, and Executive desires to accept such employment and appointment, on the terms set forth below.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE 1

EMPLOYMENT, TERM AND DUTIES

1.1 Employment . QTS LLC shall hereby employ Executive as the CIO of the Company, upon the terms and conditions set forth in this Agreement, and shall cause Executive to be appointed CIO of the Company for and during the Term. In addition, during the Term, Executive shall serve as the CIO of the General Partner and QTS LLC and shall report to the Chief Executive Officer of the General Partner (“ GP CEO ”), unless determined otherwise by the Board.

1.2 Term . The period of employment of the Executive by the Company shall, subject to earlier termination as provided in this Agreement, commence upon the date hereof or, in the event that Executive’s prior employer, UBS, exercises “Notice Period” rights under its agreement with Executive, such date as Executive is permitted to commence working for the Company without violating his agreement with UBS (the “ Effective Date ”) and continue thereafter for a term (the “ Term ”) of two (2) years. After the initial Term, the Term of this Agreement shall automatically be renewed for additional Terms of one (1) year each, unless the Company or Executive gives notice of non-renewal at least thirty (30) days prior to expiration of the Term (as it may have been extended by any renewal period).

1.3 Duties . Executive shall perform all the duties and obligations reasonably associated with the position of CIO and consistent with the Bylaws or other governing documents of the Company and the General Partner, as applicable, as in effect from time to time, subject to the supervision of the CEO of the Company, and shall perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the CEO (including the performance of services for any subsidiary or affiliate of the Company or the General Partner without any additional compensation). Executive shall perform the duties contemplated herein faithfully and diligently. The Company acknowledges and agrees that Executive may perform his duties hereunder from Executive’s home office.

Executive shall devote substantially all of his business time and effort to the performance of Executive’s duties hereunder and to the business affairs of the OP and the Company; provided , that

in no event shall this provision prohibit Executive from (i) performing social, civic, charitable and religious activities, (ii) managing personal investments and affairs, (iii) participating in educational or professional associations, or (iv) any other activities approved by the CEO, so long as the activities set forth in clauses (i) through (iv) above do not materially and adversely interfere with Executive’s duties and obligations hereunder or to the business affairs of the Company and/or QTS.

ARTICLE 2

COMPENSATION

2.1 Salary . In consideration for Executive’s services hereunder, QTS LLC shall pay Executive an annual salary at the rate of $325,000.00 per year during each of the years of the Term (“Base Pay”), payable in accordance with QTS LLC’s regular payroll schedule from time to time (less any deductions required for Social Security, state, federal and local withholding taxes, and any other authorized or mandated similar withholdings). The Base Pay shall be reviewed by the Compensation Committee of the Company (the “ Compensation Committee ”), no less frequently than annually. The amount of the Base Pay may be increased (but not decreased) as determined by the Compensation Committee of the Company unless the reduction is the part of a broader action related to senior executive salaries. Executive will have the opportunity to earn a bonus to be paid in accordance with QTS LLC’s regular bonus payment schedule. Executive is eligible for a target bonus equal to 50% of his Base Pay based upon his performance and the performance of the Company (“Target Bonus”). Target Bonus shall not be prorated for the calendar year 2013.

2.2 Equity Award : Executive will receive an equity award under the Company’s new LTIP program, which has not yet been finalized (“ Equity Awards ”). The Equity Awards shall be subject to the terms of the Company’s new LTIP program (or successor plan) (“ Equity Plan ”). The Equity Awards will be comprised of an initial grant valued at $650,000. The initial grant shall be made on the earlier of: (i) the date on which the Company completes it initial public offering, and (ii) on the three (3) month anniversary of the Effective Date based upon an agreed upon valuation of the Company’s equity at that time (the “Initial Award Date”). The Equity Awards will be subject to a four (4)-year vesting schedule and will become 100% vested upon the occurrence of a Change of Control as defined in the Equity Plan. Additional equity awards may be made in accordance with QTS’ policies and as deemed appropriate by the Compensation Committee provided that Executive shall be targeted for additional annual Equity Awards which each having a target value equal to 100% of his then-current Base Pay.

ARTICLE 3

EXECUTIVE BENEFITS

3.1 Vacation . Executive shall be entitled to four (4) weeks paid vacation each calendar year in accordance with the general policies of QTS LLC or the Company applicable generally to other senior executives of the Company, the General Partner and QTS LLC.

3.3 Reimbursement for Expenses . Executive shall be reimbursed for all documented reasonable expenses incurred by Executive in the performance of his duties set forth in Section 1.3 or

otherwise in furtherance of the business of the Company, the General Partner or QTS LLC in accordance with the reimbursement policies in effect from time to time. In addition, the Company shall reimburse Executive for the amount of mutually agreed upon costs incurred by Executive in connection with the establishment of Executive’s home office. Any reimbursement under this Section 3.3 that is taxable to Executive shall be made by December 31 of the calendar year following the calendar year in which Executive incurred the expense.

ARTICLE 4

TERMINATION

4.1 Grounds for Termination .

4.1.1 Death or Disability . Executive’s employment shall terminate immediately in the event of Executive’s death or Disability. “ Disability ” means any: (i) physical disability or impairment, (ii) mental disability or impairment, (iii) illness or (iv) injury, that, in the good-faith judgment of the Board, substantially prevents Executive from performing his duties and obligations under this Agreement or participating effectively and actively in the management of QTS, the Company, and/or the OP for more than three consecutive months or for more than 90 consecutive days in any 180-day period.

(a)

Executive’s conviction of, or pleading guilty or nolo contendere to, a crime that constitutes a felony or any lesser criminal offense involving dishonesty or moral turpitude;

(b)

any commission by Executive of an act of dishonesty, theft, fraud, or embezzlement;

(c)

any willful act by Executive that has a significant adverse effect on the reputation of the Company, the General Partner or QTS LLC, or any of their affiliates;

(d)

the substantial failure or refusal by Executive to perform the duties of CIO or;

(e)

Executive’s material violation of the material written rules, regulations, procedures, or policies relating to the conduct of employees, directors or officers of QTS LLC.

It shall be a condition precedent to QTS LLC’s right to terminate employment for Cause pursuant to subsections (c), (d) and (e) above that (i) QTS LLC shall have first given Executive written notice stating with reasonable specificity the act(s) on which such termination is premised; (b) if such act(s) is susceptible of cure or remedy, Executive shall have sixty (60) days after receipt of such notice to cure any deficiencies. For purposes of paragraph (c), no act or omission by Executive shall be “willful” if conducted in good faith and with a reasonable belief that such act or omission was in the best interests of the Company.

(a)

(b)

A material diminution in Executive’s Base Pay, as in effect from time to time, or;

(c)

The Executive’s place of employment is moved more than fifty (50) miles from QTS LLC’s Jersey City, New Jersey location,

(d)

The failure of a successor to the assets or business of the Company, the General Partner or QTS LLC to assume the obligations of the Company, the General Partner or QTS LLC under this Agreement, or

(e)

The Company’s failure to make the initial Equity Award on the Initial Award Date.

It shall be a condition precedent to Executive’s right to terminate his employment for Good Reason that (a) he shall have first given QTS LLC written notice stating with reasonable specificity the act(s) on which such termination is premised within forty-five (45) days after Executive becomes aware of such act(s), (b) if such act(s) is susceptible of cure or remedy, it has not been cured or remedied within thirty (30) days after receipt of such notice, and Executive has terminated his employment within forty-five (45) days after so notifying QTS LLC.

4.2 Termination Date . Except as provided in Section 4.1.1 with respect to Executive’s death or Disability, any termination under Section 4.1 shall be effective upon receipt of notice by Executive or QTS LLC, as the case may be, of such termination or upon such other later date as may be provided herein or specified by QTS LLC or Executive in the notice (the “ Termination Date ”).

4.3 Effect of Termination .

4.3.1 Termination with Cause or without Good Reason . In the event that Executive’s employment is terminated by QTS LLC with Cause or by Executive without Good Reason, QTS LLC shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by applicable law. “Accrued Obligations” means the sum of (a) Executive’s Base Pay hereunder through the Termination Date to the extent not theretofore paid, (b) the amount of any accrued but unused vacation pay, and (c) any business expense reimbursements incurred by Executive as of the Termination Date and submitted for reimbursement, in each case, consistent with the policy for such reimbursements, within ten (10) days following the Termination Date.

4.3.2 Termination without Cause or with Good Reason . In the event that Executive’s employment is terminated by QTS LLC without Cause or by Executive for Good Reason:

(a)

QTS LLC shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law;

(b)

QTS LLC shall pay to Executive, in a lump sum in cash one (1) year of Executive’s Base Pay plus the Target Bonus as in effect on the Termination Date and, in the event that the initial Equity Award has not yet been made, the sum of $650,000;

(c)

If Executive elects COBRA coverage, the Company shall reimburse Executive for his premiums for such coverage for a period of twelve (12) months;

(d)

(e)

All unvested equity and stock options issued to Executive shall immediately become fully vested.

The Company’s delivery of any notice under Section 1.2 of this Agreement that the Agreement will not be renewed and any subsequent termination of Executive’s employment at the expiration of such Term of the Agreement for the first four years of employment (at the end of year 2 or at the end of year 4), Executive shall be entitled to payments and benefits under this Section 4.3.2. The Company’s delivery of any notice under Section 1.2 of this Agreement that the Agreement will not be renewed and any subsequent termination of Executive’s employment at the expiration of the Term of the Agreements after the fourth year of employment shall not be considered a termination without Cause, and Executive shall not be entitled to any payments or benefits under this Section 4.3.2 under such circumstance. For purposes of clarity, Executive shall not be entitled to any payments or benefits under this Section 4.3.2 in the event that Executive provides notice of his desire not to renew the contract as provided in Section 1.2 and remains employed by the Company or General Partner either as an employee-at-will or under another contractual arrangement.

4.3.4 Waiver and Release Agreement . In consideration of the severance payments and other benefits, to which severance payments and benefits Executive would not otherwise be entitled, and as a precondition to Executive becoming entitled to such severance payments and other benefits under this Agreement, Executive agrees to execute and deliver to QTS LLC within thirty (30) business days after the applicable Termination Date a waiver and general release of claims in favor

of the Company, the General Partner and QTS LLC, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, in a form reasonably satisfactory to QTS LLC, that has become effective in accordance with its terms. If Executive fails to execute and deliver the Release Agreement within thirty (30) business days after the applicable Termination Date, or if Executive revokes such Release as provided therein, QTS LLC shall have no obligation to provide any of the severance payments and other benefits described in clauses (b), (c), (e) or (f) of Section 4.3.2. If such severance payments and other benefits could be paid in either of two calendar years depending on the date such release is delivered to QTS LLC, such payments shall be made on the later of January 15, or the date such release is delivered and becomes non-revocable, of such later calendar year.

4.4 Required Delay For Certain Deferred Compensation and Section 409A . In the event that any compensation with respect to Executive’s termination is “deferred compensation” within the meaning of Section 409A of the Code and the regulations promulgated thereunder (“ Section 409A ”), the shares of the Company, the General Partner or any affiliate is publicly traded on an established securities market or otherwise, and Executive is determined to be a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code, payment of such compensation shall be delayed as required by Section 409A. Such delay shall last six (6) months from the date of Executive’s termination, except in the event of Executive’s death. Within twenty (20) business days following the end of such six (6)-month period, or, if earlier, Executive’s death, QTS LLC shall make a catch-up payment to Executive equal to the total amount of such payments that would have been made during the six (6)-month period but for this Section 4.4. Such catch-up payment shall bear simple interest at the prime rate of interest as published by the Wall Street Journal’s bank survey as of the first day of the six (6)-month period, which such interest shall be paid with the catch-up payment. Wherever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A. The Executive will be deemed to have a Termination Date for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A. Any amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred and any right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirth (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of QTS LLC.

4.5 Non-Exclusivity of Rights . Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or QTS LLC and for which Executive may qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any other contract or agreement with the Company or QTS LLC at or subsequent to the termination date, which shall be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement.

ARTICLE 5

RESTRICTIVE COVENANTS

5.1 Non-Competition . The Executive agrees that for the period during which the Executive is employed by, or serving as an officer of the Company, the General Partner or

QTS LLC or any of their direct or indirect subsidiaries (collectively, the “ Quality Companies ”), and for one year thereafter (the “ Restricted Period ”), the Executive will not, (a) directly or indirectly, engage in any business involving the development, construction, acquisition, ownership or operation of data center properties, colocation facilities and/or the provision of managed services in the application hosting industry, whether such business is conducted by the Executive individually or as a principal, partner, member, stockholder, joint venturer, director, trustee, officer, employee, consultant, advisor or independent contractor of any Person (as defined below) or (b) own any interests in any data center facilities, colocation facilities or managed service providers in the application hosting industry, in each case in the United States of America; provided , however , that this Section 1 shall not be deemed to prohibit the direct or indirect ownership by the Executive of up to five (5) percent of the outstanding equity interests of any public company. For purposes of this Agreement, “ Person ” means any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity.

5.2 Non-Solicitation . The Executive agrees that for the period during which the Executive is employed by, or serving as an officer of the Quality Companies, and for one year thereafter, the Executive will not directly or indirectly (a) solicit, induce or encourage any employee (other than clerical employees) or independent contractor to terminate their employment with the Quality Companies or to cease rendering services to the Quality Companies, and the Executive shall not initiate discussions with any such Person for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other Person, (b) solicit, recruit, induce for employment or hire (on behalf of the Executive or any other person or entity) any employee (other than clerical employees) or independent contractor who has left the employment or other service of the Quality Companies (or any predecessor thereof) within one year of the termination of such employee’s or independent contractor’s employment or other service with the Quality Companies or (c) solicit any of the Quality Companies’ tenants to lease, purchase or otherwise occupy data center space in the United States of America or encourage any of the Quality Companies’ tenants to reduce its patronage of these entities.

5.3 Reasonable and Necessary Restrictions . The Executive acknowledges that the restrictions, prohibitions and other provisions hereof, including, without limitation, the Restricted Period set forth in Section 1, are reasonable, fair and equitable in terms of duration, scope and geographic area, as are necessary to protect the legitimate business interests of the Quality Companies, and are a material inducement to these parties to enter into this Agreement.

5.4 Specific Performance . The Executive acknowledges that the obligations undertaken by the Executive pursuant to this Agreement are unique and that the Quality Companies likely will have no adequate remedy at law if the Executive shall fail to perform any of the Executive’s obligations hereunder, and the Executive therefore confirms that the right to specific performance of the terms of this Agreement is essential to protect the rights and interests of the Quality Companies. Accordingly, in addition to any other remedies that the Quality Companies may have at law or in equity, these entities shall have the right to have all obligations, covenants, agreements and other provisions of this Agreement specifically performed by the Executive, and the Quality Companies shall have the right to

obtain preliminary and permanent injunctive relief to secure specific performance and to prevent a breach or contemplated breach of this Agreement by the Executive. The Executive hereby acknowledges and agrees that the Quality Companies shall not be required to post bond as a condition to obtaining or exercising such remedies, and the Executive hereby waives any such requirement or condition.

5.5 Miscellaneous Provisions .

5.5.1 Obligation to Maintain Confidentiality . Executive acknowledges that, by reason of Executive’s employment by QTS LLC and position with the Company and the General Partner, the Executive will have access to confidential information (collectively, “ Confidential Information ”) of the Quality Companies. Executive acknowledges that such Confidential Information is a valuable and unique asset of the Quality Companies and covenants that, both during and after the Term, Executive shall not disclose any Confidential Information to any person, partnership, corporation, limited liability company, or any other entity (each, a “ Person ”) (except as Executive’s duties as a manager, or employee of the Company and the OP require) without the prior written authorization of the Board. The obligation of confidentiality imposed by this Section 5.1 shall not apply to Confidential Information that otherwise becomes known to the public through no act of Executive in breach of this Agreement or which is required to be disclosed by court order, applicable law or regulatory requirements, nor shall it apply to Executive’s disclosure of Confidential Information to his attorneys and advisors in connection with a dispute between Executive and a Quality Company.

5.5.2 Company Property . All records, designs, business plans, financial statements, customer lists, manuals, memoranda, lists, research and development plans, Intellectual Property and other property delivered to or compiled by Executive by or on behalf of any Quality Company or its providers, clients or customers that pertain to the business of any Quality Company shall be and remain the property of such Quality Company and be subject at all times to its discretion and control. Likewise, all correspondence, reports, records, charts, advertising materials and other similar data pertaining to the business, activities, research and development, Intellectual Property or future plans of a Quality Company that is collected by the Executive shall be delivered promptly to such Quality Company without request by it upon termination of Executive’s employment for any reason. For purposes of this Section

5.5.3 “ Intellectual Property ” shall mean patents, copyrights, trademarks, trade dress, trade secrets, other such rights, and any applications therefor.

5.6 Inventions . Executive is hereby retained in a capacity such that Executive’s responsibilities may include the making of technical and managerial contributions of value to the Quality Companies. Executive hereby assigns to the applicable Quality Company all rights, title and interest in such contributions and inventions made or conceived by Executive alone or jointly with others during the Term that relate to the business of such Quality Company. This assignment shall include (a) the right to file and prosecute patent applications on such inventions in any and all countries, (b) the patent applications filed and patents issuing thereon, and (c) the right to obtain copyright, trademark or trade name protection for any such work product. Executive shall promptly and fully disclose all such contributions and inventions to the Company and the OP and assist the Company and the OP or any other Quality Company, as the case may be, in obtaining and protecting the rights therein (including patents thereon), in any and all countries; provided , however , that said contributions and inventions shall be the property of the applicable Quality Company, whether or not patented or registered for copyright, trademark or trade name protection, as the case may be. Notwithstanding the foregoing, no Quality Company shall have any right, title or interest in any work product or copyrightable work developed outside of work hours and without the use of any Quality Company’s resources that does not relate to the business of any Quality Company and does not result from any work performed by Executive for any Quality Company.

5.7 Non-disparagement . Executive agrees that he will not talk about or otherwise communicate to any third parties in a malicious, disparaging, or defamatory manner regarding the Company, the General Partner, QTS LLC or any of their affiliates, owners or their past or present employees, directors, officers or other representatives and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of the Company, the OP or any of their affiliates, owners or their past or present employees, directors, officers or other representatives or their past or present employees, officers or other representatives.

The Company, the General Partner, QTS LLC will not talk about or otherwise communicate to any third parties in a malicious, disparaging, or defamatory manner regarding Executive and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of Executive. For purposes of this non-disparagement provision, the Company, the General Partner and QTS LLC are defined to mean QTS LLC’s executive team and the Board.

5.8 Cooperation . At all times during Executive’s employment and after the date of Executive’s termination of employment, Executive agrees to reasonably cooperate (if occurring after termination of employment, to the extent not interfering with Executive’s other full-time business endeavors) (i) with the Company, the General Partner and QTS LLC in the defense of any legal matter involving any matter that arose during Executive’s employment in the business of the QTS LLC and (ii) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding pertaining to the business of the Company, the General Partner or QTS LLS. QTS LLC will reimburse Executive for reasonable travel and out of pocket expenses incurred by Executive in providing such cooperation.

5.9 Reasonableness of Restrictions; Blue-Penciling . Executive has carefully read and considered the provisions of Section 5 of this Agreement, and, having done so, agrees that the restrictions set forth in such paragraphs are fair and reasonable and reasonably required for the protection of the interests of the Company, the General Partner and QTS LLC and their businesses. If any of the provisions of Section 5 shall be held to be invalid or unenforceable, the remaining provisions thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included therein. If any provision of Section 5 relating to time periods or areas of restriction shall be declared by a court of competent jurisdiction to exceed the maximum time period or areas such court deems reasonable and enforceable, said time periods and/or areas of restriction shall be deemed to become and thereafter be the maximum time period and/or areas which such court deems reasonable and enforceable.

5.10 Breach of Restrictive Covenants . The parties agree that a breach or violation of any provision of this Article 5 will result in immediate and irreparable injury and harm to the Company, the General Partner and QTS LLC and their business, and that the Company, the General Partner and QTS LLC and their affiliates shall have, in addition to any and all remedies of law and other consequences under this Agreement, the right to seek an injunction, specific performance or other equitable relief to prevent the violation of the obligations hereunder, including without limitation, to address any threatened breach or violation, and to enjoin and restrain Executive and each and every person, firm, company or corporation concerned therewith, from the violation or continuance of such violation or breach. In addition thereto, Executive shall be responsible for all damages, including reasonable attorneys’ fees, sustained by the Company, the General Partner and QTS LLC and their affiliates by reason of said violation.

ARTICLE 6

GOVERNING LAW

ARTICLE 7

MISCELLANEOUS

7.3 Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed and original, but all of which shall together constitute one and the same instrument.

7.5 Waiver or Delay . The failure or delay on the part of the Company, the General Partner, QTS LLC or any Quality Company or Executive to exercise any right or remedy, power or privilege hereunder shall not operate as a waiver thereof. A waiver, to be effective, must be in writing and signed by the party making the waiver. A written waiver of default shall not operate as a waiver of any other default or of the same type of default on a future occasion.

7.6 Successors and Assigns . This Agreement shall be binding on and shall inure to the benefit of the parties to it and their respective heirs, legal representatives, successors and assigns, except as otherwise provided herein. Neither this Agreement nor any of the rights, benefits, obligations or duties hereunder may be assigned or transferred by Executive except by operation of law. The Company, the General Partner and QTS LLC may assign this Agreement to any affiliate or successor. The Company, the General Partner and QTS LLC shall require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, the General Partner and QTS LLC to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company, the General Partner or QTS LLC would be required to perform if no such succession had taken place.

The Company, the General Partner, QTS LLC and any of thier affiliates or successors shall be jointly and severally responsible for the Company’s obligations hereunder.


To Executive:		Jeffrey Berson Address on file with the Company

With a copy to:		Mintz & Gold LLP 470 Park Avenue South, 10 ^th Floor North New York, NY 10016 Attn: Steven W. Gold, Esq.

To the Company, the General Partner or QTS LLC:		c/o QualityTech GP, LLC 12851 Foster Street, Suite 205 Overland Park, Kansas 66213 Attention: General Counsel Facsimile: (913) 814-7766

7.11 Counsel . Executive has been advised by the Company, the General Partner and QTS LLC that he should consider seeking the advice of counsel in connection with the execution of this Agreement and the other agreements contemplated hereby and Executive has had an opportunity to do so. Executive has read and understands this Agreement, and has sought the advice of counsel to the extent he has determined appropriate.

7.12 Withholding of Compensation . Executive hereby agrees that the Company, the General Partner and QTS LLC may deduct and withhold from the compensation or other amounts payable to Executive hereunder or otherwise in connection with Executive’s employment any amounts required to be deducted and withheld by QTS LLC under the provisions of any applicable Federal, state and local statute, law, regulation, ordinance or order.

7.14 D&O Insurance . The Company, the General Partner and/or QTS LLC will maintain directors’ and officers’ liability insurance during the Term and for a period of not less than six (6) years thereafter, covering acts and omissions of Executive during the Term, on terms substantially no less favorable than those in effect on the date of this Agreement. During the Term and for a period of not less than six (6) years thereafter, Executive shall receive the same benefits provided to any of the Company’s officers and directors under any additional D&O insurance or similar policy, any indemnification agreement, Company policies or the articles of organization or bylaws of the Company or the General Partner as in effect as of the date hereof, provided, however, that in the event that the benefits provided to any of the Company’s officers and directors under any of the foregoing documents or policies are enlarged after the date hereof, Executive shall receive such enlarged benefits.

7.15 Legal Fees . QTS LLC shall reimburse Executive for reasonable legal fees incurred by Executive in connection with the negotiation, preparation and execution of this Agreement up to $10,000.

7.16 Arbitration . Any dispute or controversy arising under or in connection with this Agreement other than a dispute pursuant to Section 5, shall be settled exclusively by arbitration in the State of Kansas by three arbitrators in accordance with Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association in effect at the time of submission to arbitration. Judgment may be entered on the arbitrators’ award in any court having jurisdiction. For purposes of entering any judgment upon an award rendered by the arbitrators, QTS LLC and Executive each hereby consent to the jurisdiction of any or all of the following courts: (i) the United States District Court for the State of Kansas, (ii) any of the courts of the State of Kansa, or (iii) any other court having jurisdiction. QTS LLC and Executive further agree that any service of process or notice requirements in any such proceeding shall be satisfied if the rules of such court relating thereto have been substantially satisfied. QTS LlC and Executive hereby waive, to the fullest extent permitted by applicable law, any objection which it or he may now or hereafter have to such jurisdiction and any defense of inconvenient forum. QTS LLC and Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party shall bear its or his costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 7.15; provided, however, that the party that substantially prevails in an arbitration shall be reimbursed by the other party for all reasonable costs, including reasonable attorneys’ fees and costs, incurred by such prevailing party in connection with the arbitration. Notwithstanding any provision in this Section 7.15, Executive shall be paid all compensation due and owing under this Agreement during the pendency of any dispute or controversy arising under or in connection with this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.


COMPANY

QualityTech, LP

By: QualityTech GP, LLC,
Its sole general partner

By:		/s/ Chad L. Williams
Name:		Chad L. Williams
Title:		Chief Executive Officer

GENERAL PARTNER
QualityTech GP, LLC

By:		/s/ Chad L. Williams
Name:		Chad L. Williams
Title:		Chief Executive Officer

QTS LLC
Quality Technology Services, LLC

By:		/s/ Chad L. Williams
Name:		Chad L. Williams
Title:		Chief Executive Officer

EXECUTIVE

/s/ Jeffrey Berson
Jeffrey Berson

Exhibit 10.11

AMENDMENT NO. 1 TO

EMPLOYMENT AGREEMENT

(Jeffrey Berson)

THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this “ Amendment ”) is made as of August 14, 2013 (“ Effective Date ”), by and among QualityTech, LP, a Delaware limited partnership (the “ Company ”), QualityTech GP, LLC, a Delaware limited liability company and general partner of the Company (together with any successor general partner of the Company, the “ General Partner ”), Quality Technology Services, LLC, a Delaware limited liability company and an affiliate of the Company (“ QTS LLC ”) and Jeffrey Berson, an individual (“ Executive ”), with respect to the following facts and circumstances:

RECITALS

WHEREAS, the Company, the General Partner, QTS LLC and the Executive have entered into that certain Employment Agreement, effective August 1, 2013 (the “ Employment Agreement ”), and now desire to amend the Employment Agreement on the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

1. Amendments.

(a) Section 4.3.2 of the Employment Agreement hereby is amended by inserting the following new clause (c) and re-numbering the remaining clauses accordingly:

“(c) If not previously vested in full, the Equity Awards and any other equity awards granted to Executive following the date hereof that otherwise would vest during the then-current term of this Agreement (whether the initial term or any renewal term) shall fully vest as of the Termination Date;”

(b) Section 4.3.2 of the Employment Agreement hereby is amended by deleting existing clause (e) therefrom and replacing such clause with the following new clause (f):

“(f) If not previously vested in full, the Equity Awards initially granted to Executive on the date hereof shall fully vest as of the Termination Date.”

(c) The Employment Agreement hereby is amended by deleting Section 4.3.3 and replacing such section with the following new Section 4.3.3:

“4.3.3 Termination Due to Death or Disability . In the event that Executive’s employment is terminated due to Executive’s death or Disability the Company shall pay all Accrued Obligations to Executive or Executive’s estate in a lump sum in cash within thirty (30) business days after the Termination Date. In addition, if not previously vested in full, the Equity Awards and any other equity awards granted to Executive shall fully vest as of the Termination Date.”

(d) The Employment Agreement hereby is amended by adding new Section 4.6 immediately following Section 4.5:

4.6 (“ Underpayments ”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Executive, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Executive must repay to the Company, without interest, the amount of the Overpayment; provided , however , that no amount will be payable by the Executive to the Company unless, and then only to the extent that, the payment would either reduce the amount on which the Executive is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Executive and the Company of that determination and the amount of that Underpayment will be paid to the Executive promptly by the Company.

2. Employment Agreement Unchanged. Except as modified by this Amendment, all terms and conditions of the Employment Agreement shall remain in full force and effect and shall be unaffected hereby.

3. Governing Law. This Amendment, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Kansas, but not including the choice-of-law rules thereof.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

IN WITNESS WHEREOF, each of the undersigned has executed and delivered this Amendment, or caused this Amendment to be duly executed on its behalf, as of the date first set forth above.


COMPANY

QUALITYTECH, LP

By:	QUALITYTECH GP, LLC, its sole general partner

	By:	/s/ William H. Schafer
		Name:	William H. Schafer
		Title:	Chief Financial Officer

GENERAL PARTNER

QUALITYTECH GP, LLC

By:	/s/ William H. Schafer
Name:	William H. Schafer
Title:	Chief Financial Officer

QTS LLC

QUALITY TECHNOLOGY SERVICES, LLC

By:	/s/ William H. Schafer
Name:	William H. Schafer
Title:	Chief Financial Officer

EXECUTIVE

/s/ Jeffrey Berson
JEFFREY BERSON

Exhibit 10.12

EMPLOYMENT AGREEMENT

(Shirley E. Goza)

THIS EMPLOYMENT AGREEMENT (the “ Agreement ”) is made as of August 14, 2013 (“ Effective Date ”), by and among QualityTech, LP, a Delaware limited partnership (the “ Company ”), QualityTech GP, LLC, a Delaware limited liability company and general partner of the Company (together with any successor general partner of the Company, the “ General Partner ”), Quality Technology Services, LLC, a Delaware limited liability company and an affiliate of the Company (“ QTS LLC ”), and Shirley E. Goza, an individual (“ Executive ”), with respect to the following facts and circumstances:

RECITALS

WHEREAS, the Company desires for QTS to employ Executive as the Company’s General Counsel (“ General Counsel ”) and for the Executive to be appointed General Counsel of the General Partner and QTS LLC, and Executive desires to accept such employment and appointments, on the terms set forth below.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE 1

EMPLOYMENT, TERM AND DUTIES

1.1 Employment . During the Term (defined below), QTS LLC shall employ Executive as the General Counsel of the Company, upon the terms and conditions set forth in this Agreement, and Executive shall report directly to the Chief Executive Officer of the Company (the “ CEO ”), unless otherwise determined by the Board of Managers (or Board of Directors or other comparable governing body, as applicable) of the General Partner (the “ Board ”). In addition, during the Term, Executive shall serve as the General Counsel of the General Partner and QTS LLC and shall report to the Chief Executive Officer of the General Partner, unless determined otherwise by the Board.

1.2 Term . QTS LLC shall employ Executive, and Executive shall serve as the General Counsel of the Company, commencing upon the Effective Date and continuing thereafter for a two (2)-year term (the “ Term ”), unless earlier terminated under Article 4 ; provided that the Term shall automatically renew for additional one (1)-year periods unless QTS LLC or Executive gives notice of non-renewal at least thirty (30) days prior to expiration of the Term (as it may have been extended by any renewal period).

1.3 Duties . Executive shall perform all the duties and obligations reasonably associated with the position of General Counsel and consistent with the Bylaws or other governing documents of the Company as in effect from time to time, subject to the supervision of the CEO, and shall perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the CEO (including the performance of services for any subsidiary or affiliate of the Company without any additional compensation). Executive shall perform the duties contemplated herein faithfully and diligently.

Executive shall devote substantially all of her business time and effort to the performance of Executive’s duties hereunder and to the business affairs of the Company; provided that in no event shall this provision prohibit Executive from (i) performing social, civic, charitable and religious activities, (ii) managing personal investments and affairs, (iii) participating in educational or professional associations, or (iv) any other activities approved by the CEO, so long as the activities set forth in clauses (i) through (iv) above do not materially and adversely interfere with Executive’s duties and obligations hereunder or to the business affairs of the Company.

ARTICLE 2

COMPENSATION

2.1 Salary . In consideration for Executive’s services hereunder, QTS LLC shall pay Executive an annual salary at the rate of $250,000 per year during each of the years of the Term (“ Base Pay ”), payable in accordance with QTS LLC’s regular payroll schedule from time to time (less any deductions required for Social Security, state, federal and local withholding taxes, and any other authorized or mandated similar withholdings). The Base Pay shall be reviewed by the Compensation Committee of the Board (the “ Compensation Committee ”), no less frequently than annually. Executive will have the opportunity to earn a bonus to be paid in accordance with QTS LLC’s regular bonus payment schedule. Executive is eligible for a target bonus equal to 50% of her Base Pay based upon her performance and the performance of the Company (“ Target Bonus ”).

2.2 Equity Award . Executive previously has received 86,875 Class O LTIP Units of QualityTech Employee Pool, LLC (“ Equity Awards ”). The Equity Awards are subject to a four (4)-year vesting schedule and will become 100% vested upon either the occurrence of a “Change of Control” as defined in the QualityTech, LP 2010 Equity Incentive Plan (together with any successor plan thereto, the “ Plan ”) or as otherwise provided in this Agreement. The Equity Awards are in the form of partnership “profits interest” units and, accordingly, require Executive to complete a form Section 83(b) election. Additional equity awards may be made pursuant to the Plan in accordance with the Company’s policies and as deemed appropriate by the Compensation Committee of the Board.

ARTICLE 3

EXECUTIVE BENEFITS

3.1 Vacation . Executive shall be entitled to four (4) weeks paid vacation each calendar year in accordance with the general policies of QTS LLC and the Company applicable generally to other senior executives of the Company.

3.2 Employee Benefits . Executive shall receive all group insurance and retirement plan benefits and any other benefits on the same basis as are available to other senior executives of the Company under the personnel policies in effect from time to time. Executive shall receive all other such fringe benefits as QTS LLC and the Company may offer to other senior executives under personnel policies in effect from time to time, such as health and disability insurance coverage and paid sick leave.

3.3 Reimbursement for Expenses . Executive shall be reimbursed for all documented reasonable expenses incurred by Executive in the performance of her duties or otherwise in furtherance of the business of the Company in accordance with the reimbursement policies in effect from time to time. Any reimbursement under this Section 3.3 that is taxable to Executive shall be made by December 31 of the calendar year following the calendar year in which Executive incurred the expense.

ARTICLE 4

TERMINATION

4.1 Grounds for Termination .

4.1.1 Death or Disability . Executive’s employment shall terminate immediately in the event of Executive’s death or Disability. “Disability” means any: (i) physical disability or impairment, (ii) mental disability or impairment, (iii) illness or (iv) injury, that, in the good-faith judgment of the CEO, substantially prevents Executive from performing her duties and obligations under this Agreement or participating effectively and actively in the management of the Company for more than three consecutive months or for more than 90 days in any 180-day period.

(a)

Executive’s conviction of, or pleading guilty or nolo contendere to, a crime that constitutes a felony or any lesser criminal offense involving dishonesty or moral turpitude;

(b)

any commission by Executive of an act of dishonesty, theft, fraud, or embezzlement;

(c)

any willful act by Executive that has a significant adverse effect on the reputation of the Company or any of its affiliates;

(d)

the substantial failure or refusal by Executive to perform the duties of General Counsel. It shall be a condition precedent to the Company’s right to terminate employment for Cause pursuant to this subsection (d) that the Company shall have first given Executive written notice stating with reasonable specificity the act(s) on which such termination is premised, and if such act(s) is susceptible of cure or remedy, Executive shall have sixty (60) days after receipt of such notice to cure any deficiencies; or

(e)

Executive’s material violation of the material written rules, regulations, procedures, or policies relating to the conduct of employees, directors or officers of the Company.

4.1.3 Good Reason . Executive may terminate her employment under this Agreement by giving written notice to the Company upon the occurrence of any one or more of the following events (which, for purposes of this Agreement, shall constitute “ Good Reason ”):

(a)

(b)

A material diminution in Executive’s Base Pay, as in effect from time to time;

(c)

The Executive’s place of employment is moved more than fifty (50) miles from the Company’s current location in Overland Park, Kansas; or

(d)

The failure of a successor to the assets or business of the Company to assume the obligations of the Company under this Agreement.

It shall be a condition precedent to Executive’s right to terminate her employment for Good Reason that (a) she shall have first given the Company written notice stating with reasonable specificity the act(s) on which such termination is premised within forty-five (45) days after Executive becomes aware of such act(s), (b) if such act(s) is susceptible of cure or remedy, it has not been cured or remedied within thirty (30) days after receipt of such notice, and (c) Executive has terminated her employment within forty-five (45) days after so notifying the Company.

4.2 Termination Date . Except as provided in Section 4.1.1 with respect to Executive’s death or Disability, any termination under Section 4.1 shall be effective upon receipt of notice by Executive or QTS LLC, as the case may be, of such termination or upon such other later date as may be provided herein or specified by QTS LLC or Executive in the notice (the “ Termination Date ”).

4.3 Effect of Termination .

4.3.1 Termination with Cause or without Good Reason . In the event that Executive’s employment is terminated by QTS LLC with Cause or by Executive without Good Reason, QTS LLC shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by applicable law. “ Accrued Obligations ” means the sum of (a) Executive’s Base Pay hereunder through the Termination Date to the extent not theretofore paid, (b) the amount of any accrued but unused vacation pay, and (c) any business expense reimbursements incurred by Executive as of the Termination Date and submitted for reimbursement, in each case, consistent with the policy for such reimbursements, within ten (10) days following the Termination Date.

4.3.2 Termination without Cause or with Good Reason . In the event that Executive’s employment is terminated by QTS LLC without Cause or by Executive for Good Reason:

(a)

QTS LLC shall pay all Accrued Obligations to Executive in a lump sum in cash within twenty (20) days after the Termination Date or on such earlier date required by law;

(b)

QTS LLC shall pay to Executive, in a lump sum in cash in on the first payroll date following sixty (60) days after the Termination Date one (1) year of Executive’s Base Pay plus the Target Bonus as in effect on the Termination Date;

(c)

QTS LLC shall pay to Executive, in a lump sum in cash on the first payroll date following sixty (60) days after the Termination Date all bonus amounts earned but not yet paid for the year prior to the year in which the Termination Date occurs;

(d)

If not previously vested in full, the Equity Awards and any other equity awards granted to Executive that otherwise would vest during the then-current term of this Agreement (whether the initial term or any renewal term) shall fully vest as of the Termination Date;

(e)

If Executive elects COBRA coverage, QTS LLC shall reimburse Executive for her premiums for such coverage for a period of twelve (12) months; and

(f)

QTS LLC shall provide to Executive, at QTS LLC’s expense, with outplacement services and support, the scope and provider of which will be selected by Executive, for a period of one (1) year follow the Termination Date.

4.3.3 Termination Due to Death or Disability . In the event that Executive’s employment is terminated due to Executive’s death or Disability QTS LLC shall pay all Accrued

Obligations to Executive or Executive’s estate in a lump sum in cash within thirty (30) business days after the Termination Date. In addition, if not previously vested in full, the Equity Awards and any other equity awards granted to Executive shall fully vest as of the Termination Date.

4.3.4 Waiver and Release Agreement . In consideration of the severance payments and other benefits described in clauses (b), (c), (d) and (e) of Section 4.3.2 , to which severance payments and benefits Executive would not otherwise be entitled, and as a precondition to Executive becoming entitled to such severance payments and other benefits under this Agreement, Executive agrees to execute and deliver to QTS LLC on or before the sixtieth (60 ^th ) day after the applicable Termination Date a waiver and general release of claims in favor of the Company, the General Partner (and any successor general partner of the Company) and QTS LLC, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, in a form reasonably satisfactory to QTS LLC, that has become effective in accordance with its terms, and for which any revocation periods applicable to such release shall have expired on or prior to the sixtieth (60 ^th ) day following Executive’s Termination Date. If Executive fails to execute and deliver such release agreement on or before the sixtieth (60 ^th ) day following the applicable Termination Date, if any revocation period applicable to such release has not expired on or before the sixtieth (60 ^th ) day following Executive’s Termination Date or if Executive revokes such release as provided therein, QTS LLC shall have no obligation to provide any of the severance payments and other benefits described in clauses (b), (c), (d) and (e) of Section 4.3.2 , other than any Accrued Obligations.

4.4 Required Delay For Certain Deferred Compensation and Section 409A . In the event that any compensation with respect to Executive’s termination is “deferred compensation” within the meaning of Section 409A of the Code and the regulations promulgated thereunder (“ Section 409A ”), and Executive is determined to be a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code, payment of such compensation shall be delayed as required by Section 409A. Such delay shall last six (6) months from the date of Executive’s termination, except in the event of Executive’s death. Within twenty (20) business days following the end of such six (6)-month period, or, if earlier, Executive’s death, QTS LLC shall make a catch-up payment to Executive equal to the total amount of such payments that would have been made during the six (6)-month period but for this Section 4.4 . Such catch-up payment shall bear simple interest at the prime rate of interest as published by the Wall Street Journal’s bank survey as of the first day of the six (6)-month period, which such interest shall be paid with the catch-up payment. Wherever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A. The Executive will be deemed to have a Termination Date for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A. Any amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred and any right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for another

benefit. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of QTS LLC.

4.5 Non-Exclusivity of Rights . Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by QTS LLC, the Company or its subsidiaries and for which Executive may qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any other contract or agreement with QTS LLC, the Company or its subsidiaries at or subsequent to the Termination Date, which shall be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement.

4.6 Excise Tax-Related Provisions . The payments and benefits that Executive may be entitled to receive under this Agreement and other payments and benefits that Executive is or may be entitled to receive under other plans, agreements and arrangements (which, together with the benefits provided under this Agreement, are referred to as “ Payments ”), may constitute Parachute Payments (as defined below) that are subject to Sections 280G and 4999 of the Code. As provided in this Section 4.6 , the Parachute Payments will be reduced if, and only to the extent that, a reduction will allow Executive to receive a greater Net After Tax Amount (as defined below) than Executive would receive absent a reduction.

4.6.4 As a result of the uncertainty in the application of Sections 280G and 4999 of the Code at the time that the Accounting Firm makes its determinations under this Section 4.6 , it is possible that amounts will have been paid or distributed to Executive that should not have been paid or distributed under this Section 4.6 (“ Overpayments ”), or that additional amounts should be paid or distributed to the Executive under this Section 4.6 (“ Underpayments ”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Executive, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Executive must repay to the Company, without interest, the amount of the Overpayment; provided , however , that no amount will be payable by the Executive to the Company unless, and then only to the extent that, the payment would either reduce the amount on which the Executive is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Executive and the Company of that determination and the amount of that Underpayment will be paid to the Executive promptly by the Company.

For purposes of this Section 4.6 , the term “ Accounting Firm ” means the independent accounting firm engaged by the Company immediately before a Change in Control. For purposes of this Section 4.6 , the term “ Net After Tax Amount ” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Sections 1, 3101(b) and 4999 of the Code and any State or local income taxes applicable to Executive on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment. For purposes of this Section 4.6 the term “ Parachute Payment ” means a payment that is described in Section 280G(b)(2) of the Code, determined in accordance with Section 280G of the Code and the regulations promulgated or proposed thereunder.

ARTICLE 5

RESTRICTIVE COVENANTS

5.1 Confidential Information .

5.1.1 Obligation to Maintain Confidentiality . Executive acknowledges that, by reason of Executive’s employment by QTS LLC, the Executive will have access to confidential information (collectively, “ Confidential Information ”) of QTS LLC, the Company and their respective subsidiaries and affiliates (collectively, the “ Quality Companies ”). Executive acknowledges that such Confidential Information is a valuable and unique asset of the Quality Companies and covenants that, both during and after the Term, Executive shall not disclose any Confidential Information to any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity (“ Person ”) (except as Executive’s duties as a manager, or employee of the Company and the OP require) without the prior written authorization of the Board. The obligation of confidentiality imposed by this Section 5.1 shall not apply to Confidential Information that otherwise becomes known to the public through no

act of Executive in breach of this Agreement or which is required to be disclosed by court order, applicable law or regulatory requirements, nor shall it apply to Executive’s disclosure of Confidential Information to her attorneys and advisors in connection with a dispute between Executive and a Quality Company.

5.2 Inventions . Executive is hereby retained in a capacity such that Executive’s responsibilities may include the making of technical and managerial contributions of value to the Quality Companies. Executive hereby assigns to the applicable Quality Company all rights, title and interest in such contributions and inventions made or conceived by Executive alone or jointly with others during the Term that relate to the business of such Quality Company. This assignment shall include (a) the right to file and prosecute patent applications on such inventions in any and all countries, (b) the patent applications filed and patents issuing thereon, and (c) the right to obtain copyright, trademark or trade name protection for any such work product. Executive shall promptly and fully disclose all such contributions and inventions to the Company, the General Partner and QTS LLC and assist the Company, the General Partner and QTS LLC or any other Quality Company, as the case may be, in obtaining and protecting the rights therein (including patents thereon), in any and all countries; provided , however , that said contributions and inventions shall be the property of the applicable Quality Company, whether or not patented or registered for copyright, trademark or trade name protection, as the case may be. Notwithstanding the foregoing, no Quality Company shall have any right, title or interest in any work product or copyrightable work developed outside of work hours and without the use of any Quality Company’s resources that does not relate to the business of any Quality Company and does not result from any work performed by Executive for any Quality Company.

5.3 Non-Disparagement . Executive agrees that she will not talk about or otherwise communicate to any third parties in a malicious, disparaging, or defamatory manner regarding the Company, the General Partner, QTS LLC or any other Quality Company, owners or their past or present employees, directors, officers or other representatives and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of the Company, the General Partner, QTS LLC or any other Quality Company, their owners or their past or present employees, directors, officers or other representatives or their past or present employees, officers or other representatives.

The Company, the General Partner and QTS LLC agree that they will not talk about or otherwise communicate to any third parties in a malicious, disparaging, or defamatory manner regarding Executive and will not make or authorize to be made any written or oral statement that may disparage or damage the reputation of Executive. For purposes of this non-disparagement provision, the Company, the General Partner and QTS LLC are defined to mean the Company’s executive team and the Board.

5.4 Non-Compete . The Executive agrees that for the period during which the Executive is employed by, or serving as an officer or manager or director of, the Company, the General Partner, QTS LLC or any of the Quality Companies and for one (1) year thereafter (the “ Restricted Period ”), the Executive will not, (a) directly or indirectly, engage in any business involving the development, construction, acquisition, ownership or operation of data center properties, colocation facilities and/or the provision of managed services, whether such business is conducted by the Executive individually or as a principal, partner, member, stockholder, joint venturer, director, trustee, officer, employee, consultant, advisor or independent contractor of any Person (as defined below) or (b) own any interests in any data center facilities, colocation facilities or managed service providers, in each case in the United States of America as of the Termination Date; provided , however , that this Section 5.3 shall not be deemed to prohibit the direct or indirect ownership by the Executive of up to five (5) percent of the outstanding equity interests of any public company. For purposes of this Agreement, “ Person ” means any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity.

5.5 Non-Solicitation . The Executive agrees that during the Term or otherwise for the period during which the Executive is employed by, or serving as an officer or manager or director of, the Company, the General Partner or any of the Quality Companies and for one (1) year thereafter, such Executive will not directly or indirectly (a) solicit, induce or encourage any employee (other than clerical employees) or independent contractor to terminate their employment with the Quality Companies or to cease rendering services to the Quality Companies, and the Executive shall not initiate discussions with any such Person for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other Person, (b) solicit, recruit, induce for employment or hire (on behalf of the Executive or any other person or entity) any employee (other than clerical employees) or independent contractor who has left the employment or other service of the Quality Companies (or any predecessor thereof) within one (1) year of the termination of such employee’s or independent contractor’s employment or other service with the Quality Companies or (c) solicit any of tenants of the Quality Companies to lease, purchase or otherwise occupy data center space in the United States of America or encourage any of the tenants of the Quality Companies to reduce its patronage of Quality.

5.8 Cooperation . At all times during Executive’s employment and after the date of Executive’s termination of employment, Executive agrees to reasonably cooperate (if occurring after termination of employment, to the extent not interfering with Executive’s other full-time business endeavors) (i) with the Company, the General Partner and QTS LLC in the defense of any legal matter involving any matter that arose during Executive’s employment in the business of the Company, the General Partner and QTS LLC, and (ii) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding pertaining to the business of the Company, the General Partner or QTS LLC. The Company, the General Partner or QTS LLC, as applicable, will reimburse Executive for reasonable travel and out of pocket expenses incurred by Executive in providing such cooperation.

ARTICLE 6

GOVERNING LAW

ARTICLE 7

MISCELLANEOUS

7.3 Counterparts . This Agreement may be executed in one of more counterparts, each of which shall be deemed and original, but all of which shall together constitute one and the same instrument.

7.5 Waiver or Delay . The failure or delay on the part of the Company, the General Partner, QTS LLC or Executive to exercise any right or remedy, power or privilege hereunder shall not operate as a waiver thereof. A waiver, to be effective, must be in writing and signed by the party making the waiver. A written waiver of default shall not operate as a waiver of any other default or of the same type of default on a future occasion.

7.6 Successors and Assigns . This Agreement shall be binding on and shall inure to the benefit of the parties to it and their respective heirs, legal representatives, successors and assigns, except as otherwise provided herein. Neither this Agreement nor any of the rights, benefits, obligations or duties hereunder may be assigned or transferred by Executive except by operation of law. The Company, the General Partner and QTS LLC may assign this Agreement to any affiliate or successor. The Company, the General Partner and QTS LLC shall require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, the General Partner or QTS LLC to assume expressly and agree, and the Company shall cause any successor general partner of the Company to assume expressly and agree, to perform this Agreement in the same manner and to the same extent that the Company, the General Partner and QTS LLC, as applicable, would be required to perform if no such succession had taken place.

7.8 Notices . All notices, requests, demands and other communications to be given under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service, if personally served on the party to whom notice is to be given, or 48 hours after mailing, if mailed to the party to whom notice is to be given by certified or registered mail, return receipt requested, postage prepaid, and properly addressed to the party at her address set forth as follows or any other address that any party may designate by written notice to the other parties:

To Executive:

Shirley E. Goza

Address on file with the Company

To the Company,

QTS LLC or the General Partner:

c/o QualityTech GP, LLC

12851 Foster Street, Suite 205

Overland Park, Kansas 66213

Attention: CEO

Facsimile: (913) 814-7766

7.11 Counsel . Executive has been advised by the Company, the General Partner and QTS LLC that she should consider seeking the advice of counsel in connection with the execution of this Agreement and the other agreements contemplated hereby and Executive has had an opportunity to do so. Executive has read and understands this Agreement, and has sought the advice of counsel to the extent she has determined appropriate.

7.13 Executive Representation . Executive acknowledges that by entering into or complying with any provision of this Agreement she is not breaching or acting in contravention of any other agreement or commitment she has to any other firm, corporation, partnership, organization, person or any other individual or entity.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.


COMPANY

QUALITYTECH, LP

By:	QUALITYTECH GP, LLC,
	its sole general partner

	By:	/s/ William H. Schafer
		Name:	William H. Schafer
		Title:	Chief Financial Officer

GENERAL PARTNER

QUALITYTECH GP, LLC

By:	/s/ William H. Schafer
Name:	William H. Schafer
Title:	Chief Financial Officer

QTS LLC

QUALITY TECHNOLOGY SERVICES, LLC

By:	/s/ William H. Schafer
Name:	William H. Schafer
Title:	Chief Financial Officer

EXECUTIVE

/s/ Shirley E. Goza
SHIRLEY E. GOZA

Exhibit 10.13

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “ Agreement ”) is entered into as of [ ], 2013, by and among QTS Realty Trust, Inc., a Maryland corporation (the “ Company ” or the “ Indemnitor ”) and [ ] (the “ Indemnitee ”).

WHEREAS , the Indemnitee is an officer [ or ][ and ] a member of the Board of Directors of the Company and in such [ capacity ][ capacities ] is performing a valuable service for the Company;

WHEREAS , Maryland law permits the Company to enter into contracts with its officers or members of its Board of Directors with respect to indemnification of, and advancement of expenses to, such persons;

WHEREAS , the Articles of Amendment and Restatement of the Company (the “ Charter ”) provide that the Company shall indemnify and advance expenses to its directors and officers to the maximum extent permitted by Maryland law in effect from time to time;

WHEREAS , the Amended and Restated Bylaws of the Company (the “ Bylaws ”) provide that each director and officer of the Company shall be indemnified by the Company to the maximum extent permitted by Maryland law in effect from time to time and shall be entitled to advancement of expenses consistent with Maryland law; and

WHEREAS , to induce the Indemnitee to provide services to the Company as an officer [ or ][ and ] a member of the Board of Directors, and to provide the Indemnitee with specific contractual assurance that indemnification will be available to the Indemnitee regardless of, among other things, any amendment to or revocation of the Charter or the Bylaws, or any acquisition transaction relating to the Company, the Indemnitor desires to provide the Indemnitee with protection against personal liability as set forth herein.

NOW, THEREFORE , in consideration of the premises and the covenants contained herein, the Indemnitor and the Indemnitee hereby agree as follows:

1.	DEFINITIONS

For purposes of this Agreement:

(A)

“ Change in Control ” shall have the definition set forth in the QTS Realty Trust, Inc. 2013 Equity Incentive Plan.

(B)

“ Corporate Status ” describes the status of a person who is or was a director or officer of the Company or is or was serving at the request of the Company as a

director, officer, partner (limited or general), member, employee or agent of any other foreign or domestic corporation, partnership, joint venture, limited liability company, trust, other enterprise (whether conducted for profit or not for profit) or employee benefit plan. The Company shall be deemed to have requested the Indemnitee to serve an employee benefit plan where the performance of the Indemnitee’s duties to the Company also imposes or imposed duties on, or otherwise involves or involved services by, the Indemnitee to the plan or participants or beneficiaries of the plan.

(C)

“ Determination ” means a determination that either (x) there is a reasonable basis for the conclusion that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee had met the applicable standard of conduct (a “ Favorable Determination ”) or (y) there is no reasonable basis for the conclusion that indemnification of the Indemnitee is proper in the circumstances (an “ Adverse Determination ”).

(D)

“ Disinterested Director ” means a director who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee and does not otherwise have an interest materially adverse to any interest of the Indemnitee.

(E)

“ Expenses ” shall include all attorneys’ and paralegals’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.

(F)

“ Proceeding ” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation (including any formal or informal internal investigation to which the Indemnitee is made a party by reason of the Corporate Status of the Indemnitee), administrative hearing, or any other proceeding, including appeals therefrom, whether civil, criminal, administrative, or investigative, except one initiated by the Indemnitee pursuant to paragraph 8 of this Agreement to enforce such Indemnitee’s rights under this Agreement.

(G)

“ Special Legal Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporate law and neither presently is, or in the past two years has been, retained to represent (i) the Indemnitor or the Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.

2.	INDEMNIFICATION

The Indemnitee shall be entitled to the rights of indemnification provided in this paragraph 2 and under applicable law, the Charter, the Bylaws, any other agreement, a vote of stockholders or resolution of the Board of Directors or otherwise if, by reason of such Indemnitee’s Corporate Status, such Indemnitee is, or is threatened to be made, a party to any threatened, pending, or contemplated Proceeding, including a Proceeding by or in the right of the Company. Unless prohibited by paragraph 13 hereof and subject to the other provisions of this Agreement, the Indemnitee shall be indemnified hereunder, to the maximum extent permitted by Maryland law in effect from time to time, against judgments, penalties, fines and settlements and reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection with such Proceeding or any claim, issue or matter therein; provided, however, that if such Proceeding was initiated by or in the right of the Company, indemnification may not be made in respect of such Proceeding if the Indemnitee shall have been finally adjudged to be liable to the Company. For purposes of this paragraph 2, excise taxes assessed on the Indemnitee with respect to an employee benefit plan pursuant to applicable law shall be deemed fines.

3.	INDEMNIFICATION FOR EXPENSES IN CERTAIN CIRCUMSTANCES

(A)

Without limiting the effect of any other provision of this Agreement (including the Indemnitee’s rights to indemnification under paragraph 2 and advancement of expenses under paragraph 4), without regard to whether the Indemnitee is entitled to indemnification under paragraph 2 and without regard to the provisions of paragraph 6 hereof, to the extent that the Indemnitee is successful, on the merits or otherwise, in any Proceeding to which the Indemnitee is a party by reason of such Indemnitee’s Corporate Status, such Indemnitee shall be indemnified against all reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection therewith.

(B)

If the Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues, or matters in such Proceeding, the Indemnitor shall indemnify the Indemnitee against all reasonable Expenses actually incurred by or on behalf of such Indemnitee in connection with each successfully resolved claim, issue or matter.

(C)

For purposes of this paragraph 3 and without limitation, the termination of any claim, issue or matter in such Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

4.	ADVANCEMENT OF EXPENSES

Notwithstanding anything in this Agreement to the contrary, but subject to paragraph 13 hereof, if the Indemnitee is or was or becomes a party to or is otherwise involved in any Proceeding (including as a witness), or is or was threatened to be made a party to or a participant (including as a witness) in any such Proceeding, by reason of the Indemnitee’s Corporate Status, or by reason of (or arising in part out of) any actual or alleged event or occurrence related to the

Indemnitee’s Corporate Status, or by reason of any actual or alleged act or omission on the part of the Indemnitee taken or omitted in or relating to the Indemnitee’s Corporate Status, then the Indemnitor shall advance all reasonable Expenses incurred by the Indemnitee in connection with any such Proceeding within twenty (20) days after the receipt by the Indemnitor of a statement from the Indemnitee requesting such advance from time to time, whether prior to or after final disposition of such Proceeding; provided that, such statement shall reasonably evidence the Expenses incurred or to be incurred by the Indemnitee and shall include or be preceded or accompanied by (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Indemnitor as authorized by this Agreement has been met and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amounts advanced if it should ultimately be determined that the standard of conduct has not been met. The undertaking required by clause (ii) of the immediately preceding sentence shall be an unlimited general obligation of the Indemnitee but need not be secured and may be accepted without reference to financial ability to make the repayment.

5.	WITNESS EXPENSES

Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of such Indemnitee’s Corporate Status, a witness (or is forced or asked to respond to discovery requests) for any reason in any Proceeding to which such Indemnitee is not a named defendant or respondent, the Indemnitor shall advance all Expenses actually incurred by or on behalf of such Indemnitee, on an as-incurred basis in accordance with paragraph 4 of this Agreement, in connection therewith and indemnify the Indemnitee therefor.

6.	DETERMINATION OF ENTITLEMENT TO AND AUTHORIZATION OF INDEMNIFICATION

(A)

To obtain indemnification under this Agreement, the Indemnitee shall submit to the Indemnitor a written request, including therewith such documentation and information reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.

(B)

The Indemnitor agrees that the Indemnitee shall be indemnified to the fullest extent permitted by law. Indemnification under this Agreement may not be made unless authorized for a specific Proceeding after a Determination has been made in accordance with this paragraph 6(B) that indemnification of the Indemnitee is permissible in the circumstances because the Indemnitee has met the following standard of conduct: the Indemnitor shall indemnify the Indemnitee in accordance with the provisions of paragraph 2 hereof, unless it is established that: (a) the act or omission of the Indemnitee was material to the matter giving rise to the Proceeding and (x) was committed in bad faith or (y) was the result of active and deliberate dishonesty; (b) the Indemnitee actually received an improper personal benefit in money, property or services; or (c) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or

omission was unlawful. Any Determination shall be made within thirty (30) days after receipt of the Indemnitee’s written request for indemnification pursuant to Section 6(A) and such Determination shall be made either (i) by the Disinterested Directors, even though less than a quorum, so long as the Indemnitee does not request that such Determination be made by Special Legal Counsel, or (ii) if so requested by the Indemnitee, in the Indemnitee’s sole discretion, by Special Legal Counsel in a written opinion to the Indemnitor and the Indemnitee. If a Determination is made that the Indemnitee is entitled to indemnification, payment to the Indemnitee shall be made within fifteen (15) business days after such Determination. The Indemnitee shall reasonably cooperate with the person, persons or entity making such Determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such Determination. Any Expenses incurred by the Indemnitee in so cooperating with the Disinterested Directors or Special Legal Counsel, as the case may be, making such determination shall be advanced and borne by the Indemnitor in accordance with paragraph 4 of this Agreement (irrespective of the Determination as to Indemnitee’s entitlement to indemnification). If the person, persons or entity empowered or selected under Section 6(B) of this Agreement to determine whether the Indemnitee is entitled to indemnification shall not have made a Favorable Determination within thirty (30) days after receipt by the Indemnitor of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent permitted by law, be deemed to have been made and the Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such thirty (30) day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(B) shall not apply if the determination of entitlement to indemnification is to be made by Special Legal Counsel pursuant to Section 6(E).

(C)

The Indemnitor shall be bound by and shall have no right to challenge a Favorable Determination. If an Adverse Determination is made, or if for any other reason the Indemnitor does not make timely indemnification payments or advancement of Expenses required by this Agreement, the Indemnitee shall have the right to commence a Proceeding before a court of competent jurisdiction to challenge such Adverse Determination and/or to require the Indemnitor to make such

payments or advancement of expenses (and the Indemnitor shall have the right to defend their position in such Proceeding and to appeal any adverse judgment in such Proceeding). The Indemnitee shall be entitled to have such Expenses advanced by the Indemnitor in accordance with paragraph 4 of this Agreement and applicable law. If the Indemnitee fails to challenge an Adverse Determination within ninety (90) business days, or if Indemnitee challenges an Adverse Determination and such Adverse Determination has been upheld by a final judgment of a court of competent jurisdiction from which no appeal can be made, then, to the extent and only to the extent required by such Adverse Determination or final judgment, the Indemnitor shall not be obligated to indemnify the Indemnitee under this Agreement.

(D)

The Indemnitee shall cooperate with the person or entity making such Determination with respect to the Indemnitee’s entitlement to indemnification, including providing upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination. Any reasonable costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by the Indemnitee in so cooperating shall be borne by the Indemnitor (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Indemnitor hereby indemnifies and agrees to hold the Indemnitee harmless therefrom.

(E)

In the event the determination of entitlement to indemnification is to be made by Special Legal Counsel pursuant to Section 6(B) hereof, the Indemnitee, or the Indemnitor, as the case may be, may, within seven days after such written notice of selection shall have been given, deliver to the Indemnitor or to the Indemnitee, as the case may be, a written objection to such selection. Such objection may be asserted only on the grounds that the Special Legal Counsel so selected does not meet the requirements of “Special Legal Counsel” as defined in paragraph 1 of this Agreement. If such written objection is made, the Special Legal Counsel so selected may not serve as Special Legal Counsel until a court has determined that such objection is without merit. If, within twenty (20) days after submission by the Indemnitee of a written request for indemnification pursuant to Section 6(A) hereof, no Special Legal Counsel shall have been selected or, if selected, shall have been objected to, either the Indemnitor or the Indemnitee may petition a court for resolution of any objection which shall have been made by the Indemnitor or the Indemnitee to the other’s selection of Special Legal Counsel and/or for the appointment as Special Legal Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom an objection is so resolved or the person so appointed shall act as Special Legal Counsel under Section 6(B) hereof. The Indemnitor shall pay all reasonable fees and expenses of Special Legal Counsel incurred in connection with acting pursuant to Section 6(B) hereof, and all reasonable fees and expenses

incident to the selection of such Special Legal Counsel pursuant to this Section 6(D). In the event that a determination of entitlement to indemnification is to be made by Special Legal Counsel and such determination shall not have been made and delivered in a written opinion within ninety (90) days after the receipt by the Indemnitor of the Indemnitee’s request in accordance with Section 6(A), upon the due commencement of any judicial proceeding in accordance with Section 8(A) of this Agreement, Special Legal Counsel shall be discharged and relieved of any further responsibility in such capacity.

(F)

If the person or entity making the determination whether the Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Indemnitor of the request therefor, the requisite Determination of entitlement to indemnification shall be deemed to have been made and the Indemnitee shall be entitled to such indemnification, absent: (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law. Such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the person or entity making said determination in good faith requires additional time for the obtaining or evaluating of documentation and/or information relating thereto. The foregoing provisions of this Section 6(E) shall not apply if the determination of entitlement to indemnification is to be made by Special Legal Counsel pursuant to Section 6(B) of this Agreement.

7.	PRESUMPTIONS

(A)

It shall be presumed that the Indemnitee is entitled to indemnification under this Agreement (notwithstanding any Adverse Determination), and the Indemnitor or any other person or entity challenging such right shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.

(B)

The termination of any Proceeding by conviction, or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

8.	REMEDIES

(A)

In the event that: (i) an Adverse Determination is made, or (ii) advancement of reasonable Expenses is not timely made pursuant to this Agreement, or (iii) payment of indemnification due the Indemnitee under this Agreement is not timely made, the Indemnitee shall be entitled to an adjudication in an appropriate court of competent jurisdiction of such Indemnitee’s entitlement to such indemnification or advancement of Expenses.

(B)

In the event that an Adverse Determination shall have been made pursuant to Section 6(B) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this paragraph 8 shall be conducted in all respects as a de novo trial, or arbitration, on the merits. The fact that an Adverse Determination has been made earlier pursuant to paragraph 6 of this Agreement that the Indemnitee was not entitled to indemnification shall not be taken into account in any judicial proceeding commenced pursuant to this paragraph 8 and (i) the Indemnitee shall not be prejudiced in any way by reason of that Adverse Determination and (ii) the Indemnitor shall have the burden of proving that the Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(C)

If a Favorable Determination shall have been made or deemed to have been made pursuant to Section 6(B) of this Agreement that the Indemnitee is entitled to indemnification, the Indemnitor shall be bound by such Determination in any judicial proceeding or arbitration commenced pursuant to this paragraph 8, absent: (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(D)

The Indemnitor shall be precluded from asserting in any judicial proceeding commenced pursuant to this paragraph 8 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Indemnitor is bound by all the provisions of this Agreement.

(E)

In the event that the Indemnitee, pursuant to this paragraph 8, seeks a judicial adjudication of such Indemnitee’s rights under, or to recover damages for breach of, this Agreement, if successful on the merits or otherwise as to all or less than all claims, issues or matters in such judicial adjudication, the Indemnitee shall be entitled to recover from the Indemnitor, and shall be indemnified by the Indemnitor against, any and all reasonable Expenses actually incurred by such Indemnitee in connection with each successfully resolved claim, issue or matter.

(F)

Notwithstanding anything in this Agreement to the contrary, no Determination as to entitlement of the Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

9.	NOTIFICATION AND DEFENSE OF CLAIMS

The Indemnitee agrees promptly to notify the Indemnitor in writing upon being served with any summons, citation, subpoena, complaint, indictment, information, or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder, but the failure so to notify the Indemnitor will not relieve the Indemnitor from any liability that the Indemnitor may have to Indemnitee under this Agreement unless the Indemnitor can establish that such omission to notify resulted in actual and material prejudice to which it cannot be reversed or otherwise eliminated without any material adverse effect on the Indemnitor. With respect to any such Proceeding as to which Indemnitee notifies the Indemnitor of the commencement thereof:

(A)

The Indemnitor will be entitled to participate therein at its own expense.

(B)

Except as otherwise provided below, the Indemnitor will be entitled to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee. After notice from the Indemnitor to Indemnitee of the Indemnitor’s election to assume the defense thereof, the Indemnitor will not be liable to Indemnitee under this Agreement for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. The Indemnitee shall have the right to employ Indemnitee’s own counsel in such Proceeding, but the fees and disbursements of such counsel incurred after notice from the Indemnitor of the Indemnitor’s assumption of the defense thereof shall be at the expense of Indemnitee unless (a) the employment of counsel by the Indemnitee has been authorized by the Indemnitor, (b) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Indemnitor and the Indemnitee in the conduct of the defense of such action, (c) such Proceeding seeks penalties or other relief against the Indemnitee with respect to which the Indemnitor could not provide monetary indemnification to the Indemnitee (such as injunctive relief or incarceration) or (d) the Indemnitor shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and disbursements of counsel shall be at the expense of the Indemnitor. The Indemnitor shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Indemnitor, or as to which the Indemnitee shall have reached the conclusion specified in clause (b) above, or which involves penalties or other relief against the Indemnitee of the type referred to in clause (c) above.

(C)

The Indemnitor shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any action or claim effected without the Indemnitor’s written consent. The Indemnitor shall not settle any action or claim in any manner that would impose any penalty or limitation on the Indemnitee without the Indemnitee’s written consent. Neither the Indemnitor nor Indemnitee will unreasonably withhold or delay consent to any proposed settlement.

10.	NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE SUBROGATION

(A)

The rights of indemnification and to receive advancement of reasonable Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any other agreement, a vote of stockholders, a resolution of the Board of Directors or otherwise, except that any payments otherwise required to be made by the Indemnitor hereunder shall be offset by any and all amounts received by the Indemnitee from any other indemnitor or under one or more liability insurance policies maintained by an indemnitor or otherwise and shall not be duplicative of any other payments received by an Indemnitee from the Indemnitor in respect of the matter giving rise to the indemnity hereunder; provided, however, that if indemnification rights are provided by an Additional Indemnitor as defined in Section 18(B) hereof, such Section shall govern. No amendment, alteration or repeal of this Agreement or any provision hereof shall be effective as to the Indemnitee with respect to any action taken or omitted by the Indemnitee prior to such amendment, alteration or repeal.

(B)

To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors and officers of the Company, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available and upon any Change in Control the Company shall use commercially reasonable efforts to obtain or arrange for continuation and/or “tail” coverage for the Indemnitee to the maximum extent obtainable at such time.

(C)

Except as otherwise provided in Section 18(B) hereof, in the event of any payment under this Agreement, the Indemnitor shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all actions necessary to secure such rights, including execution of such documents as are necessary to enable the Indemnitor to bring suit to enforce such rights.

(D)

Except as otherwise provided in Section 18(B) hereof, the Indemnitor shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement, or otherwise.

(E)

If GA QTS Interholdco, LLC (or any member or other affiliate thereof other than the Indemnitor) pays or causes to be paid, for any reason, any amounts with respect to any Proceeding in which the Indemnitee may be indemnified or entitled to indemnification hereunder or under any other indemnification agreement with the Indemnitee (whether pursuant to contract, by-laws, charter or other

organizational documents) or otherwise in its capacity as a stockholder of the Company, then (x) GA QTS Interholdco, LLC (or such member or other affiliate, as the case may be) shall be fully subrogated to all rights of the Indemnitee with respect to such payment and (y) the Indemnitor shall fully indemnify, reimburse and hold harmless GA QTS Interholdco, LLC (or such member and other affiliate) for all such payments actually made by GA QTS Interholdco, LLC (or such member or other affiliate).

11.	CONTINUATION OF INDEMNITY

(A)

All agreements and obligations of the Indemnitor contained herein shall continue during the period the Indemnitee is an officer or a member of the Board of Directors of the Company and shall continue thereafter so long as the Indemnitee shall be subject to any threatened, pending or completed Proceeding by reason of such Indemnitee’s Corporate Status and during the period of statute of limitations for any act or omission occurring during the Indemnitee’s term of Corporate Status. This Agreement shall be binding upon the Indemnitor and its respective successors and assigns and shall inure to the benefit of the Indemnitee and such Indemnitee’s heirs, executors and administrators.

(B)

The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance reasonably satisfactory to the Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

12.	SEVERABILITY

If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality, and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provisions held invalid, illegal or unenforceable.

13.	EXCEPTIONS TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES

Notwithstanding any other provisions of this Agreement, the Indemnitee shall not be entitled to indemnification or advancement of reasonable Expenses under this Agreement with respect to (i) any Proceeding initiated by such Indemnitee against the Indemnitor other than a proceeding commenced pursuant to paragraph 8 hereof, or (ii) any Proceeding for an accounting of profits arising from the purchase and sale by Indemnitee of securities of the Company in violation of Section 16(b) of the Exchange Act, rules and regulations promulgated thereunder, or any similar provisions of any federal, state or local statute.

14.	NOTICE TO THE COMPANY STOCKHOLDERS

Any indemnification of, or advancement of reasonable Expenses, to an Indemnitee in accordance with this Agreement, if arising out of a Proceeding by or in the right of the Company, shall be reported in writing to the stockholders of the Company with the notice of the next Company stockholders’ meeting or prior to the meeting.

15.	HEADINGS

The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

16.	MODIFICATION AND WAIVER

No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by each of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

17.	NOTICES

All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand or by a nationally recognized overnight delivery service and received by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, if so delivered or mailed, as the case may be, to the following addresses:

If to the Indemnitee, to the address set forth in the records of the Company.

If to the Indemnitor, to:

QTS Realty Trust, Inc.

12851 Foster Street

Overland Park, KS 66213

Attention: General Counsel

or to such other address as may have been furnished to the Indemnitee by the Indemnitor or to the Indemnitor by the Indemnitee, as the case may be.

18.	CONTRIBUTION

(A)

To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, penalties, fines and settlements and reasonable expenses actually incurred by or on behalf of an Indemnitee, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

(B)

The Company acknowledges and agrees that as between the Company and any other entity that has provided indemnification rights in respect of Indemnitee’s service as a director of the Company at the request of such entity (an “ Additional Indemnitor ”), the Company shall be primarily liable to Indemnitee as set forth in this Agreement for any indemnification claim (including, without limitation, any claim for advancement of Expenses) by Indemnitee in respect of any Proceeding for which Indemnitee is entitled to indemnification hereunder. In the event the Additional Indemnitor is liable to any extent to Indemnitee by virtue of indemnification rights provided by the Additional Indemnitor to Indemnitee in respect of Indemnitee’s service on the Board of Directors at the request of the Additional Indemnitor and Indemnitee is also entitled to indemnification under this Agreement (including, without limitation, for advancement of Expenses) as a result of any Proceeding, the Company shall pay, in the first instance, the entire amount of any indemnification claim (including, without limitation, any claim for advancement of Expenses) brought by the Indemnitee against the Company under this Agreement (including, without limitation, any claim for advancement of Expenses) without requiring the Additional Indemnitor to contribute to such payment and the Company hereby waives and relinquishes any right of contribution, subrogation or any other right of recovery of any kind it may have against the Additional Indemnitor in respect thereof. The Company further agrees that no advancement or payment by the Additional Indemnitor on behalf of Indemnitee with respect to any claim for which Indemnitee has sought

indemnification from the Company shall affect the foregoing and the Additional Indemnitor shall be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Indemnitee against the Company. Without limiting the generality of the foregoing, the Company hereby acknowledges that certain of its Directors, including the Directors affiliated with GA QTS Interholdco, LLC (the “ Specified Directors ”), may have certain rights to indemnification and advancement of expenses provided by GA QTS Interholdco, LLC and certain of its Affiliates (collectively, the “ General Atlantic Indemnitors ”), which shall constitute Additional Indemnitors for purposes of this paragraph. To the extent the Indemnitee is a Specified Director, the Company hereby agrees and acknowledges that with respect to matters for which it is required to provide indemnity pursuant to the terms of this Agreement, (i) it shall be the indemnitor of first resort with respect to the Indemnitee (i.e., its obligations to the Indemnitee are primary and any obligation of the General Atlantic Indemnitors to advance expenses or to provide indemnification for expenses or liabilities incurred by the Indemnitee are secondary), (ii) it shall advance the full amount of expenses incurred and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by the Indemnitee to the extent required by the terms of this Agreement (or any other agreement between the Company and the Indemnitee), without regard to any rights the Specified Directors may have against the General Atlantic Indemnitors and (iii) it irrevocably waives, relinquishes and releases the General Atlantic Indemnitors from any and all claims against the General Atlantic Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof related to the Company’s obligations set forth in clauses (i) and (ii) in this sentence. The Company further agrees that no advancement or payment by the General Atlantic Indemnitors on behalf of the Indemnitee with respect to any claim for which the Indemnitee has sought indemnification from the Company shall affect the foregoing and the General Atlantic Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Indemnitee against the Company.

19.	GOVERNING LAW

The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without application of the conflict of laws principles thereof.

20.	NO ASSIGNMENTS

The Indemnitee may not assign its rights or delegate obligations under this Agreement without the prior written consent of the Indemnitor. Any assignment or delegation in violation of this paragraph 20 shall be null and void.

21.	NO THIRD PARTY RIGHTS

Except for the rights of an Additional Indemnitor under paragraph 18(B) hereof and except for GA QTS Interholdco, LLC, who is expressly made a third party beneficiary of paragraph 10(E) hereof: (a) nothing expressed or referred to in this Agreement will be construed to give any person other than the parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement; and (b) this Agreement and all of its provisions are for the sole and exclusive benefit of the parties to this Agreement and their successors and permitted assigns.

22.	COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together constitute an agreement binding on all of the parties hereto.

[Signature page follows]

IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the day and year first above written.


QTS REALTY TRUST, INC.

By:
Name:
Title:

INDEMNITEE:

By:
Name:

Exhibit 10.14

NON-COMPETITION AGREEMENT

(James Reinhart)

This NON-COMPETITION AGREEMENT (the “ Agreement ”) is made and entered into as of June 29, 2012, by and among Quality Technology Services, LLC, a Delaware limited liability company (the “ Company ”), QualityTech GP, LLC, a Delaware limited liability company and an indirect parent and affiliate of the Company (the “ GP ”), QualityTech, LP, a Delaware limited partnership and an indirect parent and affiliate of the Company (the “ OP ”), and James Reinhart, an individual (“ Executive ”).

WHEREAS, concurrently with the execution and delivery of this Agreement, the parties hereto are entering into that certain Employment Agreement dated as of the date hereof, pursuant to which, among other things, the Company has agreed to employ the Executive as its Chief Operations Officer - Operations (“COO - Operations”), and the GP has agreed to appoint Executive as its COO - Operations, and the Executive has agreed to be employed by the Company and to serve as COO - Operations of the GP, in accordance with the terms thereof (the “ Employment Agreement ”);

WHEREAS, the Executive acknowledges that he is receiving substantial consideration pursuant to the Employment Agreement; and

WHEREAS, the parties hereto agree that the Executive will not engage in competition with the Company, the GP or the OP, and will refrain from taking certain other actions pursuant to the terms and conditions hereof in an effort to protect the legitimate business interests and goodwill of the Company, the GP and the OP, and for other business purposes.

NOW, THEREFORE, in consideration of the foregoing and in exchange for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto agree as follows:

1. Non-Competition . The Executive agrees that for the period during which the Executive is employed by, or serving as an officer of the Company, the GP, the OP or any of their direct or indirect subsidiaries (collectively, “ Quality ”), and for one year thereafter (the “ Restricted Period ”), the Executive will not, (a) directly or indirectly, engage in any business involving the development, construction, acquisition, ownership or operation of data center properties, colocation facilities and/or the provision of managed services, whether such business is conducted by the Executive individually or as a principal, partner, member, stockholder, joint venturer, director, trustee, officer, employee, consultant, advisor or independent contractor of any Person (as defined below) or (b) own any interests in any data center facilities, colocation facilities or managed service providers, in each case in the United States of America; provided , however , that this Section 1 shall not be deemed to prohibit the direct or indirect ownership by the Executive of up to five (5) percent of the outstanding equity interests of any public company. For purposes of this Agreement, “ Person ” means any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity.

2. Non-Solicitation . The Executive agrees that for the period during which the Executive is employed by, or serving as an officer of Quality, and for one year thereafter, the

Executive will not directly or indirectly (a) solicit, induce or encourage any employee (other than clerical employees) or independent contractor to terminate their employment with Quality or to cease rendering services to Quality, and the Executive shall not initiate discussions with any such Person for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other Person, (b) solicit, recruit, induce for employment or hire (on behalf of the Executive or any other person or entity) any employee (other than clerical employees) or independent contractor who has left the employment or other service of Quality (or any predecessor thereof) within one year of the termination of such employee’s or independent contractor’s employment or other service with Quality or (c) solicit any of Quality’s tenants to lease, purchase or otherwise occupy data center space in the United States of America or encourage any of Quality’s tenants to reduce its patronage of Quality.

3. Reasonable and Necessary Restrictions . The Executive acknowledges that the restrictions, prohibitions and other provisions hereof, including, without limitation, the Restricted Period set forth in Section 1, are reasonable, fair and equitable in terms of duration, scope and geographic area, as are necessary to protect the legitimate business interests of Quality, and are a material inducement to the GP and the OP to enter into this Agreement and the Employment Agreement.

4. Specific Performance . The Executive acknowledges that the obligations undertaken by the Executive pursuant to this Agreement are unique and that Quality likely will have no adequate remedy at law if the Executive shall fail to perform any of the Executive’s obligations hereunder, and the Executive therefore confirms that Quality’s right to specific performance of the terms of this Agreement is essential to protect the rights and interests of Quality. Accordingly, in addition to any other remedies that Quality may have at law or in equity, Quality shall have the right to have all obligations, covenants, agreements and other provisions of this Agreement specifically performed by the Executive, and Quality shall have the right to obtain preliminary and permanent injunctive relief to secure specific performance and to prevent a breach or contemplated breach of this Agreement by the Executive. The Executive hereby acknowledges and agrees that Quality shall not be required to post bond as a condition to obtaining or exercising such remedies, and the Executive hereby waives any such requirement or condition.

5. Miscellaneous Provisions .

5.1 Assignment; Binding Effect . This Agreement may not be assigned by the Executive, but may be assigned by the Company, the GP and the OP to any successor to its business and will inure to the benefit of and be binding upon any such successor. Subject to the foregoing provisions restricting assignment, all covenants and agreements in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors, assigns, heirs, and personal representatives.

shall not be used to limit or restrict the rights or remedies, whether express or implied, of any non-competition, non-solicitation or confidentiality policies of Quality applicable to the Executive.

5.3 Amendment . Except as otherwise expressly provided in this Agreement, no amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by each of the parties hereto.

5.4 Waivers . No waiver by a party hereto shall be effective unless made in a written instrument duly executed by the party against whom such waiver is sought to be enforced, and only to the extent set forth in such instrument. Neither the waiver by either of the parties hereto of a breach or a default under any of the provisions of this Agreement, nor the failure of either of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder shall thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights or privileges hereunder.

5.5 Severability . If fulfillment of any provision of this Agreement, at the time such fulfillment shall be due, shall transcend the limit of validity prescribed by law, then the obligation to be fulfilled shall be reduced to the limit of such validity; and if any clause or provision contained in this Agreement operates or would operate to invalidate this Agreement, in whole or in part, then such clause or provision only shall be held ineffective, as though not herein contained, and the remainder of this Agreement shall remain operative and in full force and effect. Notwithstanding the foregoing, in the event that the restrictions against engaging in competitive activity contained in this Agreement shall be determined by any court of competent jurisdiction to be unenforceable by reason of their extending for too great a period of time or over too great a geographical area or by reason of their being too extensive or unreasonable in any other respect, the Agreement shall be interpreted to extend only over the maximum period of time for which it may be enforceable and over the maximum geographical area as to which it may be enforceable and to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action and the court may limit the application of any other provision or covenant, or modify any such term, provision or covenant and proceed to enforce this Agreement as so limited or modified. To the extent necessary, the parties shall revise the Agreement and enter into an appropriate amendment to the extent necessary to implement any of the foregoing.

5.6 Governing Law; Jurisdiction . This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Kansas, but not including the choice-of-law rules thereof.

5.7 Headings . Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

5.8 Executive’s Acknowledgement . The Executive acknowledges (i) that he has had the opportunity to consult with independent counsel of his own choice concerning this Agreement, and (ii) that he has read and understands this Agreement, is fully aware of its legal effect, and has entered into it freely based on his own judgment.

5.9 Notices . All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been delivered (i) when physically received by personal delivery (which shall include the confirmed receipt of a telecopied facsimile transmission), or (ii) three business days after being deposited in the United States certified or registered mail, return receipt requested, postage prepaid or (iii) one business day after being deposited with a nationally known commercial courier service providing next day delivery service (such as Federal Express), to the following addresses:

(i)

if to the Executive, to the address set forth in the records of Quality; and

(ii)

if to the Company, the GP or the OP,

c/o QualityTech GP, LLC

12851 Foster Street, Suite 205

Overland Park, Kansas 66213

Attention: General Counsel

Facsimile: (913) 814-7766

5.10 Execution in Counterparts . To facilitate execution, this Agreement may be executed in as many counterparts as may be required. It shall not be necessary that the signature of or on behalf of each party appears on each counterpart, but it shall be sufficient that the signature of or on behalf of each party appears on one or more of the counterparts. All counterparts shall collectively constitute a single agreement.

5.11 Attorney’s Fees. The prevailing party in any suit or action brought to enforce this Agreement shall be entitled to recover its costs and expenses, including reasonable attorney’s fees, from the other party.

* * *

[SIGNATURES APPEAR ON FOLLOWING PAGE]

IN WITNESS WHEREOF, each of the undersigned has executed and delivered this Agreement, or caused this Agreement to be duly executed on its behalf, as of the date first set forth above.


COMPANY

Quality Technology Services, LLC

By:	/s/ Chad L. Williams
Name:	Chad L. Williams
Title:	CEO/ Chairman

GP

QualityTech GP, LLC

By:	/s/ Chad L. Williams
Name:	Chad L. Williams
Title:	Chief Executive Officer

OP

QualityTech, LP

By: QualityTech GP, LLC, its sole general partner

	By:	/s/ Chad L. Williams
	Name:	Chad L. Williams
	Title:	Chief Executive Officer

EXECUTIVE

/s/ James Reinhart
James Reinhart

Signature Page to James Reinhart Non-Competition Agreement

Exhibit 10.15

NON-COMPETITION AGREEMENT

(Daniel Bennewitz)

This NON-COMPETITION AGREEMENT (the “ Agreement ”) is made and entered into as of June 29, 2012, by and among Quality Technology Services, LLC, a Delaware limited liability company (the “ Company ”), QualityTech GP, LLC, a Delaware limited liability company and an indirect parent and affiliate of the Company (the “ GP ”), QualityTech, LP, a Delaware limited partnership and an indirect parent and affiliate of the Company (the “ OP ”), and Daniel Bennewitz, an individual (“ Executive ”).

WHEREAS, concurrently with the execution and delivery of this Agreement, the parties hereto are entering into that certain Employment Agreement dated as of the date hereof, pursuant to which, among other things, the Company has agreed to employ the Executive as its Chief Operations Officer - Sales (“COO - Sales”), and the GP has agreed to appoint Executive as its COO - Sales, and the Executive has agreed to be employed by the Company and to serve as COO - Sales of the GP, in accordance with the terms thereof (the “ Employment Agreement ”);

WHEREAS, the Executive acknowledges that he is receiving substantial consideration pursuant to the Employment Agreement; and

2. Non-Solicitation . The Executive agrees that for the period during which the Executive is employed by, or serving as an officer of Quality, and for one year thereafter, the Executive will not directly or indirectly (a) solicit, induce or encourage any employee (other than

clerical employees) or independent contractor to terminate their employment with Quality or to cease rendering services to Quality, and the Executive shall not initiate discussions with any such Person for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other Person, (b) solicit, recruit, induce for employment or hire (on behalf of the Executive or any other person or entity) any employee (other than clerical employees) or independent contractor who has left the employment or other service of Quality (or any predecessor thereof) within one year of the termination of such employee’s or independent contractor’s employment or other service with Quality or (c) solicit any of Quality’s tenants to lease, purchase or otherwise occupy data center space in the United States of America or encourage any of Quality’s tenants to reduce its patronage of Quality.

5. Miscellaneous Provisions .

5.2 Entire Agreement . This Agreement, the Employment Agreement, and any agreements pertaining to any other restrictive covenants governing the Executive, constitute the entire agreement between the parties hereto with respect to the matters set forth herein and supersedes and renders of no force and effect all prior oral or written agreements, commitments and understandings among the parties with respect to the matters set forth herein. This Section 5.2 shall not be used to limit or restrict the rights or remedies, whether express or implied, of any non-competition, non-solicitation or confidentiality policies of Quality applicable to the Executive.

(i)

if to the Executive, to the address set forth in the records of Quality; and

(ii)

if to the Company, the GP or the OP,

c/o QualityTech GP, LLC

12851 Foster Street, Suite 205

Overland Park, Kansas 66213

Attention: General Counsel

Facsimile: (913) 814-7766

* * *

[SIGNATURES APPEAR ON FOLLOWING PAGE]

IN WITNESS WHEREOF, each of the undersigned has executed and delivered this Agreement, or caused this Agreement to be duly executed on its behalf, as of the date first set forth above.


COMPANY

Quality Technology Services, LLC

By:	/s/ Chad L. Williams
Name:	Chad L. Williams
Title:	Chief Executive Officer

GP

QualityTech GP, LLC

By:	/s/ Chad L. Williams
Name:	Chad L. Williams
Title:	Chief Executive Officer

OP

QualityTech, LP

By:	QualityTech GP, LLC, its sole general partner

	By:	/s/ Chad L. Williams
	Name:	Chad L. Williams
	Title:	Chief Executive Officer

EXECUTIVE

/s/ Daniel Bennewitz
Daniel Bennewitz

Signature Page to Daniel Bennewitz Non-Competition Agreement

Exhibit 10.16

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of [ ], 2013 by and among QTS Realty Trust, Inc., a Maryland corporation (the “ Company ”), and the Persons listed on Schedule I hereto (the “ Holders ,” and each individually, a “ Holder ”).

WHEREAS, the Company intends to engage in various related transactions (collectively, the “ IPO Transactions ”) pursuant to which, among other things, the Company will effect an initial public offering of Class A common stock, par value $0.01 per share (the “ Common Stock ”);

WHEREAS, the Holders, including employees, officers and directors of the Company, hold, and following the IPO Transactions, will continue to hold, the Class A units of limited partnership interest (the “ Class A Units ”), or limited partnership units convertible into Class A Units, of QualityTech, LP, a Delaware limited partnership (the “ Operating Partnership ”), as set forth on Schedule I hereto;

WHEREAS, pursuant to the terms of Section 8.6 and the other related provisions of the Fifth Amended and Restated Agreement of Limited Partnership of the Operating Partnership (such agreement, as amended from time to time, the “ Partnership Agreement ”), commencing not later than one year from the beginning of the first full calendar month following the closing of the Company’s initial public offering, and subject to the various limitations contained in the Partnership Agreement and other instruments being delivered in connection with the IPO Transactions, the Holders will be entitled to redeem any Class A Units then held by them for cash or, at the Company’s election, shares of Common Stock (such shares, the “ Redemption Shares ”);

WHEREAS, the Company has agreed to grant to the Holders the registration rights described in this Agreement.

NOW, THEREFORE, the parties hereto, in consideration of the foregoing, the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, hereby agree as follows:

SECTION 1

DEFINITIONS

As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

“ Affiliate ” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such Person. For purposes of this definition, “control,” when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“ Agreement ” mean this Registration Rights Agreement, as the same may be amended, supplemented or modified in accordance with the terms hereof.

“ Black-Out Period ” has the meaning set forth in Section 2.5.

“ Board of Directors ” means the board of directors of the Company.

“ Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in Overland Park, Kansas or New York City are authorized or required by law to close.

“ Class A Units ” has the meaning set forth in the recitals to this Agreement.

“ Commission ” means the Securities and Exchange Commission or any successor agency then having jurisdiction to enforce the Securities Act.

“ Common Shares ” means shares of Class A common stock, $.01 par value per share, in the Company, including any capital stock of the Company into which such shares of common stock are reclassified or reconstituted.

“ Company ” has the meaning set forth in the preamble.

“ Designated Holder ” means each Holder, any Affiliate thereof that, after the date hereof, acquires any Registrable Securities, and permitted transferee thereof to whom Registrable Securities are transferred, to the extent that Class A Units could be transferred to such person in accordance with the Partnership Agreement (so long as such agreement is in effect).

“ Disclosure Package ” means, with respect to any offering of securities, (a) the Prospectus, (b) each Free Writing Prospectus and (c) all other information, in each case, that is deemed, under Rule 159 under the Securities Act, to have been conveyed to purchasers of securities at the time of sale of such securities (including a contract of sale).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.

“ FINRA ” means the Financial Industry Regulatory Authority.

“ Free Writing Prospectus ” means any “free writing prospectus” as defined in Rule 405 under the Securities Act.

“ Holder ” has the meaning set forth in the recitals to this Agreement.

“ Indemnified Party ” has the meaning set forth in Section 4.3.

“ Indemnifying Party ” has the meaning set forth in Section 4.3.

“ Issuer Registration Statement ” has the meaning set forth in Section 2.4.

“ Partnership ” means QualityTech, LP, a limited partnership of which the Company is the sole general partner and majority limited partner.

“ Partnership Agreement ” means that certain Fifth Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of the date hereof.

“ Person ” means a natural person, partnership (whether general or limited), trust, estate, association, corporation, limited liability company, unincorporated organization, custodian, nominee or any other individual or entity in its own or any representative capacity.

“ Prospectus ” has the meaning set forth in Section 2.4.

“ Redemption Shares ” has the meaning set forth in the recitals to this Agreement.

“ Registrable Securities ” means each of the following: (a) any and all Common Shares issued to or owned by any Designated Holder, (b) any Common Shares issued or issuable to any of the Designated Holders with respect to the Registrable Securities by way of share dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise and any Common Shares or voting common stock issuable upon conversion, exercise or exchange thereof, and (c) any Redemption Shares that have not been included in the filing of an Issuer Registration Statement as provided in Section 2 hereof, provided that if Redemption Shares have been included in the Issuer Registration Statement and the Issuer Registration Statement has not been declared effective by the Commission within 90 days after the original filing date or the Company is unable to keep such Issuer Registration Statement effective until such time as the Holders no longer own any Class A Units, such Redemption Shares shall be “Registrable Securities.”

“ Registration Expenses ” has the meaning set forth in Section 5.

“ Registration Statement ” has the meaning set forth in Section 2.4.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

“ Suspension Event ” has the meaning set forth in Section 2.4.

SECTION 2

REGISTRATION RIGHTS; ISSUER REGISTRATION STATEMENT

2.1 Grant of Rights . The Company hereby agrees that each Designated Holder shall be entitled to offer its Registrable Securities for sale pursuant to a Registration Statement, subject to the terms and conditions set forth in this Agreement (the “ Registration Rights ”).

2.2 Registrable Securities . For the purposes of this Agreement, Registrable Securities shall cease to be Registrable Securities when (a) a Registration Statement covering such Registrable Securities has been declared effective under the Securities Act by the Commission and such Registrable Securities have been disposed of pursuant to such effective Registration Statement, (b) the entire amount of the Registrable Securities owned by a Designated Holder may be sold in a single sale, in the opinion of counsel satisfactory to the Company and such Designated Holder, each in their reasonable judgment, without any limitation as to volume pursuant to Rule 144 (or any successor provision then in effect) under the Securities Act, or (c) the Registrable Securities are proposed to be sold or distributed by a Person not entitled to the Registration Rights granted by this Agreement.

2.3 Holders of Registrable Securities . A Person is deemed to be a holder of Registrable Securities whenever such Person owns of record Registrable Securities, or holds an option to purchase, or a security convertible into or exercisable or exchangeable for, Registrable Securities whether or not such acquisition or conversion has actually been effected; provided that the Company’s registration obligations under this Agreement shall be with respect to the registration of Registrable Securities and not with respect to the registration of any option to purchase, or a security convertible into or exercisable or exchangeable for, Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company may act upon the basis of the instructions, notice or election received from the registered owner of such Registrable Securities. Registrable Securities issuable upon exercise of an option or upon conversion of another security shall be deemed outstanding for the purposes of this Agreement.

2.4 Issuer Registration Statement . The Company shall use commercially reasonable efforts, during the period beginning 15 days prior to the date the Holders are first permitted to redeem their Class A Units pursuant to the Partnership Agreement and ending 15 days thereafter, to cause to be filed with the Commission a registration statement (an “ Issuer Registration Statement ”) that complies as to form in all material respects with applicable Commission rules providing for the registration of the Redemption Shares, and agrees to use reasonable best efforts to cause the Issuer Registration Statement and related prospectus to be declared and remain effective by the Commission as soon as practicable; provided if the Company, in its good faith judgment, determines that any registration should not be made or continued because the negotiation or consummation of a material transaction by the Company or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event would require additional disclosure by the Company in the Issuer Registration Statement of material information which the Company has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the Company’s reasonable determination, to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance a “ Suspension Event ”), the Company may postpone the filing of an Issuer Registration Statement or suspend the effectiveness thereof. The Company agrees to use commercially reasonable efforts to keep the Issuer Registration Statement continuously effective (including the preparation and filing of any amendments and supplements necessary for that purpose) until such time as the Holders no longer own any Redemption Shares. When the Redemption Shares are issued to the Holders pursuant to an Issuer Registration Statement, subject to the foregoing provisos, the Company shall:

(a) promptly notify the Holders: (i) when the Issuer Registration Statement, any pre-effective amendment, the prospectus or any prospectus supplement related thereto or post-effective amendment to the Issuer Registration Statement has been filed, and, with respect to the Issuer Registration Statement or any post-effective amendment, when the same has become effective, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Issuer Registration Statement or the initiation or threat of any proceedings for that purpose, and (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Redemption Shares for sale under the securities or “blue sky” laws of any jurisdiction or the initiation of any proceeding for such purpose;

(b) promptly use commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of the Issuer Registration Statement, and, if any such order suspending the effectiveness of the Issuer Registration Statement is issued, shall promptly use commercially reasonable efforts to obtain the withdrawal of such order at the earliest possible moment; and

(c) use reasonable best efforts to cause all such Redemption Shares to be listed on the national securities exchange on which the Common Shares are then listed, if the listing of Redemption Shares is then permitted under the rules of such national securities exchange; provided , that, all applicable listing requirements are satisfied.

As used herein, “ Registration Statement ” and “ Prospectus ” refer to a registration statement and related prospectus (including any preliminary prospectus) filed pursuant to the Securities Act utilized by the Company to satisfy a Designated Holder’s Registration Rights pursuant to this Agreement, including, but not limited to, an Issuer Registration Statement and related prospectus (including any preliminary prospectus) and any documents incorporated therein by reference.

2.5 Restrictions on Public Sale by Designated Holders . Each Designated Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of

the Company, directly or indirectly sell, offer to sell (including, without limitation, any short sale), grant any option or otherwise transfer or dispose of any Registrable Securities (other than to donees or Affiliates of a Designated Holder who agree to be similarly bound) within seven days prior to and for up to 90 days following the effective date of a registration statement of the Company filed under the Securities Act or the date of an underwriting agreement with respect to an underwritten public offering of the Company’s securities (the “ Black-Out Period ”); provided , however , that:

(i) all executive officers and directors of the Company then holding Common Shares shall enter into similar agreements;

(ii) the Company shall use commercially reasonable efforts to obtain similar agreements from each 5% or greater equity holders of the Company; and

(iii) the Designated Holders shall be allowed any concession or proportionate release allowed to any officer, director or other 5% or greater equity holders of the Company that entered into similar agreements.

In order to enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the Registrable Securities subject to this Section 2.5 and to impose stop transfer instructions with respect to the Registrable Securities and such other Common Shares of a Designated Holder (and the Common Shares or securities of every other person subject to the foregoing restriction) until the end of such period.

2.6 Suspension of Offering . Notwithstanding Section 2.4 hereof, if the Board of Directors, in its good faith judgment, determines that any registration should not be made or continued because of a Suspension Event, the Company may postpone the filing of a Registration Statement and, upon the approval of a majority of the Board of Directors, require the Designated Holders not to sell under the Registration Statement or to suspend the effectiveness thereof; provided , however , that the Company may not delay, suspend or withdraw the Registration Statement for more than sixty (60) days at any one time, or more than twice in any twelve (12) month period. Upon receipt of any written notice from the Company of the happening of any Suspension Event during the period the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related Prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the Prospectus) not misleading, each Designated Holder agrees that (i) it will immediately discontinue offers and sales of the Registrable Securities under the Registration Statement until such Designated Holder receives copies of a supplemental or amended Prospectus (which the Company agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Company that it may resume such offers and sales, and (ii) it will maintain the confidentiality of any information included in the written notice delivered by the Company unless otherwise required by law or subpoena. If so directed by the Company, each Designated Holder will deliver to the Company all copies of the Prospectus covering the Registrable Securities current at the time of receipt of such notice, other than permanent file copies then in the possession of such Designated Holder’s counsel.

SECTION 3

REGISTRATION PROCEDURES

3.1 Qualification . The Company agrees to use commercially reasonable efforts to register or qualify the Registrable Securities by the time the applicable Registration Statement is declared effective by the Commission under all applicable state securities or “blue sky” laws of such jurisdictions

as a Designated Holder may reasonably request in writing, and shall use commercially reasonable efforts to keep each such registration or qualification effective during the period such Registration Statement is required to be kept effective pursuant to this Agreement or during the period offers or sales are being made by the Designated Holders after delivery of a Registration Notice to the Company, whichever is shorter, and to do any and all other similar acts and things which may be reasonably necessary or advisable to enable the Designated Holders to consummate the disposition of the Registrable Securities in each such jurisdiction; provided , however , that the Company shall not be required to (i) qualify generally to do business in any jurisdiction or to register as a broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for this Agreement, (ii) take any action that would cause it to become subject to any taxation in any jurisdiction where it would not otherwise be subject to such taxation or (iii) take any action that would subject it to the general service of process in any jurisdiction where it is not then so subject.

3.2 Obligations of the Company . When the Company is required to effect the registration of Registrable Securities under the Securities Act pursuant to Section 2 of this Agreement, subject to Section 2.6 hereof (as applicable), the Company shall use its commercially reasonable efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method of distribution thereof as quickly as practicable, and in connection with any such request, the Company shall, as expeditiously as practicable:

(a) prepare and file with the Commission such amendments and supplements as to the Registration Statement and the Prospectus used in connection therewith as may be necessary (i) to keep such Registration Statement effective and (ii) to comply with the provisions of the Securities Act with respect to the disposition of the Registrable Securities covered by such Registration Statement, in each case for such time as is contemplated in Section 2.4 of this Agreement;

(b) furnish, without charge, to each Designated Holder selling Registrable Securities, prior to filing a Registration Statement, such number of copies of the Registration Statement, each amendment and supplement thereto (in each case including all exhibits, but excluding any documents to be incorporated by reference therein that are publicly available on the Commission’s Electronic Data Gathering, Analysis and Retrieval system (“ EDGAR ”)), and the Prospectus included in such Registration Statement in conformity with the requirements of the Securities Act as the Designated Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such Designated Holder;

(c) promptly notify the Designated Holders: (i) when the Registration Statement, any pre-effective amendment, the Prospectus or any prospectus supplement related thereto or post-effective amendment to the Registration Statement has been filed, and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation or threat of any proceedings for that purpose, and (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction or the initiation of any proceeding for such purpose;

(d) promptly use commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement, and, if any such order suspending the effectiveness of a Registration Statement is issued, shall promptly use commercially reasonable efforts to obtain the withdrawal of such order at the earliest possible moment;

(e) use reasonable best efforts to cause all such Registrable Securities to be listed on the national securities exchange on which the Common Shares are then listed, if the listing of Registrable Securities is then permitted under the rules of such national securities exchange; provided , that, all applicable listing requirements are satisfied; and

(f) if requested by a Designated Holder, incorporate in a prospectus supplement or post-effective amendment such information concerning such Designated Holder or the intended method of distribution as such Designated Holder reasonably requests to be included therein and is reasonably necessary to permit the sale of the Registrable Securities pursuant to the Registration Statement, including, without limitation, information with respect to the number of Registrable Securities being sold, the purchase price being paid therefor and any other material terms of the offering of the Registrable Securities to be sold in such offering; provided, however, that the Company shall not be obligated to include in any such prospectus supplement or post-effective amendment any requested information that is not required by the rules of the Commission and is unreasonable in scope compared with the Company’s most recent prospectus or prospectus supplement used in connection with a primary or secondary offering of equity securities by the Company.

3.3 Obligations of Designated Holders . In connection with any Registration Statement utilized by the Company to satisfy the Registration Rights, each Designated Holder selling Registrable Securities agrees to cooperate with the Company in connection with the preparation of the Registration Statement, and each Designated Holder selling Registrable Securities agrees that it will (i) respond within ten (10) Business Days to any reasonable written request by the Company to provide or verify information regarding such Designated Holder or such Designated Holder’s Registrable Securities (including the proposed manner of sale) that may be required to be included in such Registration Statement and related Prospectus pursuant to the rules and regulations of the Commission, and (ii) provide in a timely manner information regarding the proposed distribution by such Designated Holder of the Registrable Securities and such other information as may be requested by the Company from time to time in connection with the preparation of and for inclusion in the Registration Statement and related Prospectus.

SECTION 4

INDEMNIFICATION; CONTRIBUTION

4.1 Indemnification by the Company . The Company agrees to indemnify and hold harmless each Designated Holder and each person, if any, who controls a Designated Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and any of their Affiliates (and any officer, director, general partner or trustee thereof), partners, members, officers, directors, employees or representatives, as follows:

(a) against any and all loss, liability, claim, damage, judgment and expense whatsoever, as incurred, arising out of or based upon (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, Disclosure Package, Prospectus, Free Writing Prospectus or in any amendment or supplement thereto; and (b) the omission or alleged omission to state, in any Registration Statement, Disclosure Package, Prospectus, Free Writing Prospectus or in any amendment or supplement thereto, any material fact required to be stated therein or necessary to make the statements therein not misleading under the circumstances such statements were made;

or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and

(c) against any and all expense whatsoever, as incurred (including reasonable fees and disbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, in each case whether or not a party, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (a) or (b) above;

provided , however , that the indemnity provided pursuant to this Section 4.1 does not apply to any Designated Holder with respect to any loss, liability, claim, damage, judgment or expense to the extent arising out of (A) any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by such Designated Holder expressly for use in the Registration Statement, Disclosure Package, Prospectus, Free Writing Prospectus or in any amendment or supplement thereto or (B) such Designated Holder’s failure to deliver an amended or supplemental prospectus furnished to such Designated Holder by the Company, if such loss, liability, claim, damage, judgment or expense would not have arisen had such delivery occurred. The Company shall also provide customary indemnities to any underwriters of the Registrable Securities, their officers, directors and employees and each Person who controls such underwriters (within the meaning of Section 15 of the Securities Act).

4.2 Indemnification by Designated Holder . Each Designated Holder (and each permitted assignee thereof, on a several basis) severally and not jointly agrees to indemnify and hold harmless the Company, and each of its directors or trustees, as applicable, and officers (including each director or trustee, as applicable, and officer of the Company who signed a Registration Statement), any underwriter retained by the Company, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, as follows:

(b) against any and all loss, liability, claim, damage, judgment and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of such Designated Holder; and

provided , however , that the indemnity provided pursuant to this Section 4.2 shall only apply with respect to any loss, liability, claim, damage, judgment or expense to the extent arising out of (A) any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by such Designated Holder expressly for use in the Registration Statement, Disclosure Package, Prospectus, Free Writing Prospectus or in any amendment or supplement thereto or (B) such Designated Holder’s failure to deliver an amended or supplemental prospectus furnished to such Designated Holder by the Company, if such loss, liability, claim, damage or expense would not have arisen had such delivery occurred. Notwithstanding the provisions of this Section 6.2, such Designated Holder and any permitted assignee shall not be required to indemnify any Person pursuant to this Section 6.2 in excess of the amount of the net proceeds (after deducting the underwriters’ discounts and commissions) to such Designated Holder or such permitted assignee, as the case may be, from sales of the Registrable Securities of such Designated Holder under the Registration Statement that is the subject of the indemnification claim.

4.3 Conduct of Indemnification Proceedings . An indemnified party hereunder (the “ Indemnified Party ”) shall give reasonably prompt notice to the indemnifying party (the “ Indemnifying Party ”) of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify the Indemnifying Party (i) shall not relieve it from any liability which it may have under the indemnity agreement provided in Section 4.1 or 4.2 above, unless and only to the extent the lack of notice by the Indemnified Party results in the forfeiture by the Indemnifying Party of substantial rights and defenses, and (ii) shall not, in any event, relieve the Indemnifying Party from any obligations to any Indemnified Party other than the indemnification obligation provided under Section 4.1 or 4.2 above. If the Indemnifying Party so elects within a reasonable time after receipt of such notice, the Indemnifying Party may assume the defense of such action or proceeding at such Indemnifying Party’s own expense with counsel chosen by the Indemnifying Party and approved by the Indemnified Party, which approval shall not be unreasonably withheld; provided , however , that the Indemnifying Party will not settle, compromise or consent to the entry of any judgment with respect to any such action or proceeding without the written consent of the Indemnified Party unless such settlement, compromise or consent secures the unconditional release of the Indemnified Party. The Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expense of such counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense of such action with counsel approved by the Indemnified Party or (iii) the named parties to any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and such parties have been advised by such counsel that either (x) representation of such Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct or (y) there may be one or more legal defenses available to the Indemnified Party which are different from or additional to those available to the Indemnifying Party. In any of such cases, the Indemnifying Party shall not be entitled to assume such defense and the Indemnified Party shall be entitled to separate counsel at the Indemnifying Party’s expense. If the Indemnifying Party is not entitled to assume the defense of such action or proceeding as a result of clause (iii) above, the Indemnifying Party’s counsel shall be entitled to conduct the Indemnifying Party’s defense and counsel for the Indemnified Party shall be entitled to conduct the defense of the Indemnified Party, it being understood that both such counsel will cooperate with each other to conduct the defense of such action or proceeding as efficiently as possible. If the Indemnifying Party is not so entitled to assume the defense of such action or does not assume such defense, after having received the notice referred to in the first sentence of this paragraph, the Indemnifying Party will pay the reasonable fees and expenses of counsel for the Indemnified Party. In such event, however, the Indemnifying Party will not be liable for any settlement effected without the

written consent of the Indemnifying Party. If an Indemnifying Party is entitled to assume, and assumes, the defense of such action or proceeding in accordance with this paragraph, the Indemnifying Party shall not be liable for any fees and expenses of counsel for the Indemnified Party incurred thereafter in connection with such action or proceeding.

4.4 Contribution .

(a) In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Sections 4.1 and 4.2 above is for any reason held to be unenforceable by the Indemnified Party although applicable in accordance with its terms, the Indemnified Party and the Indemnifying Party shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement incurred by the Indemnified Party and the Indemnifying Party, in such proportion as is appropriate to reflect the relative fault of the Indemnified Party on the one hand and the Indemnifying Party on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities, or expenses. The relative fault of the Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether the action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, the Indemnifying Party or the Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action.

(b) The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 4.4, a Designated Holder shall not be required to contribute any amount in excess of the amount of the net proceeds (after deducting the underwriters’ discounts and commissions) to such Designated Holder from sales of the Registrable Securities of such Designated Holder under the Registration Statement that is the subject of the indemnification claim.

(c) Notwithstanding the foregoing, no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 4.4, each person, if any, who controls a Designated Holder within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as such Designated Holder, and each director of the Company, each officer of the Company who signed a Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as the Company.

SECTION 5

EXPENSES

The Company shall pay all expenses incident to the performance by the Company of its registration obligations under Section 2 above, including (i) Commission, stock exchange and FINRA registration and filing fees, (ii) all fees and expenses incurred in complying with securities or “blue sky” laws (including reasonable fees, charges and disbursements of counsel to any underwriter incurred in connection with “blue sky” qualifications of the Registrable Securities as may be set forth in any underwriting agreement), (iii) all printing, messenger and delivery expenses, (iv) the fees, charges and expenses of counsel to the Company and of its independent public accountants and any other accounting fees, charges and expenses incurred by the Company (including, without limitation, any expenses arising from any “comfort” letters or any special audits incident to or required by any registration or qualification), and (v) any liability insurance or other premiums for insurance obtained in connection with any Shelf Registration pursuant to the terms of this Agreement, regardless of whether such Registration

Statement is declared effective. All of the expenses described in the preceding sentence of this Section 5 are referred to herein as “ Registration Expenses .” Subject to clause (iv) above, each Designated Holder shall be responsible for the payment of any brokerage and sales commissions, fees and disbursements of such Designated Holder’s counsel, accountants and other advisors, and any transfer taxes relating to the sale or disposition of the Registrable Securities by such Designated Holder pursuant to this Agreement.

SECTION 6

RULE 144 COMPLIANCE

The Company covenants that it will use its best efforts to timely file the reports required to be filed by the Company under the Securities Act and the Exchange Act and take such further action as each Designated Holder may reasonably request (including providing any information necessary to comply with Rule 144 under the Securities Act), so as to enable the Designated Holders to sell the Registrable Securities pursuant to (i) Rule 144 under the Securities Act, or Regulation S under the Securities Act or (ii) any similar rules or regulations hereinafter adopted by the Commission. In connection with any sale, transfer or other disposition by a Designated Holder of any Registrable Securities pursuant to Rule 144 under the Securities Act, the Company shall cooperate with such Designated Holder to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold and not bearing any Securities Act legend, and enable certificates for such Registrable Securities to be for such number of shares and registered in such names as Holder may reasonably request at least five (5) Business Days prior to any sale of Registrable Securities hereunder.

SECTION 7

MISCELLANEOUS

7.1 Recapitalizations, Exchanges, etc . The provisions of this Agreement shall apply to the full extent set forth herein with respect to (i) the Common Shares, (ii) any and all shares of voting common stock of the Company into which the Common Shares are converted, exchanged or substituted in any recapitalization or other capital reorganization by the Company and (iii) any and all equity securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in conversion of, in exchange for or in substitution of, the Common Shares and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof. The Company shall cause any successor or assign (whether by merger, consolidation, sale of assets or otherwise) to enter into a new registration rights agreement with the Designated Holders on terms substantially the same as this Agreement as a condition of any such transaction.

7.2 Integration; Amendment . This Agreement constitutes the entire agreement among the parties hereto with respect to the matters set forth herein and supersedes and renders of no force and effect all prior oral or written agreements, commitments and understandings among the parties with respect to the matters set forth herein. Except as otherwise expressly provided in this Agreement, no amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by each of the parties hereto. Notwithstanding the foregoing, the Company, without the consent of any other party hereto, may amend this Agreement to add any permitted transferee of a Holder as a party to this Agreement as a Designated Holder.

7.3 Waivers . No waiver by a party hereto shall be effective unless made in a written instrument duly executed by the party against whom such waiver is sought to be enforced, and only to the extent set forth in such instrument. Neither the waiver by any of the parties hereto of a breach or a default under any of the provisions of this Agreement, nor the failure of any of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder shall thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights or privileges hereunder.

7.4 Assignment; Successors and Assigns . This Agreement and the rights granted hereunder may not be assigned by any Designated Holder (except to another Designated Holder) without the written consent of the Company. This Agreement shall inure to the benefit of and be binding upon all of the parties hereto and their respective heirs, executors, personal and legal representatives, successors and permitted assigns, including, without limitation, any successor of the Company by merger, acquisition, reorganization, recapitalization or otherwise.

7.5 Notices . All notices called for under this Agreement shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, (b) on the first Business Day following the date of dispatch if delivered by a nationally recognized next-day courier service, (c) on the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, or (d) if sent by facsimile transmission during business hours on a Business Day, when transmitted and receipt is confirmed, or otherwise on the following Business Day. All notices hereunder shall be delivered to the parties at the addresses set forth opposite their signatures below, or to any other address or addressee as any party entitled to receive notice under this Agreement shall designate, from time to time, to others in the manner provided in this Section 7.5 for the service of notices; provided, however, that notices of a change of address shall be effective only upon receipt thereof.

7.6 Specific Performance . The parties hereto acknowledge that the obligations undertaken by them hereunder are unique and that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to (i) compel specific performance of the obligations, covenants and agreements of any other party under this Agreement in accordance with the terms and conditions of this Agreement and (ii) obtain preliminary injunctive relief to secure specific performance and to prevent a breach or contemplated breach of this Agreement in any court of the United States or any State thereof having jurisdiction.

7.7 Governing Law; Consent to Jurisdiction .

(a) This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Maryland (excluding the conflict of law provisions thereof). Each party irrevocably submits to the exclusive jurisdiction of the State and Federal courts in the State of Delaware, and any appellate court from any thereof, in any suit, action or other proceeding arising out of or relating to this Agreement or any transaction contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each party irrevocably and unconditionally agrees that all claims in respect of any such suit, action or other proceeding may be heard and determined in such Delaware State court or, to the extent permitted by applicable law, in such Federal court. The parties agree that a final judgment in any such suit, action or other proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.

(b) Each party irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any suit, action or other proceeding arising out of or relating to this Agreement or any transaction contemplated hereby or thereby in any court referred to in the first sentence of paragraph (a) of this Section 7.7. Each party irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of any suit, action or other proceeding arising out of or relating to this Agreement or any transaction contemplated hereby or thereby in any court referred to in the first sentence of paragraph (a) of this Section 7.7.

(c) Each party consents, to the fullest extent permitted by applicable law, to service of any process, summons, notice or document in the manner provided for notices in Section 7.5. Nothing in this Agreement will affect the right of any party to serve process in any other manner permitted by applicable Law.

7.8 Waiver of Jury Trial . Each party hereby waives, to the fullest extent permitted by applicable Law, any right it may have to a trial by jury in respect to any litigation, directly or indirectly, arising out of or relating to this Agreement or any transaction contemplated hereby or thereby. Each party (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 7.8.

7.9 Headings . Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

7.10 Pronouns . All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or entity may require.

7.11 Execution in Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement. This Agreement may be executed by facsimile signatures

7.12 Severability . If fulfillment of any provision of this Agreement, at the time such fulfillment shall be due, shall transcend the limit of validity prescribed by law, then the obligation to be fulfilled shall be reduced to the limit of such validity; and if any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

7.13 No Third Party Beneficiaries . It is the explicit intention of the parties hereto that no person or entity other than the parties hereto is or shall be entitled to bring any action to enforce any provision of this Agreement against any of the parties hereto, and the covenants, undertakings and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, the parties hereto or their respective successors, heirs, executors, administrators, legal representatives and permitted assigns.

Signatures on following page

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed on its behalf as of the date first herein above set forth.


	COMPANY:

	QUALITYTECH GP, LLC

	By:
		Name:
		Title:

Address:	HOLDERS:


	Name:

	[See attached counterpart signature pages for each individual Holder]

SCHEDULE I


Holders (Name and Address)		Class A Units
[Name]		[ ]
[Address]

[Name]		[ ]
[Address]

[Name]		[ ]
[Address]

Exhibit 10.17

AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of [ ], 2013 by and among QTS Realty Trust, Inc., a Maryland corporation (the “ Company ”), QualityTech GP, LLC, a Delaware limited liability company ( “ Quality GP ”), and GA QTS Interholdco, LLC, a Delaware limited liability company (the “ Holder ”).

WHEREAS, Quality GP and the Holder previously entered into that certain Registration Rights Agreement dated October 23, 2009 (the “ Original Agreement ”) in connection with the consummation of an investment by General Atlantic REIT, Inc., a Maryland corporation and subsidiary of the Holder (“ GA REIT ”), in QualityTech, LP, a Delaware limited partnership of which Quality GP formerly served as general partner (the “ Partnership ”);

WHEREAS, pursuant to the Original Agreement, Quality GP granted, on behalf of itself and the Company, to the Designated Holders (as defined herein) the Registration Rights (as defined herein) set forth in this Agreement;

WHEREAS, the Company, Quality GP, the Partnership, GA REIT, the Holder and other direct and indirect partners of the Partnership concurrently herewith are engaging in various related transactions pursuant to which, among other things, (i) Quality GP has withdrawn as general partner of the Partnership and the Company has been admitted to the Partnership as general partner, and (ii) the Company is effecting an initial public offering (the “ IPO ”) of Class A common stock, $0.01 par value per share (the “ Common Stock ”); and

WHEREAS, in connection with the foregoing, the parties hereto now desire to amend and restate the Original Agreement in its entirety by the execution of this Agreement, which shall supersede and replace the Original Agreement, in order to evidence the joinder of the Company as a party hereto and the grant to the Designated Holders (as defined herein) of the Registration Rights (as defined herein) set forth in this Agreement.

SECTION 1

DEFINITIONS

As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

“ Agreement ” mean this Amended and Restated Registration Rights Agreement, as the same may be amended, supplemented or modified in accordance with the terms hereof.

“ Black-Out Period ” has the meaning set forth in Section 3.1(d).

“ Board of Directors ” means the board of directors of the Company.

“ Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in Overland Park, Kansas or New York City are authorized or required by law to close.

“ Closing Price ” means, with respect to the Registrable Securities, as of the date of determination, (a) if the Registrable Securities are listed on a national securities exchange, the closing price per share of a Registrable Security on such date quoted on Bloomberg or a similar platform or, if no such closing price on such date is quoted on Bloomberg or a similar platform, the average of the closing bid and asked prices on such date, as officially reported on the principal national securities exchange on which the Registrable Securities are then listed or admitted to trading; or (b) if the Registrable Securities are not then listed or admitted to trading on any national securities exchange, the last sale price or, if such last sale price is not reported, the average of the high bid and low asked prices in the over-the-counter market, as reported by The Nasdaq Stock Market or such other system then in use; or (c) if on any such date the Registrable Securities are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Registrable Securities selected by the Company; or (d) if none of (a), (b) or (c) is applicable, a market price per share determined in good faith by the Board of Directors or, if such determination is not satisfactory to the Designated Holders for whom such determination is being made, by a nationally recognized investment banking firm selected by the Company and such Designated Holder, the expenses for which shall be borne equally by the Company and such Designated Holder. If trading is conducted on a continuous basis on any exchange, then the closing price shall be at 4:00 P.M. New York City time.

“ Commission ” means the Securities and Exchange Commission or any successor agency then having jurisdiction to enforce the Securities Act.

“ Common Shares ” means the shares of the Company’s Common Stock.

“ Common Stock ” has the meaning set forth in the recitals to this Agreement.

“ Common Share Equivalents ” means any security or obligation which is by its terms, directly or indirectly, convertible into or exchangeable or exercisable for Common Shares, including, without limitation, the Units and any option, warrant or other subscription or purchase right with respect to Common Shares or any Common Share Equivalent.

“ Company ” has the meaning set forth in the preamble to this Agreement.

“ Company Underwriter ” has the meaning set forth in Section 3.3(b).

“ Demand Registration ” has the meaning set forth in Section 3.1(a).

“ Designated Holder ” means the Holder, any Subsequent General Atlantic Holder and any permitted transferee thereof to whom Registrable Securities are transferred in accordance with Section 9.5 of this Agreement.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.

“ FINRA ” means the Financial Industry Regulatory Authority.

“ Free Writing Prospectus ” means any “free writing prospectus” as defined in Rule 405 under the Securities Act.

“ GA LLC ” means General Atlantic LLC, a Delaware limited liability company, and any successor to such entity.

“ GA REIT ” has the meaning set forth in the recitals to this Agreement.

“ Holder ” has the meaning set forth in the recitals to this Agreement.

“ Holders’ Counsel ” has the meaning set forth in Section 5.2(a).

“ Incidental Registration ” has the meaning set forth in Section 4.1.

“ Indemnified Party ” has the meaning set forth in Section 6.3.

“ Indemnifying Party ” has the meaning set forth in Section 6.3.

“ Initiating Holders ” has the meaning set forth in Section 3.1(a).

“ Inspector ” has the meaning set forth in Section 5.2(j).

“ IPO ” has the meaning set forth in the recitals to this Agreement.

“ IPO Closing Date ” means the date upon which the Company closes the IPO.

“ Market Price ” means, on any date of determination, the average of the daily Closing Price of the Registrable Securities for the immediately preceding 30 days on which the national securities exchanges are open for trading.

“ New Registration Statement ” has the meaning set forth in Section 3.1(a).

“ Partnership Agreement ” means that certain Fifth Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of the date hereof, as may be amended from time to time.

“ Prospectus ” has the meaning set forth in Section 3.1(a).

“ Records ” has the meaning set forth in Section 5.2(j).

“ Registration Expenses ” has the meaning set forth in Section 7.

“ Registration Notice ” has the meaning set forth in Section 3.1(a).

“ Registration Statement ” has the meaning set forth in Section 3.1(a).

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

“ Shelf Registration Statement ” has the meaning set forth in Section 3.1(a).

“ Subsequent General Atlantic Holder ” means any Affiliate of GA LLC that, after the date hereof, acquires any Registrable Securities.

“ Suspension Event ” has the meaning set forth in Section 3.2.

“ Unit ” means a Class A unit of limited partnership interest in the Partnership.

SECTION 2

REGISTRATION RIGHTS

2.2 Registrable Securities . For the purposes of this Agreement, Registrable Securities shall cease to be Registrable Securities when (a) a Registration Statement covering such Registrable Securities has been declared effective under the Securities Act by the Commission and such Registrable Securities have been disposed of pursuant to such effective Registration Statement, (b) (i) the entire amount of the Registrable Securities owned by a Designated Holder may be sold in a single sale, in the opinion of counsel satisfactory to the Company and such Designated Holder, each in their reasonable judgment, without any limitation as to volume pursuant to Rule 144 (or any successor provision then in effect) under the Securities Act and (ii) such Designated Holder owning such Registrable Securities owns less than 1% of the outstanding Common Shares on a fully diluted basis, or (c) the Registrable Securities are proposed to be sold or distributed by a Person not entitled to the Registration Rights granted by this Agreement.

SECTION 3

DEMAND REGISTRATION RIGHTS

3.1 (a) Demand Registration . Subject to Sections 3.1(d) and 3.2 hereof, at any time after the date that is 180 days after the IPO Closing Date, if one or more Designated Holders (the “ Initiating Holders ”) desire to exercise their Registration Rights with respect to the Registrable Securities, such Initiating Holders may deliver to the Company a written notice (a “ Registration Notice ”) informing the Company of their desire to have the Registrable Securities registered for sale and specifying the number of Registrable Securities to be registered by the Company (a “ Demand Registration ”). Upon receipt of the Registration Notice, if the Company is not able to cause the Registrable Securities to be included as part of an existing shelf registration statement and related prospectus that the Company then has on file with, and which has been declared effective by, the Commission and which remains in effect and not subject to any stop order, injunction or other order or requirement of the Commission (the “ Shelf Registration Statement ”) (in which event the Company shall be deemed to have satisfied its registration obligation under this Section 3.1(a) with respect to the Registrable Securities, and, for the avoidance of doubt, such registration shall not be deemed a Demand Registration), then the Company shall cause to be filed with the Commission as soon as reasonably practicable after receiving the Registration Notice, but in no event more than thirty (30) days following receipt of such notice, a new registration statement and related prospectus (the “ New Registration Statement ”) that complies as to form in all material respects with applicable Commission rules

providing for the sale by the Designated Holders of the Registrable Securities, and agrees (subject to Section 3.2 hereof) to use reasonable best efforts to cause the New Registration Statement and Related Prospectus to be declared and remain effective by the Commission as soon as practicable. (As used herein, “ Registration Statement ” and “ Prospectus ” refer to a registration statement and related prospectus (including any preliminary prospectus) filed pursuant to the Securities Act utilized by the Company to satisfy a Designated Holder’s Registration Rights pursuant to this Agreement, including, but not limited to, a Shelf Registration Statement and related prospectus (including any preliminary prospectus) or a New Registration Statement and related prospectus (including any preliminary prospectus), including, in each case, any documents incorporated therein by reference).

Subject to Section 3.2 hereof, the Company agrees to use commercially reasonable efforts to keep the Registration Statement continuously effective (including the preparation and filing of any amendments and supplements necessary for that purpose) until the earlier of (i) the date that is two (2) years after the date of effectiveness of the Registration Statement, (ii) the date on which all of the Registrable Securities registered in the Demand Registration are eligible for sale without registration pursuant to Rule 144 (or any successor provision) under the Securities Act without volume limitations or other restrictions on transfer thereunder, or (iii) the date on which all of the Registrable Securities registered in the Demand Registration are sold.

Notwithstanding the foregoing, the Company may at any time prior to receiving a Registration Notice from a Designated Holder, but subject to the prior consent of the Designated Holders, include all of the Designated Holders’ Registrable Securities or any portion thereof in any Registration Statement (other than a Registration Statement on Form S-4 or S-8 or any successor thereto), including by virtue of adding such Registrable Securities as additional securities to an existing Shelf Registration Statement pursuant to Rule 462(b) under the Securities Act (in which event the Company shall be deemed to have satisfied its registration obligation under this Section 3.1(a) with respect to the Registrable Securities so included, so long as such registration statement remains effective and not the subject of any stop order, injunction or other order of the Commission); provided , that such registration shall not constitute a Demand Registration.

(b) Offers and Sales . All offers and sales of Registrable Securities by a Designated Holder under the Registration Statement shall be completed within the period during which such Registration Statement remains effective and not the subject of any stop order, injunction or other order of the Commission. Upon notice that such Registration Statement is no longer effective no Designated Holder shall offer or sell the Registrable Securities covered by such Registration Statement. If directed in writing by the Company, each Designated Holder shall return all undistributed copies of the Prospectus in the Designated Holder’s possession upon the expiration of such period. Notwithstanding the foregoing, a registration shall not constitute a Demand Registration

(1) until it has become effective and has been continuously effective for the lesser of (i) the period during which all Registrable Securities registered in the Demand Registration are sold and (ii) 120 days; and

(2) if (x) after such Demand Registration has become effective but prior to expiration of the time period set forth in clause (1) of this paragraph (b), such registration or the related offer, sale or distribution of Registrable Securities thereunder is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason not attributable to the Initiating Holders and such interference is not thereafter eliminated or (y) the conditions specified in the underwriting agreement, if any, entered into in connection with such Demand Registration are not satisfied or waived, other than by reason of a failure by the Initiating Holder.

(c) Limitations on Demand Registrations . The Designated Holders shall be entitled collectively to four (4) Demand Registrations, and each such Demand Registration shall be with respect to a minimum anticipated aggregate offering price (calculated based upon the Market Price of the Registrable Securities on the proposed date of filing of the Registration Statement with respect to such Registrable Securities) of $5,000,000 (or, all of the Registrable Securities held by the Designated Holders, if less than $5,000,000); provided that there shall not be more than two (2) Demand Registrations in any twelve (12) month period. For purposes of the preceding sentence, two or more Registration Statements filed in response to one demand shall be counted as one Demand Registration.

(d) Restrictions on Public Sale by Designated Holders . Each Designated Holder, if such Designated Holder owns 5% or more of the outstanding Common Shares, hereby agrees that it shall not, to the extent requested by the Company Underwriter, in the case of an underwritten public offering, directly or indirectly sell, offer to sell (including, without limitation, any short sale), grant any option or otherwise transfer or dispose of any Registrable Securities (other than to donees or Affiliates of a Designated Holder who agree to be similarly bound) within seven days prior to and for up to (x) 180 days, in the event of the IPO (or such other period as may be requested by the Company or the Company Underwriter to accommodate regulatory restrictions on (1) the publication or other distribution of research reports and (2) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA Rule 2711(f)(4), or any successor provisions or amendments thereto) or (y) 90 days, in the event of any subsequent offering, following the effective date of a registration statement of the Company filed under the Securities Act or the date of an underwriting agreement with respect to an underwritten public offering of the Company’s securities (the “ Black-Out Period ”); provided , however , that:

(i) all executive officers and trustees of the Company then holding Common Shares shall enter into similar agreements;

(ii) the Company shall use commercially reasonable efforts to obtain similar agreements from each 5% or greater equity holders of the Company; and

In order to enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the Registrable Securities subject to this Section 3.1(d) and to impose stop transfer instructions with respect to the Registrable Securities and such other Common Shares of a Designated Holder (and the Common Shares or securities of every other person subject to the foregoing restriction) until the end of such period.

3.2 Suspension of Offering . Notwithstanding Section 3.1(a) and Section 3.1(c) hereof, if the Board of Directors, in its good faith judgment, determines that any registration should not be made or continued because the negotiation or consummation of a material transaction by the Company or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event would require additional disclosure by the Company in the Registration Statement of material information which the Company has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the Board of Directors’ reasonable determination, to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance a “ Suspension Event ”), the Company may (x) postpone the filing of a Registration Statement, and (y) in the case of a Registration Statement that has been filed relating to a Demand Registration, upon the approval of a majority of the Board of Directors, require the Designated Holders not to sell under the Registration Statement or to suspend the effectiveness thereof; provided , however , that the Company may not delay, suspend or withdraw the Registration Statement for more than sixty (60) days at any one time, or more than twice in any twelve (12) month period. Upon receipt of any written notice from the Company of the happening of any Suspension Event during the period the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related Prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the Prospectus) not misleading, each Designated Holder agrees that (i) it will immediately discontinue offers and sales of the Registrable Securities under the Registration Statement until such Designated Holder receives copies of a supplemental or amended Prospectus (which the Company agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Company that it may resume such offers and sales, and (ii) it will maintain the confidentiality of any information included in the written notice delivered by the Company unless otherwise required by law or subpoena. If so directed by the Company, each Designated Holder will deliver to the Company all copies of the Prospectus covering the Registrable Securities current at the time of receipt of such notice, other than permanent file copies then in the possession of such Designated Holder’s counsel.

Demand Registration only the aggregate amount of Registrable Securities that the Company Underwriter believes may be sold without any such material adverse effect and shall reduce the amount of Registrable Securities to be included in such registration pro rata based on the number of Registrable Securities owned by each Designated Holder.

(b) Selection of Underwriters . If any Demand Registration of Registrable Securities is in the form of an underwritten offering, the Company shall select and obtain an investment banking firm of national reputation to act as the managing underwriter of the offering (the “ Company Underwriter ”); provided , however , that the Company Underwriter shall also be reasonably acceptable to the Initiating Holders.

SECTION 4

INCIDENTAL OR “PIGGY-BACK” REGISTRATION.

4.1 Request for Incidental Registration . If at any time the Company proposes to file a Registration Statement under the Securities Act with respect to an offering by the Company for its own account (other than a Registration Statement on Form S-4 or S-8 or any successor thereto) or for the account of any holder of Common Shares (including other Designated Holders), then the Company shall give written notice of such proposed filing to each of the Designated Holders at least ten (10) Business Days before the anticipated filing date, and such notice shall describe the proposed registration and distribution and offer such Designated Holders the opportunity to register the number of Registrable Securities as each such Designated Holder may request (an “ Incidental Registration ”). The Company shall use its reasonable best efforts (within ten (10) Business Days of the notice provided for in the preceding sentence) to cause the managing underwriter or underwriters in the case of a proposed underwritten offering to permit each of the Designated Holders who have requested in writing to participate in the Incidental Registration to include its or his Registrable Securities in such offering on the same terms and conditions as the securities of the Company or the account of such Designated Holders, as the case may be, included therein. In connection with any Incidental Registration under this Section 4.1 involving an underwritten offering, the Company shall not be required to include any Registrable Securities in such underwritten offering unless the Designated Holders thereof accept the terms of the underwritten offering as agreed upon between the Company and the Company Underwriter, and then only in such quantity as the Company Underwriter believes will not jeopardize the success of the offering by the Company. If the Company Underwriter determines in good faith that marketing factors require a limitation in the Incidental Registration of the number of shares to be included in such Incidental Registration, then the Incidental Registration shall cover, first , all of the securities to be offered for the account of the Company; and second , the Registrable Securities to be offered for the account of the Designated Holders pursuant to this Section 4, pro rata based on the number of Registrable Securities owned by each such Designated Holder.

SECTION 5

REGISTRATION PROCEDURES.

shall use commercially reasonable efforts to keep each such registration or qualification effective during the period such Registration Statement is required to be kept effective pursuant to this Agreement or during the period offers or sales are being made by the Designated Holders after delivery of a Registration Notice to the Company, whichever is shorter, and to do any and all other similar acts and things which may be reasonably necessary or advisable to enable the Designated Holders to consummate the disposition of the Registrable Securities in each such jurisdiction; provided , however , that the Company shall not be required to (i) qualify generally to do business in any jurisdiction or to register as a broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for this Agreement, (ii) take any action that would cause it to become subject to any taxation in any jurisdiction where it would not otherwise be subject to such taxation or (iii) take any action that would subject it to the general service of process in any jurisdiction where it is not then so subject.

5.2 Obligations of the Company . When the Company is required to effect the registration of Registrable Securities under the Securities Act pursuant to Section 3 or Section 4 of this Agreement, subject to Section 3.2 hereof (as applicable), the Company shall use its commercially reasonable efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method of distribution thereof as quickly as practicable, and in connection with any such request, the Company shall, as expeditiously as practicable:

(a) prepare and file with the Commission a Registration Statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which complies as to form in all material respects with applicable Commission rules providing for the sale by the Designated Holders of the Registrable Securities to be filed with the Commission; provided, however, that before filing a Registration Statement or Prospectus or any amendments or supplements thereto, the Company shall provide counsel selected by the Designated Holder holding a majority of the Registrable Securities being registered in such registration (“ Holders’ Counsel ”) and any other Inspector with an adequate and appropriate opportunity to review and comment on such Registration Statement and each Prospectus included therein (and each amendment or supplement thereto) and each Free Writing Prospectus to be filed with the Commission, to the extent such documents are under the Company’s control;

(b) prepare and file with the Commission such amendments and supplements as to the Registration Statement and the Prospectus used in connection therewith as may be necessary (i) to keep such Registration Statement effective and (ii) to comply with the provisions of the Securities Act with respect to the disposition of the Registrable Securities covered by such Registration Statement, in each case for such time as is contemplated in Section 3.1 or Section 4.1 of this Agreement;

conformity with the requirements of the Securities Act as the Designated Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such Designated Holder;

(d) promptly notify the Designated Holders: (i) when the Registration Statement, any pre-effective amendment, the Prospectus or any prospectus supplement related thereto or post-effective amendment to the Registration Statement has been filed, and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation or threat of any proceedings for that purpose, and (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction or the initiation of any proceeding for such purpose;

(e) promptly use commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement, and, if any such order suspending the effectiveness of a Registration Statement is issued, shall promptly use commercially reasonable efforts to obtain the withdrawal of such order at the earliest possible moment;

(f) following receipt of a Registration Notice and thereafter until the sooner of completion, abandonment or termination of the offering or sale contemplated thereby and the expiration of the period during which the Company is required to maintain the effectiveness of the related Registration Statement as set forth in Section 3 or Section 4, as the case may be, promptly notify the Designated Holders: (i) of the existence of any fact of which the Company is aware or the happening of any event which has resulted in (A) the Registration Statement, as then in effect, containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make any statements therein not misleading or (B) the Prospectus included in such Registration Statement containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make any statements therein, in the light of the circumstances under which they were made, not misleading, and (ii) of the Company’s reasonable determination that a post-effective amendment to the Registration Statement would be appropriate or that there exist circumstances not yet disclosed to the public which make further sales under such Registration Statement inadvisable pending such disclosure and post-effective amendment; and, if the notification relates to any event described in either of the clauses (i) or (ii) of this Section 5.2(f), at the request of a Designated Holder, the Company shall promptly prepare and, to the extent the exemption from the prospectus delivery requirements in Rule 172 under the Securities Act is not available, furnish to the Designated Holder a reasonable number of copies of a supplement or post-effective amendment to such Registration Statement or related Prospectus or file any other required document so that (1) such Registration Statement shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (2) as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, such Prospectus shall not include an

untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(g) use reasonable best efforts to cause all such Registrable Securities to be listed on the national securities exchange on which the Common Shares are then listed, if the listing of Registrable Securities is then permitted under the rules of such national securities exchange; provided , that, all applicable listing requirements are satisfied;

(h) if requested by a Designated Holder, incorporate in a prospectus supplement or post-effective amendment such information concerning such Designated Holder or the intended method of distribution as such Designated Holder reasonably requests to be included therein and is reasonably necessary to permit the sale of the Registrable Securities pursuant to the Registration Statement, including, without limitation, information with respect to the number of Registrable Securities being sold, the purchase price being paid therefor and any other material terms of the offering of the Registrable Securities to be sold in such offering; provided , however , that the Company shall not be obligated to include in any such prospectus supplement or post-effective amendment any requested information that is not required by the rules of the Commission and is unreasonable in scope compared with the Company’s most recent prospectus or prospectus supplement used in connection with a primary or secondary offering of equity securities by the Company;

(i) if such sale is pursuant to an underwritten offering, enter into and perform customary agreements (including an underwriting agreement in customary form with the Company Underwriter, if any, selected as provided in Section 3) and take such other actions as are prudent and reasonably required in order to expedite or facilitate the disposition of such Registrable Securities, including causing its officers to participate in “road shows” and other information meetings organized by the Company Underwriter;

(j) if such sale is pursuant to an underwritten offering, make available at reasonable times for inspection by any seller of Registrable Securities, any managing underwriter participating in any disposition of such Registrable Securities pursuant to a Registration Statement, Holders’ Counsel and any attorney, accountant or other agent retained by any such seller or any managing underwriter (each, an “ Inspector ” and collectively, the “ Inspectors ”), all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries (collectively, the “ Records ”) as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company’s and its subsidiaries’ officers, directors and employees, and the independent public accountants of the Company, to supply all information reasonably requested by any such Inspector in connection with such Registration Statement. Records that the Company determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors (and the Inspectors shall confirm their agreement in writing in advance to the Company if the Company shall so request) unless (x) the disclosure of such Records is necessary, in the Company’s judgment, to avoid or correct a misstatement or omission in

the Registration Statement, (y) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction after exhaustion of all appeals therefrom or (z) the information in such Records was known to the Inspectors on a non-confidential basis prior to its disclosure by the Company or has been made generally available to the public. Each seller of Registrable Securities agrees that it shall, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at the Company’s expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential;

(k) if such sale is pursuant to an underwritten offering, obtain “comfort” letters dated the effective date of the Registration Statement and the date of the closing under the underwriting agreement from the Company’s independent public accountants in customary form and covering such matters of the type customarily covered by “comfort” letters as the managing underwriter reasonably requests;

(l) if such sale is pursuant to an underwritten offering, furnish, at the request of any seller of Registrable Securities on the date such securities are delivered to the underwriters for sale pursuant to such registration, an opinion, dated such date, of counsel representing the Company for the purposes of such registration, addressed to the underwriters, if any, and to the seller making such request, covering such legal matters with respect to the registration in respect of which such opinion is being given as the underwriters may reasonably request and are customarily included in such opinions;

(m) comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable but no later than 15 months after the effective date of the Registration Statement, an earnings statement covering a period of 12 months beginning after the effective date of the Registration Statement, in a manner which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

(n) keep Holders’ Counsel reasonably advised as to the initiation and progress of any registration under Section 3 or Section 4 hereunder;

(o) cooperate with each seller of Registrable Securities and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA; and

(p) take all other steps reasonably necessary to effect the registration of the Registrable Securities contemplated hereby.

such Designated Holder or such Designated Holder’s Registrable Securities (including the proposed manner of sale) that may be required to be included in such Registration Statement and related Prospectus pursuant to the rules and regulations of the Commission, and (ii) provide in a timely manner information regarding the proposed distribution by such Designated Holder of the Registrable Securities and such other information as may be requested by the Company from time to time in connection with the preparation of and for inclusion in the Registration Statement and related Prospectus.

SECTION 6

INDEMNIFICATION; CONTRIBUTION

6.1 Indemnification by the Company . The Company agrees to indemnify and hold harmless each Designated Holder and each person, if any, who controls a Designated Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and any of their Affiliates (and any officer, director, general partner or trustee thereof), partners, members, officers, directors, employees or representatives, as follows:

(B) such Designated Holder’s failure to deliver an amended or supplemental prospectus furnished to such Designated Holder by the Company, if such loss, liability, claim, damage, judgment or expense would not have arisen had such delivery occurred. The Company shall also provide customary indemnities to any underwriters of the Registrable Securities, their officers, directors and employees and each Person who controls such underwriters (within the meaning of Section 15 of the Securities Act).

6.2 Indemnification by Designated Holder . Each Designated Holder (and each permitted assignee thereof, on a several basis) severally and not jointly agrees to indemnify and hold harmless the Company, and each of its directors or trustees, as applicable, and officers (including each director or trustee, as applicable, and officer of the Company who signed a Registration Statement), any underwriter retained by the Company, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, as follows:

Company, if such loss, liability, claim, damage or expense would not have arisen had such delivery occurred. Notwithstanding the provisions of this Section 6.2, such Designated Holder and any permitted assignee shall not be required to indemnify any Person pursuant to this Section 6.2 in excess of the amount of the net proceeds (after deducting the underwriters’ discounts and commissions) to such Designated Holder or such permitted assignee, as the case may be, from sales of the Registrable Securities of such Designated Holder under the Registration Statement that is the subject of the indemnification claim.

6.3 Conduct of Indemnification Proceedings . An indemnified party hereunder (the “ Indemnified Party ”) shall give reasonably prompt notice to the indemnifying party (the “ Indemnifying Party ”) of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify the Indemnifying Party (i) shall not relieve it from any liability which it may have under the indemnity agreement provided in Section 6.1 or 6.2 above, unless and only to the extent the lack of notice by the Indemnified Party results in the forfeiture by the Indemnifying Party of substantial rights and defenses, and (ii) shall not, in any event, relieve the Indemnifying Party from any obligations to any Indemnified Party other than the indemnification obligation provided under Section 6.1 or 6.2 above. If the Indemnifying Party so elects within a reasonable time after receipt of such notice, the Indemnifying Party may assume the defense of such action or proceeding at such Indemnifying Party’s own expense with counsel chosen by the Indemnifying Party and approved by the Indemnified Party, which approval shall not be unreasonably withheld; provided, however , that the Indemnifying Party will not settle, compromise or consent to the entry of any judgment with respect to any such action or proceeding without the written consent of the Indemnified Party unless such settlement, compromise or consent secures the unconditional release of the Indemnified Party. The Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expense of such counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense of such action with counsel approved by the Indemnified Party or (iii) the named parties to any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and such parties have been advised by such counsel that either (x) representation of such Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct or (y) there may be one or more legal defenses available to the Indemnified Party which are different from or additional to those available to the Indemnifying Party. In any of such cases, the Indemnifying Party shall not be entitled to assume such defense and the Indemnified Party shall be entitled to separate counsel at the Indemnifying Party’s expense. If the Indemnifying Party is not entitled to assume the defense of such action or proceeding as a result of clause (iii) above, the Indemnifying Party’s counsel shall be entitled to conduct the Indemnifying Party’s defense and counsel for the Indemnified Party shall be entitled to conduct the defense of the Indemnified Party, it being understood that both such counsel will cooperate with each other to conduct the defense of such action or proceeding as efficiently as possible. If the Indemnifying Party is not so entitled to assume the defense of such action or does not assume such defense, after having received the notice referred to in the first sentence of this paragraph, the Indemnifying Party will pay the reasonable fees and expenses of counsel for the Indemnified Party. In such event, however, the Indemnifying Party will not be liable for any settlement

effected without the written consent of the Indemnifying Party. If an Indemnifying Party is entitled to assume, and assumes, the defense of such action or proceeding in accordance with this paragraph, the Indemnifying Party shall not be liable for any fees and expenses of counsel for the Indemnified Party incurred thereafter in connection with such action or proceeding.

6.4 Contribution . In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Sections 6.1 and 6.2 above is for any reason held to be unenforceable by the Indemnified Party although applicable in accordance with its terms, the Indemnified Party and the Indemnifying Party shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement incurred by the Indemnified Party and the Indemnifying Party, in such proportion as is appropriate to reflect the relative fault of the Indemnified Party on the one hand and the Indemnifying Party on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities, or expenses. The relative fault of the Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether the action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, the Indemnifying Party or the Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action.

The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section 6.4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 6.4, a Designated Holder shall not be required to contribute any amount in excess of the amount of the net proceeds (after deducting the underwriters’ discounts and commissions) to such Designated Holder from sales of the Registrable Securities of such Designated Holder under the Registration Statement that is the subject of the indemnification claim.

Notwithstanding the foregoing, no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 6.4, each person, if any, who controls a Designated Holder within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as such Designated Holder, and each director of the Company, each officer of the Company who signed a Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as the Company.

SECTION 7

EXPENSES

The Company shall pay all expenses incident to the performance by the Company of its registration obligations under Section 3 and Section 4 above, including (i) Commission, stock exchange and FINRA registration and filing fees, (ii) all fees and expenses incurred in complying with securities or “blue sky” laws (including reasonable fees, charges and disbursements of counsel to any underwriter incurred in connection with “blue sky”

qualifications of the Registrable Securities as may be set forth in any underwriting agreement), (iii) all printing, messenger and delivery expenses, (iv) the fees, charges and expenses of counsel to the Company and of its independent public accountants and any other accounting fees, charges and expenses incurred by the Company (including, without limitation, any expenses arising from any “comfort” letters or any special audits incident to or required by any registration or qualification) and all reasonable legal fees, charges and expenses incurred, in the case of a Demand Registration, by the Initiating Holders, and (v) any liability insurance or other premiums for insurance obtained in connection with any Demand Registration, Incidental Registration or Shelf Registration pursuant to the terms of this Agreement, regardless of whether such Registration Statement is declared effective. All of the expenses described in the preceding sentence of this Section 7 are referred to herein as “ Registration Expenses .” Subject to clause (iv) above, each Designated Holder shall be responsible for the payment of any brokerage and sales commissions, fees and disbursements of such Designated Holder’s counsel, accountants and other advisors, and any transfer taxes relating to the sale or disposition of the Registrable Securities by such Designated Holder pursuant to this Agreement.

SECTION 8

RULE 144 COMPLIANCE

SECTION 9

MISCELLANEOUS

9.1 Recapitalizations, Exchanges, etc. The provisions of this Agreement shall apply to the full extent set forth herein with respect to (i) the Common Shares, (ii) any and all shares of voting common stock of the Company into which the Common Shares are converted, exchanged or substituted in any recapitalization or other capital reorganization by the Company and (iii) any and all equity securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in conversion of, in exchange for or in substitution of, the Common Shares and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof. The Company shall cause any successor or assign (whether by merger, consolidation, sale of assets or otherwise) to enter into a new registration rights agreement with the Designated Holders on terms substantially the same as this Agreement as a condition of any such transaction.

9.2 No Inconsistent Agreements . The Company represents and warrants that it has not granted to any Person the right to request or require the Company to register any securities issued by the Company, other than the rights granted to the Designated Holders herein, registration rights granted to Chad L. Williams and entities through which Chad L. Williams holds Common Shares and registration rights granted to the limited partners of the Partnership, in form and substance identical to the rights granted herein. The Company shall not enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Designated Holders in this Agreement or grant any additional registration rights to any Person or with respect to any securities which are not Registrable Securities which are prior in right to or inconsistent with the rights granted in this Agreement.

9.3 Integration; Amendment . This Agreement constitutes the entire agreement among the parties hereto with respect to the matters set forth herein and supersedes and renders of no force and effect all prior oral or written agreements, commitments and understandings among the parties with respect to the matters set forth herein. Except as otherwise expressly provided in this Agreement, no amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by each of the parties hereto. Notwithstanding the foregoing, the Company, without the consent of any other party hereto, may amend this Agreement to add any Subsequent General Atlantic Holder as a party to this Agreement as a Designated Holder.

9.4 Waivers . No waiver by a party hereto shall be effective unless made in a written instrument duly executed by the party against whom such waiver is sought to be enforced, and only to the extent set forth in such instrument. Neither the waiver by any of the parties hereto of a breach or a default under any of the provisions of this Agreement, nor the failure of any of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder shall thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights or privileges hereunder.

9.5 Assignment; Successors and Assigns . This Agreement and the rights granted hereunder may not be assigned by any Designated Holder (except to another Designated Holder) without the written consent of the Company; provided , however , that a Designated Holder may assign its rights and obligations hereunder, without such consent, (i) to an Affiliate of such Designated Holder or to any permitted transferee of such Designated Holder pursuant to the Partnership Agreement, and (ii) with respect to Incidental Registration rights, to any transferee of Registrable Securities or Units, if such transferee agrees in writing to be bound by all of the provisions hereof and the Designated Holder provides written notice of the assignment to the Company not more than ten (10) days after such assignment. This Agreement shall inure to the benefit of and be binding upon all of the parties hereto and their respective heirs, executors, personal and legal representatives, successors and permitted assigns, including, without limitation, any successor of the Company by merger, acquisition, reorganization, recapitalization or otherwise.

9.6 Notices . All notices called for under this Agreement shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, (b) on the first Business Day following the date of dispatch if delivered by a nationally recognized next-day courier service, (c) on the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, or (d) if sent by facsimile transmission during business hours on a Business Day, when transmitted and receipt is confirmed, or otherwise on the following Business Day. All notices hereunder shall be delivered to the parties at the addresses set forth opposite their signatures below, or to any other address or addressee as any party entitled to receive notice under this Agreement shall designate, from time to time, to others in the manner provided in this Section 9.6 for the service of notices; provided, however , that notices of a change of address shall be effective only upon receipt thereof.

9.7 Specific Performance . The parties hereto acknowledge that the obligations undertaken by them hereunder are unique and that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to (i) compel specific performance of the obligations, covenants and agreements of any other party under this Agreement in accordance with the terms and conditions of this Agreement and (ii) obtain preliminary injunctive relief to secure specific performance and to prevent a breach or contemplated breach of this Agreement in any court of the United States or any State thereof having jurisdiction.

9.8 Governing Law; Consent to Jurisdiction . (a) This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Delaware (excluding the conflict of law provisions thereof). Each party irrevocably submits to the exclusive jurisdiction of the Federal and State courts of the State of Delaware, and any appellate court from any thereof, in any suit, action or other proceeding arising out of or relating to this Agreement or any transaction contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each party irrevocably and unconditionally agrees that all claims in respect of any such suit, action or other proceeding may be heard and determined in such Delaware State court or, to the extent permitted by applicable law, in such Federal court. The parties agree that a final judgment in any such suit, action or other proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.

(b) Each party irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any suit, action or other proceeding arising out of or relating to this Agreement or any transaction contemplated hereby or thereby in any court referred to in the first sentence of paragraph (a) of this Section 9.8. Each party irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of any suit, action or other proceeding arising out of or relating to this Agreement or any transaction contemplated hereby or thereby in any court referred to in the first sentence of paragraph (a) of this Section 9.8.

(c) Each party consents, to the fullest extent permitted by applicable law, to service of any process, summons, notice or document in the manner provided for notices in Section 9.6. Nothing in this Agreement will affect the right of any party to serve process in any other manner permitted by applicable Law.

9.9 Waiver of Jury Trial . Each party hereby waives, to the fullest extent permitted by applicable Law, any right it may have to a trial by jury in respect to any litigation, directly or indirectly, arising out of or relating to this Agreement or any transaction contemplated hereby or thereby. Each party (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 9.9.

9.10 Headings . Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

9.11 Pronouns . All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or entity may require.

9.12 Execution in Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement. This Agreement may be executed by facsimile signatures

9.13 Severability . If fulfillment of any provision of this Agreement, at the time such fulfillment shall be due, shall transcend the limit of validity prescribed by law, then the obligation to be fulfilled shall be reduced to the limit of such validity; and if any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

9.14 No Third Party Beneficiaries . It is the explicit intention of the parties hereto that no person or entity other than the parties hereto is or shall be entitled to bring any action to enforce any provision of this Agreement against any of the parties hereto, and the covenants, undertakings and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, the parties hereto or their respective successors, heirs, executors, administrators, legal representatives and permitted assigns.

Signatures on following page

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed on its behalf as of the date first herein above set forth.

Address:

COMPANY:

12851 Foster Street, Suite 205

QTS REALTY TRUST, INC.

Overland Park, Kansas 66213

Attn: Shirley E. Goza, General Counsel

Facsimile: (913) 814-7766

By:

Name:

Title:

QUALITY GP:

c/o QTS Realty Trust, Inc.

QUALITYTECH GP, LLC

12851 Foster Street, Suite 205

Overland Park, Kansas 66213

Attn: Shirley E. Goza, General Counsel

Facsimile: (913) 814-7766

By:

Name:

Title:

Address:

HOLDER:

c/o General Atlantic Service Company, LLC

GA QTS INTERHOLDCO, LLC

55 East 52 ^nd Street, 32 ^nd Floor

New York, NY 10055

Telecopy: (212) 759-5708

Attention: David A. Rosenstein, Esq.

By:

Email: drosenstein@generalatlantic.com

Name:

Title:

[Signature Page to Registration Rights Agreement]

Exhibit 10.18

AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of [ ], 2013 by and among QTS Realty Trust, Inc., a Maryland corporation (the “ Company ”), QualityTech GP, LLC, a Delaware limited liability company ( “ Quality GP ”), and the Persons listed on Schedule A hereto (collectively, the “ Holders ,” and each individually, a “ Holder ”).

WHEREAS, Quality GP and the Holders previously entered into that certain Registration Rights Agreement dated October 23, 2009 (the “ Original Agreement ”) in connection with the consummation of an investment by General Atlantic REIT, Inc., a Maryland corporation (“ GA REIT ”), in QualityTech, LP, a Delaware limited partnership of which Quality GP formerly served as general partner (the “ Partnership ”);

WHEREAS, the Company, Quality GP, the Partnership, GA REIT the Holders and other direct and indirect partners of the Partnership concurrently herewith are engaging in various related transactions pursuant to which, among other things, (i) Quality GP has withdrawn as general partner of the Partnership and the Company has been admitted to the Partnership as general partner, and (ii) the Company is effecting an initial public offering (the “ IPO ”) of Class A common stock, $0.01 par value per share (the “ Common Stock ”); and

WHEREAS, in connection with the foregoing, the parties hereto now desire to amend and restate the Original Agreement in its entirety by the execution of this Agreement, which shall supersede and replace the Original Agreement, in order to evidence the joinder of the Company and certain of the Holders as parties hereto and the grant to the Designated Holders (as defined herein) of the Registration Rights (as defined herein) set forth in this Agreement.