Exhibit 10.2

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

REVEN HOUSING REIT OP, L.P.

 

(a Delaware limited partnership)

 

Dated as of June 1, 2015

 

 

 

 

TABLE OF CONTENTS

 

    Page       Article I DEFINED TERMS 1     Article II FORMATION OF PARTNERSHIP
10       2.01. Formation of the Partnership 10       2.02. Name 11       2.03.
Registered Office and Agent; Principal Office 11       2.04. Term and
Dissolution 11       2.05. Filing of Certificate and Perfection of Limited
Partnership 12       2.06. Certificates Describing Partnership Units 12      
Article III BUSINESS OF THE PARTNERSHIP 13     Article IV CAPITAL CONTRIBUTIONS
AND ACCOUNTS 13       4.01. Capital Contributions 13       4.02. Additional
Capital Contributions and Issuances of Additional Partnership Units 13      
4.03. Additional Funding 17       4.04. LTIP Units 17       4.05. Conversion of
LTIP Units 21       4.06. Capital Accounts 24       4.07. Percentage Interests
24       4.08. No Interest on Contributions 24       4.09. Return of Capital
Contributions 24       4.10. No Third-Party Beneficiary 25       Article V
PROFITS AND LOSSES; DISTRIBUTIONS 25       5.01. Allocation of Profit and Loss
25       5.02. Distribution of Cash 28       5.03. REIT Distribution
Requirements 29       5.04. No Right to Distributions in Kind 29       5.05.
Limitations on Return of Capital Contributions 29       5.06. Distributions Upon
Liquidation 29       5.07. Substantial Economic Effect 29       Article VI
RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER 30       6.01. Management
of the Partnership 30       6.02. Delegation of Authority 32       6.03.
Indemnification and Exculpation of Indemnitees 33       6.04. Liability of the
General Partner 34

 

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6.05. Partnership Obligations 35       6.06. Outside Activities 36       6.07.
Employment or Retention of Affiliates 36       6.08. Reven REIT’s Activities 36
      6.09. Title to Partnership Assets 37       Article VII CHANGES IN GENERAL
PARTNER 37       7.01. Transfer of the General Partner’s Partnership Interest 37
      7.02. Admission of a Substitute or Additional General Partner 39      
7.03. Effect of Bankruptcy, Withdrawal, Death or Dissolution of General Partner
39       7.04. Removal of General Partner 40       Article VIII RIGHTS AND
OBLIGATIONS OF THE LIMITED PARTNERS 41       8.01. Management of the Partnership
41       8.02. Power of Attorney 41       8.03. Limitation on Liability of
Limited Partners 41       8.04. Redemption Right 42       8.05. Registration 44
      Article IX TRANSFERS OF PARTNERSHIP INTERESTS 49       9.01. Purchase for
Investment 49       9.02. Restrictions on Transfer of Partnership Units 49      
9.03. Admission of Substitute Limited Partner 50       9.04. Rights of Assignees
of Partnership Units 51       9.05. Effect of Bankruptcy, Death, Incompetence or
Termination of a Limited Partner 51       9.06. Joint Ownership of Partnership
Units 52       Article X BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS 52      
10.01. Books and Records 52       10.02. Custody of Partnership Funds; Bank
Accounts 52       10.03. Fiscal and Taxable Year 53       10.04. Annual Tax
Information and Report 53     10.05. Tax Classification; Tax Matters Partner;
Tax Elections; Special Basis Adjustments 53       Article XI AMENDMENT OF
AGREEMENT; MERGER 54       11.01. Amendment of Agreement 54       11.02. Merger
of Partnership 55

 

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Article XII GENERAL PROVISIONS 55       12.01. Notices 55       12.02. Survival
of Rights 55       12.03. Additional Documents 56       12.04. Severability 56  
    12.05. Entire Agreement 56       12.06. Pronouns and Plurals 56       12.07.
Headings 56       12.08. Counterparts 56       12.09. Governing Law 56

 

EXHIBITS   EXHIBIT A - Partners, Capital Contributions and Percentage Interests
  EXHIBIT B - Notice of Redemption   EXHIBIT C-1 - Certification of Non-Foreign
Status (For Redeeming Limited Partners That Are Entities)   EXHIBIT C-2 -
Certification of Non-Foreign Status (For Redeeming Limited Partners That Are
Individuals)   EXHIBIT D - Notice of Election by Partner to Convert LTIP Units
into Common Units   EXHIBIT E - Notice of Election by Partnership to Force
Conversion of LTIP Units into Common Units

 

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AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

REVEN HOUSING REIT OP, L.P.

 

THIS AGREEMENT OF LIMITED PARTNERSHIP OF REVEN HOUSING REIT OP, L.P., dated as
of June 1, 2015 is made and entered into by and among Reven Housing GP, LLC, a
Delaware limited liability company, as the General Partner, and the Persons
whose names are set forth on Exhibit A attached hereto (as it may be amended
from time to time), as the Limited Partners, together with any other Persons who
become Partners in the Partnership as provided herein.

 

WHEREAS, a Certificate of Limited Partnership of the Partnership was filed with
the Secretary of State of the State of Delaware on April 29, 2015, with Reven
Housing GP, LLC, as the General Partner;

 

WHEREAS, prior to the date hereof, the Partnership has not issued any
Partnership Interests in the Partnership or admitted any Persons as Limited
Partners of the Partnership;

 

WHEREAS, on the date hereof, the General Partner desires to admit the Persons
whose names are set forth on Exhibit A attached hereto, as the Limited Partners
of the Partnership; and

 

WHEREAS, on the date hereof, the General Partner desires to cause the
Partnership to issue the Partnership Interests in the Partnership to the General
Partner and the Limited Partners of the Partnership, as set forth on Exhibit A
attached hereto.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

Article I

DEFINED TERMS

 

The following defined terms used in this Agreement shall have the meanings
specified below:

 

“Act” means the Delaware Revised Uniform Limited Partnership Act, as it may be
amended from time to time.

 

“Additional Funds” has the meaning set forth in Section 4.03 hereof.

 

“Additional Securities” means any: (1) shares of capital stock of Reven REIT now
or hereafter authorized or reclassified that have dividend rights, or rights
upon liquidation, winding up and dissolution, that are superior or prior to the
REIT Shares (“Preferred Shares”), (2) REIT Shares, (3) shares of capital stock
of Reven REIT now or hereafter authorized or reclassified that have dividend
rights, or rights upon liquidation, winding up and dissolution, that are junior
in rank to the REIT Shares (“Junior Shares”) and (4) (i) rights, options,
warrants or convertible or exchangeable securities having the right to subscribe
for or purchase or otherwise acquire REIT Shares, Preferred Shares or Junior
Shares, or (ii) indebtedness issued by Reven REIT that provides any of the
rights described in clause (4)(i) of this definition (any such securities
referred to in clause (4)(i) or (ii) of this definition, “New Securities”).

 

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“Adjustment Events” has the meaning set forth in Section 4.04(a)(i) hereof.

 

“Administrative Expenses” means (i) all administrative and operating costs and
expenses incurred by the Partnership, (ii) administrative costs and expenses of
the General Partner and Reven REIT, including any salaries or other payments to
directors, officers or employees of the General Partner and Reven REIT, and any
accounting and legal expenses of the General Partner and Reven REIT, which
expenses, the Partners hereby agree, are expenses of the Partnership and not the
General Partner and Reven REIT, and (iii) to the extent not included in clauses
(i) or (ii) above, REIT Expenses; provided, that Administrative Expenses shall
not include any administrative costs and expenses incurred by the General
Partner and Reven REIT that are attributable to Properties or interests in a
Subsidiary that are owned by the General Partner and Reven REIT other than
through its ownership interest in the Partnership.

 

“Affiliate” means (i) any Person that, directly or indirectly, controls or is
controlled by or is under common control with such Person, (ii) any other Person
that owns, beneficially, directly or indirectly, 10% or more of the outstanding
capital stock, shares or equity interests of such Person, or (iii) any officer,
director, employee, partner, member, manager or trustee of such Person or any
Person controlling, controlled by or under common control with such Person. For
the purposes of this definition, “control” (including the correlative meanings
of the terms “controlled by” and “under common control with”), as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, through the ownership of voting securities or partnership interests,
contract or otherwise.

 

“Agreed Value” means the fair market value of a Partner’s non-cash Capital
Contribution as of the date of contribution as agreed to by such Partner and the
General Partner. The names and addresses of the Partners, number of Partnership
Units issued to each Partner, and the Agreed Value of non-cash Capital
Contributions as of the date of contribution is set forth on Exhibit A, as it
may be amended or restated from time to time.

 

“Agreement” means this Agreement of Limited Partnership of Reven Housing REIT
OP, L.P., as it may be amended, supplemented or restated from time to time.

 

“Articles” means the Articles of Amendment and Restatement of Reven REIT filed
with the State Department and Assessments and Taxation of the State of Maryland,
as amended, supplemented or restated from time to time.

 

“Board of Directors” means the Board of Directors of Reven REIT.

 

“Capital Account” has the meaning set forth in Section 4.06 hereof.

 

“Capital Account Limitation” has the meaning set forth in Section 4.05(b)
hereof.

 

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“Capital Contribution” means the total amount of cash, cash equivalents and the
Agreed Value of any Property or other asset contributed or agreed to be
contributed, as the context requires, to the Partnership by each Partner
pursuant to the terms of the Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.

 

“Cash Amount” means an amount of cash per Common Unit equal to the Value of the
REIT Shares Amount on the Specified Redemption Date divided by the number of
Common Units tendered for redemption.

 

“Certificate” means any instrument or document that is required under the laws
of the State of Delaware, or any other jurisdiction in which the Partnership
conducts business, to be signed and sworn to by the Partners of the Partnership
(either by themselves or pursuant to the power-of-attorney granted to the
General Partner in Section 8.02 hereof) and filed for recording in the
appropriate public offices within the State of Delaware or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership, to
effect the admission, withdrawal or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the State of Delaware or such other
jurisdiction.

 

“Certificate of Formation” means the Certificate of Formation of the General
Partner filed with the Secretary of State of the State of Delaware, as amended
or supplemented from time to time.

 

“Code” means the Internal Revenue Code of 1986, as amended, and as hereafter
amended from time to time. Reference to any particular provision of the Code
shall mean that provision in the Code at the date hereof and any successor
provision of the Code.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Common Partnership Unit Distribution” has the meaning set forth in
Section 4.04(a)(ii) hereof.

 

“Common Unit” means a Partnership Unit which is designated as a Common Unit of
the Partnership.

 

“Common Unit Economic Balance” has the meaning set forth in Section 5.01(f)
hereof.

 

“Common Unit Transaction” has the meaning set forth in Section 4.05(f) hereof.

 

“Constituent Person” has the meaning set forth in Section 4.05(f) hereof.

 

“Conversion Date” has the meaning set forth in Section 4.05(b) hereof.

 

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“Conversion Factor” means a factor of 1.0, as adjusted as provided in this
definition. The Conversion Factor will be adjusted in the event that Reven REIT
(i) declares or pays a dividend on its outstanding REIT Shares in REIT Shares or
makes a distribution to all holders of its outstanding REIT Shares in REIT
Shares, (ii) subdivides its outstanding REIT Shares or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares. In each of such
events, the Conversion Factor shall be adjusted by multiplying the Conversion
Factor by a fraction, the numerator of which shall be the number of REIT 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 REIT Shares (determined
without the above assumption) issued and outstanding on such date and; provided,
that in the event that an entity other than an Affiliate of Reven REIT shall
become General Partner pursuant to any merger, consolidation or combination of
the General Partner or Reven REIT with or into another entity (the “Successor
Entity”), the Conversion Factor shall be adjusted by multiplying the Conversion
Factor by the number of shares of the Successor Entity into which one REIT Share
is converted pursuant to such merger, consolidation or combination, determined
as of the date of such merger, consolidation or combination. Any adjustment to
the Conversion Factor shall become effective immediately after the effective
date of such event retroactive to the record date, if any, for such event. If,
however, the General Partner receives a Notice of Redemption after the record
date, if any, but prior to the effective date of such event, the Conversion
Factor shall be determined as if the General Partner had received the Notice of
Redemption immediately prior to the record date for event. Notwithstanding the
foregoing, no adjustment shall be made to the Conversion Factor if the number of
outstanding Common Units is otherwise adjusted in the same manner and at the
same time as the adjustment to the number of outstanding REIT Shares.

 

“Conversion Notice” has the meaning set forth in Section 4.05(b) hereof.

 

“Conversion Right” has the meaning set forth in Section 4.05(a) hereof.

 

“Defaulting Limited Partner” means a Limited Partner that has failed to pay any
amount owed to the Partnership under a Partnership Loan within 15 days after
demand for payment thereof is made by the Partnership.

 

“Distributable Amount” has the meaning set forth in Section 5.02(d) hereof.

 

“Economic Capital Account Balances” has the meaning set forth in Section 5.01(f)
hereof.

 

“Equity Incentive Plan” means any equity incentive or compensation plan
hereafter adopted by the Partnership or Reven REIT.

 

“Event of Bankruptcy” as to any Person means (i) the filing of a petition for
relief as to such Person as debtor or bankrupt under the U.S. Bankruptcy Code of
1978, as amended, or similar provision of law of any jurisdiction (except if
such petition is contested by such Person and has been dismissed within 90
days); (ii) the insolvency or bankruptcy of such Person as finally determined by
a court proceeding; (iii) the filing by such Person of a petition or application
to accomplish the same or for the appointment of a receiver or a trustee for
such Person or a substantial part of his assets; or (iv) the commencement of any
proceedings relating to such Person as a debtor under any other reorganization,
arrangement, insolvency, adjustment of debt or liquidation law of any
jurisdiction, whether now in existence or hereinafter in effect, either by such
Person or by another, provided that if such proceeding is commenced by another,
such Person indicates his approval of such proceeding, consents thereto or
acquiesces therein, or such proceeding is contested by such Person and has not
been finally dismissed within 90 days.

 

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“Excepted Holder Limit” has the meaning set forth in the Articles.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Forced Conversion” has the meaning set forth in Section 4.05(c) hereof.

 

“Forced Conversion Notice” has the meaning set forth in Section 4.05(c) hereof.

 

“General Partner” means Reven Housing GP, LLC and its successors and assigns as
a general partner of the Partnership, in each case, that is admitted from time
to time to the Partnership as a general partner pursuant to the Act and this
Agreement and is listed as a general partner on Exhibit A, as such Exhibit A may
be amended from time to time, in such Person’s capacity as a general partner of
the Partnership.

 

“General Partner Loan” means a loan extended by the General Partner to a
Defaulting Limited Partner in the form of a payment on a Partnership Loan by the
General Partner to the Partnership on behalf of the Defaulting Limited Partner.

 

“General Partnership Interest” means the Partnership Interest held by the
General Partner in its capacity as the general partner of the Partnership, which
Partnership Interest is an interest as a general partner under the Act. The
General Partnership Interest will be a number of Common Units held by the
General Partner equal initially to 0.1% of all outstanding Partnership Units.
All other Partnership Units owned by the General Partner and any Partnership
Units owned by any Affiliate or Subsidiary of the General Partner shall be
considered to constitute a Limited Partnership Interest.

 

“Indemnified Party” has the meaning set forth in Section 8.05(f) hereof.

 

“Indemnifying Party” has the meaning set forth in Section 8.05(f) hereof.

 

“Indemnitee” means (i) any Person made a party to a proceeding by reason of its
status as (A) the General Partner or (B) a director, officer or employee of
Reven REIT, the General Partner or the Partnership or any Subsidiary thereof and
(ii) such other Persons (including Reven REIT and Affiliates of Reven REIT, the
General 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.

 

“Independent Director” means a director of Reven REIT who meets the independence
requirements of the NASDAQ as set forth from time to time.

 

“Junior Shares” has the meaning set forth in the definition of “Additional
Securities.”

 

“Limited Partner” means any Person named as a Limited Partner on Exhibit A
attached hereto, as it may be amended or restated from time to time, and any
Person who becomes a Substitute Limited Partner or any additional Limited
Partner, in such Person’s capacity as a Limited Partner in the Partnership.

 

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“Limited Partnership Interest” means a Partnership Interest held by a Limited
Partner at any particular time representing a fractional part of the Partnership
Interest of all Limited Partners, and includes any and all benefits to which the
holder of such a Limited Partnership Interest may be entitled as provided in
this Agreement and in the Act, together with the obligations of such Limited
Partner to comply with all the provisions of this Agreement and of the Act.
Limited Partnership Interests may be expressed as a number of Common Units, LTIP
Units or other Partnership Units.

 

“Liquidating Gains” has the meaning set forth in Section 5.01(f) hereof.

 

“LTIP Unit” means a Partnership Unit which is designated as an LTIP Unit and
which has the rights, preferences and other privileges designated in Section
4.04 hereof and elsewhere in this Agreement in respect of holders of LTIP Units,
including both vested LTIP Units and Unvested LTIP Units. The allocation of LTIP
Units among the Partners shall be set forth on Exhibit A as it may be amended or
restated from time to time.

 

“LTIP Unitholder” means a Partner that holds LTIP Units.

 

“Loss” has the meaning set forth in Section 5.01(g) hereof.

 

“Majority in Interest” means Limited Partners holding more than 50% of the
Percentage Interests of the Limited Partners.

 

“NASDAQ” means the NASDAQ Stock Market.

 

“New Securities” has the meaning set forth in the definition of “Additional
Securities”.

 

“Notice of Redemption” means the Notice of Redemption substantially in the form
attached as Exhibit B hereto.

 

“Offer” has the meaning set forth in Section 7.01(c)(ii) hereof.

 

“Offering” means the underwritten initial public offering of REIT Shares.

 

“Partner” means any General Partner or Limited Partner, and “Partners” means the
General Partner and the Limited Partners.

 

“Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Regulations
Section 1.704-2(i). A Partner’s share of Partner Nonrecourse Debt Minimum Gain
shall be determined in accordance with Regulations Section 1.704-2(0(5).

 

“Partnership” means Reven Housing REIT OP, L.P., a limited partnership formed
and continued under the Act and pursuant to this Agreement, and any successor
thereto.

 

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“Partnership Interest” means an ownership interest in the Partnership held by a
Partner, and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement. A Partnership Interest may be expressed as a number of Common
Units, LTIP Units or other Partnership Units.

 

“Partnership Loan” means a loan from the Partnership to the Partner on the day
the Partnership pays over the excess of the Withheld Amount over the
Distributable Amount to a taxing authority.

 

“Partnership Minimum Gain” has the meaning set forth in Regulations
Section 1.704-2(d). In accordance with Regulations Section 1.704-2(d), the
amount of Partnership Minimum Gain is determined by first computing, for each
Partnership nonrecourse liability, any gain the Partnership would realize if it
disposed of the property subject to that liability for no consideration other
than full satisfaction of the liability, and then aggregating the separately
computed gains. A Partner’s share of Partnership Minimum Gain shall be
determined in accordance with Regulations Section 1.704-2(g)(1).

 

“Partnership Record Date” means the record date established by the General
Partner for the distribution of cash pursuant to Section 5.02 hereof, which
record date shall be the same as the record date established by Reven REIT for a
distribution to its stockholders of some or all of its portion of such
distribution.

 

“Partnership Unit” means a fractional, undivided share of the Partnership
Interests of all Partners issued hereunder, and includes Common Units, LTIP
Units and any other class or series of Partnership Units that may be established
after the date hereof in accordance with the terms hereof. The number of
Partnership Units outstanding and the Percentage Interests represented by such
Partnership Units are set forth on Exhibit A hereto, as it may be amended or
restated from time to time.

 

“Partnership Unit Designation” has the meaning set forth in Section 4.02(a)(i)
hereof.

 

“Percentage Interest” means the percentage determined by dividing the number of
Common Units of a Partner by the sum of the number of Common Units of all
Partners, treating LTIP Units, in accordance with Section 4.04(a), as Common
Units for this purpose.

 

“Person” means any individual, partnership, corporation, limited liability
company, joint venture, trust or other entity.

 

“Preferred Shares” has the meaning set forth in the definition of “Additional
Securities.”

 

“Profit” has the meaning set forth in Section 5.01(g) hereof.

 

“Property” means any property or other investment in which the Partnership,
directly or indirectly, holds an ownership interest.

 

“Redeeming Limited Partner” has the meaning set forth in Section 8.04(a) hereof.

 

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“Redemption Amount” means either the Cash Amount or the REIT Shares Amount.

 

“Redemption Right” has the meaning set forth in Section 8.04(a) hereof.

 

“Redemption Shares” has the meaning set forth in Section 8.05(a) hereof.

 

“Regulations” means the Federal Income Tax Regulations issued under the Code, as
amended from time to time. Reference to any particular provision of the
Regulations shall mean that provision of the Regulations on the date hereof and
any successor provision of the Regulations.

 

“REIT” means a real estate investment trust under Sections 856 through 860 of
the Code.

 

“REIT Expenses” means (i) costs and expenses relating to the formation and
continuity of existence and operation of Reven REIT and any Subsidiaries thereof
(which Subsidiaries shall, for purposes hereof, be included within the
definition of Reven REIT), including taxes, fees and assessments associated
therewith, any and all costs, expenses or fees payable to any director, officer
or employee of Reven REIT, (ii) costs and expenses relating to any public
offering and registration, or private offering, of securities by Reven REIT, and
all statements, reports, fees and expenses incidental thereto, including,
without limitation, underwriting discounts and selling commissions applicable to
any such offering of securities, and any costs and expenses associated with any
claims made by any holders of such securities or any underwriters or placement
agents thereof, (iii) costs and expenses associated with any repurchase of any
securities by Reven REIT, (iv) costs and expenses associated with the
preparation and filing of any periodic or other reports and communications by
Reven REIT under federal, state or local laws or regulations, including filings
with the Commission, (v) costs and expenses associated with compliance by Reven
REIT with laws, rules and regulations promulgated by any regulatory body,
including the Commission and any securities exchange, (vi) costs and expenses
associated with any health, dental, vision, disability, life insurance, 401(k)
plan, incentive plan, bonus plan or other plan providing for compensation or
benefits for the employees of Reven REIT, (vii) costs and expenses incurred by
Reven REIT relating to any issuance or redemption of Partnership Interests and
(viii) all other operating, administrative or financing costs of Reven REIT
incurred in the ordinary course of its business on behalf of or related to the
Partnership.

 

“REIT Shares” means shares of common stock, par value $0.001 per share, of Reven
REIT (or Successor Entity, as the case may be).

 

“REIT Shares Amount” means the number of REIT Shares equal to the product of (X)
the number of Common Units offered for redemption by a Redeeming Limited
Partner, multiplied by (Y) the Conversion Factor as adjusted to and including
the Specified Redemption Date; provided that in the event Reven REIT issues to
all holders of REIT Shares rights, options, warrants or convertible or
exchangeable securities entitling the holders of REIT Shares to subscribe for or
purchase or otherwise acquire additional REIT Shares, or any other securities or
property (collectively, the “Rights”), and such Rights have not expired at the
Specified Redemption Date, then the REIT Shares Amount shall also include such
Rights issuable to a holder of the REIT Shares Amount on the record date fixed
for purposes of determining the holders of REIT Shares entitled to Rights.

 

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“Restriction Notice” has the meaning set forth in Section 8.04(g) hereof.

 

“Reven REIT” means Reven Housing REIT, Inc., a Maryland corporation and the sole
member of Reven Housing GP, LLC.

 

“Rights” has the meaning set forth in the definition of “REIT Shares Amount”
herein.

 

“Rule 144” has the meaning set forth in Section 8.05(c) hereof.

 

“S-3 Eligible Date” has the meaning set forth in Section 8.05(a) hereof.

 

“Safe Harbor Election” has the meaning set forth in Section 10.05(e) hereof.

 

“Safe Harbor Interest” has the meaning set forth in Section 10.05(e) hereof.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Service” means the Internal Revenue Service.

 

“Stock Ownership Limit” has the meaning set forth in the Articles.

 

“Specified Redemption Date” means the first business day of the month that is at
least 60 calendar days after the receipt by the General Partner of a Notice of
Redemption.

 

“Subsidiary” means, with respect to any Person, any corporation or other entity
of which a majority of (i) the voting power of the voting equity securities or
(ii) the outstanding equity interests is owned, directly or indirectly, by such
Person.

 

“Subsidiary Partnership” means any partnership or limited liability company in
which the General Partner, Reven REIT, the Partnership, or a wholly owned
Subsidiary of the General Partner, Reven REIT or the Partnership owns a
partnership or limited liability company interest.

 

“Substitute Limited Partner” means any Person admitted to the Partnership as a
Limited Partner pursuant to Section 9.03 hereof.

 

“Successor Entity” has the meaning set forth in the definition of “Conversion
Factor” herein.

 

“Survivor” has the meaning set forth in Section 7.01(d) hereof.

 

“Tax Matters Partner” has the meaning set forth within Section 6231(a)(7) of the
Code.

 

“Trading Day” means a day on which the principal national securities exchange on
which a security is listed or admitted to trading is open for the transaction of
business or, if a security is not listed or admitted to trading on any national
securities exchange, shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.

 

“Transaction” has the meaning set forth in Section 7.01(c) hereof

 

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“Transfer” has the meaning set forth in Section 9.02(a) hereof.

 

“TRS” means a taxable REIT subsidiary (as defined in Section 856(l) of the Code)
of Reven REIT.

 

“Unvested LTIP Units” has the meaning set forth in Section 4.04(c) hereof.

 

“Value” means, with respect to any security, the average of the daily market
prices of such security for the ten consecutive Trading Days immediately
preceding the date of such valuation. The market price for each such Trading Day
shall be: (i) if the security is listed or admitted to trading on the NASDAQ or
any other national securities exchange, the last reported sale 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, regular way, on such day, (ii) if the security is
not listed or admitted to trading on the NASDAQ or any other national securities
exchange, the last reported sale price on such day or, if no sale takes place on
such day, the average of the closing bid and asked prices on such day, as
reported by a reliable quotation source designated by Reven REIT, or (iii) if
the security is not listed or admitted to trading on the NASDAQ or any national
securities exchange and no such last reported sale price or closing bid and
asked prices are available, the average of the reported high bid and low asked
prices on such day, as reported by a reliable quotation source designated by
Reven REIT, or if there shall be no bid and asked prices on such day, the
average of the high bid and low asked prices, as so reported, on the most recent
day (not more than ten days prior to the date in question) for which prices have
been so reported; provided that if there are no bid and asked prices reported
during the ten days prior to the date in question, the value of the security
shall be determined by the Board of Directors acting in good faith on the basis
of such quotations and other information as it considers, in its reasonable
judgment, appropriate. In the event the security includes any additional rights
(including any Rights), then the value of such rights shall be determined by the
Board of Directors acting in good faith on the basis of such quotations and
other information as it considers, in its reasonable judgment, appropriate.

 

“Vested LTIP Units” has the meaning set forth in Section 4.04(c) hereof.

 

“Vesting Agreement” means each or any, as the context implies, agreement or
instrument entered into by an LTIP Unitholder upon acceptance of an award of
LTIP Units under an Equity Incentive Plan.

 

“Withheld Amount” means any amount required to be withheld by the Partnership to
pay over to any taxing authority as a result of any allocation or distribution
of income to a Partner.

 

Article II

FORMATION OF PARTNERSHIP

 

2.01.         Formation of the Partnership. The Partnership was formed as a
limited partnership pursuant to the provisions of the Act and is continued upon
the terms and conditions set forth in this Agreement. Except as expressly
provided herein to the contrary, the rights and obligations of the Partners and
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.

 

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2.02.         Name. The Name of the Partnership shall be “Reven Housing REIT OP,
L.P.” and the Partnership’s business may be conducted under any other name or
names deemed advisable by the General Partner, including the name of the General
Partner or any Affiliate thereof. The words “Limited Partnership,” “LP,” “L.P.”
or “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 Partners of such change in the next regular
communication to the Partners; provided, however, that failure to so notify the
Partners shall not invalidate such change or the authority granted hereunder.

 

2.03.         Registered Office and Agent; Principal Office. The registered
office of the Partnership in the State of Delaware is located at 2711
Centerville Road, Suite 400, Wilmington, Delaware 19808, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is Corporation Service Company, a Delaware corporation. The
principal office of the Partnership is located at P.O. Box 1459, La Jolla,
California 92038-1459, or such other place as the General Partner may from time
to time designate. Upon such a change of the principal office of the
Partnership, the General Partner shall notify the Partners of such change in the
next regular communication to the Partners; provided, however, that a failure to
so notify the Partners shall not invalidate such change or the authority granted
hereunder. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems necessary
or desirable.

 

2.04.         Term and Dissolution.

 

(a)          The term of the Partnership shall continue in full force and effect
until dissolved upon the first to occur of any of the following events:

 

(i)          the occurrence of an Event of Bankruptcy as to a General Partner or
the dissolution, death, removal or withdrawal of a General Partner unless the
business of the Partnership is continued pursuant to Section 7.03(b) hereof;
provided that if a General Partner is on the date of such occurrence a
partnership, the dissolution of such General Partner as a result of the
dissolution, death, withdrawal, removal or Event of Bankruptcy of a partner in
such partnership shall not be an event of dissolution of the Partnership if the
business of such General Partner is continued by the remaining partner or
partners, either alone or with additional partners, and such General Partner and
such partners comply with any other applicable requirements of this Agreement;

 

(ii)         the passage of 90 days after the sale or other disposition of all
or substantially all of the assets of the Partnership (provided that if the
Partnership receives an installment obligation as consideration for such sale or
other disposition, the Partnership shall continue, unless sooner dissolved under
the provisions of this Agreement, until such time as such installment
obligations are paid in full);

 

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(iii)        the redemption of all Limited Partnership Interests (other than any
Limited Partnership Interests held by the General Partner), unless the General
Partner determines to continue the term of the Partnership by the admission of
one or more additional Limited Partners; or

 

(iv)        the dissolution of the Partnership upon election by the General
Partner.

 

(b)          Upon dissolution of the Partnership (unless the business of the
Partnership is continued pursuant to Section 7.03(b) hereof), the General
Partner (or its trustee, receiver, successor or legal representative) shall
amend or cancel the Certificate and liquidate the Partnership’s assets and apply
and distribute the proceeds thereof in accordance with Section 5.06 hereof.

 

Notwithstanding the foregoing, the liquidating General Partner may either (i)
defer liquidation of, or withhold from distribution for a reasonable time, any
assets of the Partnership (including those necessary to satisfy the
Partnership’s debts and obligations), or (ii) distribute the assets to the
Partners in kind.

 

2.05.         Filing of Certificate and Perfection of Limited Partnership. The
General Partner shall execute, acknowledge, record and file at the expense of
the Partnership the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.

 

2.06.         Certificates Describing Partnership Units. At the request of a
Limited Partner, the General Partner, at its option, may issue a certificate
summarizing the terms of such Limited Partner’s interest in the Partnership,
including the class or series and number of Partnership Units owned and the
Percentage Interest represented by such Partnership Units as of the date of such
certificate. Any such certificate (i) shall be in form and substance as
determined by the General Partner, (ii) shall not be negotiable and (iii) shall
bear a legend to the following effect:

 

THIS CERTIFICATE IS NOT NEGOTIABLE. THE PARTNERSHIP UNITS REPRESENTED BY THIS
CERTIFICATE ARE GOVERNED BY AND TRANSFERABLE ONLY IN ACCORDANCE WITH (A) THE
PROVISIONS OF THE AGREEMENT OF LIMITED PARTNERSHIP OF REVEN HOUSING REIT OP,
L.P., AS AMENDED, SUPPLEMENTED OR RESTATED FROM TIME TO TIME, AND (B) ANY
APPLICABLE FEDERAL OR STATE SECURITIES OR BLUE SKY LAWS.

 

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Article III

BUSINESS OF THE PARTNERSHIP

 

The purpose and nature of the business to be conducted by the Partnership is (i)
to conduct any business that may be lawfully conducted by a limited partnership
organized pursuant to the Act, provided, that such business shall be limited to
and conducted in such a manner as to permit the Reven REIT at all times to
qualify as a REIT, unless Reven REIT otherwise shall have ceased to, or the
Board of Directors determines, pursuant to Section 5.7 of the Articles, that
Reven REIT shall no longer, qualify as a REIT, (ii) to enter into any
partnership, joint venture or other similar arrangement to engage in any of the
foregoing or the ownership of interests in any entity engaged in any of the
foregoing and (iii) to do anything necessary or incidental to the foregoing. In
connection with the foregoing, and without limiting Reven REIT’s right in its
sole and absolute discretion to cease qualifying as a REIT, the Partners
acknowledge the status of Reven REIT as a REIT and that the avoidance of income
and excise taxes on Reven REIT inures to the benefit of all the Partners and not
solely to the General Partner or its Affiliates. Notwithstanding the foregoing,
the Limited Partners agree that Reven REIT may terminate or revoke its status as
a REIT under the Code at any time. Reven REIT shall also be empowered to do any
and all acts and things necessary or prudent to ensure that the Partnership will
not be classified as a “publicly traded partnership” taxable as a corporation
for purposes of Section 7704 of the Code.

 

Article IV

CAPITAL CONTRIBUTIONS AND ACCOUNTS

 

4.01.         Capital Contributions. The General Partner and each Limited
Partner has made or is deemed to have made a capital contribution to the
Partnership in exchange for the Partnership Units set forth opposite such
Partner’s name on Exhibit A hereto, as it may be amended or restated from time
to time by the General Partner to the extent necessary to reflect accurately
sales, exchanges or other Transfers, redemptions, Capital Contributions, the
issuance of additional Partnership Units or similar events having an effect on a
Partner’s ownership of Partnership Units.

 

4.02.         Additional Capital Contributions and Issuances of Additional
Partnership Units. Except as provided in this Section 4.02 or in Section 4.03
hereof, the Partners shall have no right or obligation to make any additional
Capital Contributions or loans to the Partnership. The General Partner may
contribute additional capital to the Partnership, from time to time, and receive
additional Partnership Interests, in the form of Partnership Units, in respect
thereof, in the manner contemplated in this Section 4.02.

 

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(a)          Issuances of Additional Partnership Units.

 

(i)          General. As of the effective date of this Agreement, the
Partnership shall have two classes of Partnership Units, entitled “Common Units”
and “LTIP Units.” The General Partner is hereby authorized to cause the
Partnership to issue such additional Partnership Interests, in the form of
Partnership Units, for any Partnership purpose at any time or from time to time
to the Partners (including the General Partner) or to other Persons for such
consideration and on such terms and conditions as shall be established by the
General Partner in its sole and absolute discretion, all without the approval of
any Limited Partners. The General Partner’s determination that consideration is
adequate shall be conclusive insofar as the adequacy of consideration relates to
whether the Partnership Units are validly issued and fully paid. Any additional
Partnership Units issued thereby may be issued in one or more classes, or one or
more series of any of such classes, with such designations, preferences and
relative, participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to the then-outstanding Partnership
Units held by the Limited Partners, all as shall be determined by the General
Partner in its sole and absolute discretion and without the approval of any
Limited Partner, subject to Delaware law that cannot be preempted by the terms
hereof and as set forth in a written document hereafter attached to and made an
exhibit to this Agreement (each, a “Partnership Unit Designation”), including,
without limitation, (i) the allocations of items of Partnership income, gain,
loss, deduction and credit to each such class or series of Partnership Units;
(ii) the right of each such class or series of Partnership Units to share in
Partnership distributions; and (iii) the rights of each such class or series of
Partnership Units upon dissolution and liquidation of the Partnership; provided,
that no additional Partnership Units shall be issued to the General Partner or
Reven REIT (or any direct or indirect wholly owned Subsidiary of the General
Partner or Reven REIT) unless:

 

(1)         (A) the additional Partnership Units are issued in connection with
an issuance of REIT Shares or other capital stock of, or other interests in,
Reven REIT, which REIT Shares, capital stock or other interests have
designations, preferences and other rights, all such that the economic interests
are substantially similar to the designations, preferences and other rights of
the additional Partnership Units issued to the General Partner or Reven REIT (or
any direct or indirect wholly owned Subsidiary of the General Partner or Reven
REIT) by the Partnership in accordance with this Section 4.02 and (B) the
General Partner or Reven REIT (or any direct or indirect wholly owned Subsidiary
of the General Partner or Reven REIT) shall make a Capital Contribution to the
Partnership in an amount equal to the cash consideration received by Reven REIT
from the issuance of such REIT Shares, capital stock or other interests in Reven
REIT;

 

- 14 -

 

 

(2)         the additional Partnership Units are issued in connection with an
issuance of REIT Shares or other capital stock of, or other interests in, Reven
REIT pursuant to a taxable share dividend declared by Reven REIT, which REIT
Shares, capital stock or interests have designations, preferences and other
rights, all such that the economic interests are substantially similar to the
designations, preferences and other rights of the additional Partnership Units
issued to the General Partner or Reven REIT (or any direct or indirect wholly
owned Subsidiary of the General Partner or Reven REIT) by the Partnership in
accordance with this Section 4.02, provided that (A) if Reven REIT allows the
holders of its REIT Shares to elect whether to receive such dividend in REIT
Shares or other capital stock of, or other interests in Reven REIT or cash, the
Partnership will give the Limited Partners (excluding the General Partner, Reven
REIT or any direct or indirect Subsidiary of the General Partner or Reven REIT)
the same right to elect to receive (I) Partnership Units or cash or, (II) at the
election of Reven REIT, REIT Shares, capital stock or other interests in Reven
REIT or cash, and (B) if the Partnership issues additional Partnership Units
pursuant to this Section 4.02(a)(i)(2), then an amount of income equal to the
value of the Partnership Units received will be allocated to those holders of
Common Units that elect to receive additional Partnership Units;

 

(3)         the additional Partnership Units are issued in exchange for property
owned by the General Partner or Reven REIT (or any direct or indirect wholly
owned Subsidiary of the General Partner or Reven REIT) with a fair market value,
as determined by the General Partner, in good faith, equal to the value of the
Partnership Units; or

 

(4)         the additional Partnership Units are issued to all Partners in
proportion to their respective Percentage Interests.

 

Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Partnership Units for less than fair market
value, so long as the General Partner concludes in good faith that such issuance
is in the best interests of the General Partner and the Partnership. Upon the
issuance of any additional Partnership Units, the General Partner shall amend
Exhibit A as appropriate to reflect such issuance.

 

- 15 -

 

 

(ii)         Upon Issuance of Additional Securities. Reven REIT shall not issue
any Additional Securities (other than REIT Shares issued in connection with an
exchange pursuant to Section 8.04 hereof or REIT Shares or other capital stock
of or other interests in Reven REIT issued in connection with a taxable stock
dividend as described in Section 4.02(a)(i)(2) hereof) or enter into any
transaction that would cause an adjustment to the Conversion Factor or Rights
other than to all holders of REIT Shares, Preferred Shares, Junior Shares or New
Securities, as the case may be, unless (A) the General Partner shall cause the
Partnership to issue to the General Partner or Reven REIT (or any direct or
indirect wholly owned Subsidiary of the General Partner or Reven REIT)
Partnership Units or Rights having designations, preferences and other rights,
all such that the economic interests are substantially similar to those of the
Additional Securities, and (B) Reven REIT, directly or through the General
Partner (or any direct or indirect wholly owned Subsidiary of the General
Partner or another direct or indirect wholly owned Subsidiary of Reven REIT)
contributes the proceeds from the issuance of such Additional Securities and
from any exercise of Rights contained in such Additional Securities to the
Partnership; provided, that Reven REIT is allowed to issue Additional Securities
in connection with an acquisition of Property to be held directly by Reven REIT,
but if and only if, such direct acquisition and issuance of Additional
Securities have been approved by a majority of the Independent Directors.
Without limiting the foregoing, Reven REIT is expressly authorized to issue
Additional Securities for less than fair market value, and the General Partner
is authorized to cause the Partnership to issue to the General Partner or Reven
REIT (or any direct or indirect wholly owned Subsidiary of the General Partner
or Reven REIT) corresponding Partnership Units, so long as (x) the General
Partner concludes in good faith that such issuance is in the best interests of
Reven REIT and the Partnership and (y) Reven REIT, directly or through the
General Partner (or any direct or indirect wholly owned Subsidiary of the
General Partner or another direct or indirect wholly owned Subsidiary of Reven
REIT) contributes all proceeds from such issuance to the Partnership, including
without limitation, the issuance of REIT Shares and corresponding Partnership
Units pursuant to a stock purchase plan providing for purchases of REIT Shares
at a discount from fair market value or pursuant to stock awards, including
stock options that have an exercise price that is less than the fair market
value of the REIT Shares, either at the time of issuance or at the time of
exercise, and restricted or other stock awards approved by the Board of
Directors. For example, in the event Reven REIT issues REIT Shares for a cash
purchase price and Reven REIT, directly or through the General Partner (or any
direct or indirect wholly owned Subsidiary of the General Partner or another
direct or indirect wholly owned Subsidiary of Reven REIT) contributes all of the
proceeds of such issuance to the Partnership as required hereunder, the General
Partner or Reven REIT (or any direct or indirect wholly owned Subsidiary of the
General Partner or Reven REIT) shall be issued a number of additional
Partnership Units equal to the product of (A) the number of such REIT Shares
issued by Reven REIT, the proceeds of which were so contributed, multiplied by
(B) a fraction, the numerator of which is 100%, and the denominator of which is
the Conversion Factor in effect on the date of such contribution.

 

(b)          Certain Contributions of Proceeds of Issuance of REIT Shares. In
connection with any and all issuances of REIT Shares, Reven REIT, directly or
through the General Partner (or any direct or indirect wholly owned Subsidiary
of the General Partner or another direct or indirect wholly owned Subsidiary of
Reven REIT) shall make Capital Contributions to the Partnership of the proceeds
therefrom, provided that if the proceeds actually received and contributed by
Reven REIT, directly or through the General Partner (or any direct or indirect
wholly owned Subsidiary of the General Partner or another direct or indirect
wholly owned Subsidiary of Reven REIT) are less than the gross proceeds of such
issuance as a result of any underwriter’s discount, commissions, placement fees
or other expenses paid or incurred in connection with such issuance, then Reven
REIT, directly or through the General Partner (or any direct or indirect wholly
owned Subsidiary of the General Partner or another direct or indirect wholly
owned Subsidiary of Reven REIT) shall be deemed to have made a Capital
Contribution to the Partnership in the amount equal to the sum of the net
proceeds of such issuance plus the amount of such underwriter’s discount,
commissions, placement fees or other expenses paid by Reven REIT, and the
Partnership shall be deemed simultaneously to have reimbursed such discount,
commissions, placement fees and expenses as an Administrative Expense for the
benefit of the Partnership for purposes of Section 6.05(b) hereof.

 

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(c)          Repurchases of Reven REIT Securities. If Reven REIT shall
repurchase shares of any class or series of its capital stock, the purchase
price thereof and all costs incurred in connection with such repurchase shall be
reimbursed to Reven REIT by the Partnership pursuant to Section 6.05 hereof and
the General Partner shall cause the Partnership to redeem an equivalent number
of Partnership Units of the appropriate class or series held by Reven REIT (or
any direct or indirect wholly owned Subsidiary of Reven REIT) (which, in the
case of REIT Shares, shall be a number equal to the quotient of the number of
such REIT Shares divided by the Conversion Factor).

 

4.03.         Additional Funding. If the General Partner determines that it is
in the best interest of the Partnership to provide for additional Partnership
funds (“Additional Funds”) for any Partnership purpose, the General Partner may
(i) cause the Partnership to obtain such funds from outside borrowings, or (ii)
elect to have the General Partner or any of its Affiliates provide such
Additional Funds to the Partnership through loans or otherwise.

 

4.04.         LTIP Units.

 

(a)          Issuance of LTIP Units. Notwithstanding anything contained herein
to the contrary, the General Partner may from time to time issue LTIP Units to
Persons who provide services to or for the benefit of the Partnership, the
General Partner or Reven REIT for such consideration as the General Partner may
determine to be appropriate, and admit such Persons as Limited Partners. Subject
to the following provisions of this Section 4.04 and the special provisions of
Section 4.05 and Section 5.01(f) hereof, LTIP Units shall be treated as Common
Units, with all of the rights, privileges and obligations attendant thereto. For
purposes of computing the Partners’ Percentage Interests, holders of LTIP Units
shall be treated as Common Unit holders and LTIP Units shall be treated as
Common Units. In particular, the Partnership shall maintain at all times a
one-to-one correspondence between LTIP Units and Common Units for conversion,
distribution and other purposes, including, without limitation, complying with
the following procedures:

 

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(i)          If an Adjustment Event (as defined below) occurs, then the General
Partner shall make a corresponding adjustment to the LTIP Units to maintain a
one-for-one conversion and economic equivalence ratio between Common Units and
LTIP Units. The following shall be “Adjustment Events”: (A) the Partnership
makes a distribution on all outstanding Common Units in Partnership Units, (B)
the Partnership subdivides the outstanding Common Units into a greater number of
units or combines the outstanding Common Units into a smaller number of units,
or (C) the Partnership issues any Partnership Units in exchange for its
outstanding Common Units by way of a reclassification or recapitalization of its
Common Units. If more than one Adjustment Event occurs, the adjustment to the
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. For the avoidance of doubt, the following shall not be
Adjustment Events: (x) the issuance of Partnership Units in a financing,
reorganization, acquisition or other similar business Common Unit Transaction,
(y) the issuance of Partnership Units pursuant to any employee benefit or
compensation plan or distribution reinvestment plan or (z) the issuance of any
Partnership Units to the General Partner or Reven REIT (or any direct or
indirect wholly owned Subsidiary of the General Partner or Reven REIT) in
respect of a capital contribution to the Partnership of proceeds from the sale
of Additional Securities by Reven REIT. If the Partnership takes an action
affecting the Common Units other than actions specifically described above as
“Adjustment Events” and in the opinion of the General Partner such action would
require an adjustment to the LTIP Units to maintain the one-to-one
correspondence described above, the General Partner shall have the right to make
such adjustment to the LTIP Units, to the extent permitted by law and by any
Equity Incentive Plan and Vesting Agreement, in such manner and at such time as
the General Partner, in its sole discretion, may determine to be appropriate
under the circumstances. If an adjustment is made to the 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 requiring such adjustment, which certificate shall be
conclusive evidence of the correctness of such adjustment absent manifest error.
Promptly after filing of such certificate, the Partnership shall deliver a
notice to each LTIP Unitholder setting forth the adjustment to his or her LTIP
Units and the effective date of such adjustment; provided, however, that the
failure to deliver such notice shall not invalidate the adjustment or the
authority granted hereunder, and

 

(ii)         The LTIP Unitholders 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 LTIP Unit equal to the
distributions per Common Unit (the “Common Partnership Unit Distribution”), paid
to holders of Common Units on such Partnership Record Date established by the
General Partner with respect to such distribution; provided, that distributions
of assets on liquidation, dissolution or winding up shall be made solely in
accordance with the Partners’ positive Capital Account balances as provided in
Section 5.06(a). So long as any LTIP Units are outstanding, no distributions
(whether in cash or in kind) shall be authorized, declared or paid on Common
Units, unless equal distributions have been or contemporaneously are authorized,
declared and paid on the LTIP Units; provided, that distributions of assets on
liquidation, dissolution or winding up shall be made solely in accordance with
the Partners’ positive Capital Account balances as provided in Section 5.06(a).

 

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(b)          Priority. Subject to the provisions of this Section 4.04, the
special provisions of Section 4.05 and Section 5.01(f) hereof and any Vesting
Agreement, the LTIP Units shall rank pari passu with the Common Units as to the
payment of regular and special periodic or other distributions; provided, that
distributions of assets on liquidation, dissolution or winding up shall be made
solely in accordance with the Partners’ positive Capital Account balances as
provided in Section 5.06(a). 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 Common Units shall also rank
junior to, or pari passu with, or senior to, as the case may be, the LTIP Units;
provided, that distributions of assets on liquidation, dissolution or winding up
shall be made solely in accordance with the Partners’ positive Capital Account
balances as provided in Section 5.06(a). Subject to the terms of any Vesting
Agreement, an LTIP Unitholder shall be entitled to transfer his or her LTIP
Units to the same extent, and subject to the same restrictions as holders of
Common Units are entitled to transfer their Common Units pursuant to Article IX.

 

(c)          Special Provisions. LTIP Units shall be subject to the following
special provisions:

 

(i)          Vesting Agreements. LTIP Units may, in the sole discretion of the
General Partner, be issued subject to vesting, forfeiture and additional
restrictions on transfer pursuant to the terms of a Vesting Agreement. The terms
of any Vesting Agreement may be modified by the General Partner from time to
time in its sole discretion, subject to any restrictions on amendment imposed by
the relevant Vesting Agreement or by the Equity Incentive Plan, if applicable.
LTIP Units that have vested under the terms of a Vesting Agreement are referred
to as “Vested LTIP Units”; all other LTIP Units shall be treated as “Unvested
LTIP Units.” Upon grant, the grantee of any LTIP Unit shall be treated as a
Partner for all purposes. The Partners acknowledge that the liquidation value of
each LTIP Unit shall be zero upon grant, the amount equal to the zero Capital
Account balance of such LTIP Unit upon grant, for all purposes (including
Section 10.05(e)).

 

(ii)         Forfeiture. Unless otherwise specified in the Vesting Agreement,
upon the occurrence of any event specified in a Vesting Agreement as resulting
in either the right of the Partnership or the General Partner to repurchase LTIP
Units at a specified purchase price or some other forfeiture of any LTIP Units,
then if the Partnership or the General Partner exercises such right to
repurchase or forfeiture in accordance with the applicable Vesting Agreement,
the relevant 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 Vesting Agreement, no consideration or other payment shall be
due with respect to any LTIP Units that have been forfeited, other than any
distributions declared with respect to a Partnership Record Date prior to the
effective date of the forfeiture. In connection with any repurchase or
forfeiture of LTIP Units, the balance of the portion of the Capital Account of
the LTIP Unitholder that is attributable to all of his or her LTIP Units shall
be reduced by the amount, if any, by which it exceeds the product of (A) the
balance of the LTIP Unitholder’s Capital Account attributable to all of the LTIP
Units held prior to the repurchase or forfeiture and (B) the quotient obtained
by dividing (x) the number of LTIP Units, if any, held by the LTIP Unitholder
after the repurchase or forfeiture and (y) the number of LTIP Units held by the
LTIP Unitholder prior to the repurchase or forfeiture.

 

(iii)        Allocations. LTIP Unitholders shall be entitled to certain special
allocations of gain under Section 5.01(f) hereof.

 

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(iv)        Redemption. The Redemption Right provided to Limited Partners under
Section 8.04 hereof shall not apply with respect to LTIP Units unless and until
they are converted to Common Units as provided in clause (v) below and
Section 4.05 hereof.

 

(v)         Conversion to Common Units. Vested LTIP Units are eligible to be
converted into Common Units in accordance with Section 4.05 hereof.

 

(d)          Voting. LTIP Unitholders shall (a) have the same voting rights as
the holders of Common Units, with all Vested LTIP Units and Unvested LTIP Units
voting as a single class with the Common Units and having one vote per LTIP
Unit; and (b) have the additional voting rights that are expressly set forth
below. So long as any LTIP Units remain outstanding, the Partnership shall not,
without the affirmative vote of the holders of a majority of the LTIP Units
(Vested LTIP Units and Unvested LTIP Units) outstanding at the time, given in
person or by proxy, either in writing or at a meeting (voting separately as a
class), amend, alter or repeal, whether by merger, consolidation or otherwise,
the provisions of this Agreement applicable to LTIP Units so as to materially
and adversely affect (as determined in good faith by the General Partner) any
right, privilege or voting power of the LTIP Units or the LTIP Unitholders as
such, unless such amendment, alteration, or repeal affects equally, ratably and
proportionately the rights, privileges and voting powers of the holders of
Common Units; but subject, in any event, to the following provisions:

 

(i)          With respect to any Common Unit Transaction, so long as the LTIP
Units are treated in accordance with Section 4.05(f) hereof, the consummation of
such Common Unit Transaction shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers of the LTIP Units
or the LTIP Unitholders as such; and

 

(ii)         Any creation or issuance of any Partnership Units or of any class
or series of Partnership Interest including without limitation additional Common
Units or LTIP Units, whether ranking senior to, junior to, or on a parity with
the LTIP Units with respect to distributions and the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers of the
LTIP Units or the LTIP Unitholders as such.

 

The foregoing voting provisions will not apply if, at or prior to the time when
the act with respect to which such vote would otherwise be required will be
effected, all outstanding LTIP Units shall have been converted into Common
Units.

 

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4.05.         Conversion of LTIP Units.

 

(a)          Subject to the provisions of this Section 4.05, an LTIP Unitholder
shall have the right (the “Conversion Right”), at such holder’s option, at any
time to convert all or a portion of such holder’s Vested LTIP Units into Common
Units; provided, that a holder may not exercise the Conversion Right for less
than 1,000 Vested LTIP Units or, if such holder holds less than 1,000 Vested
LTIP Units, all of the Vested LTIP Units held by such holder. LTIP Unitholders
shall not have the right to convert Unvested LTIP Units into Common Units until
they become Vested LTIP Units; provided, that when an LTIP Unitholder is
notified of the expected occurrence of an event that will cause such LTIP
Unitholder’s Unvested LTIP Units to become Vested LTIP Units, such LTIP
Unitholder may give the Partnership a Conversion Notice conditioned upon and
effective as of the time of vesting and such Conversion Notice, unless
subsequently revoked by the LTIP Unitholder, 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 Vested LTIP Units into Common Units. In all
cases, the conversion of any LTIP Units into Common Units shall be subject to
the conditions and procedures set forth in this Section 4.05.

 

(b)          A holder of Vested LTIP Units may convert such LTIP Units into an
equal number of fully paid and non-assessable Common Units, giving effect to all
adjustments (if any) made pursuant to Section 4.04 hereof. Notwithstanding the
foregoing, in no event may a holder of Vested LTIP Units convert a number of
Vested LTIP Units that exceeds (x) the Economic Capital Account Balance of such
Limited Partner, to the extent attributable to its ownership of LTIP Units,
divided by (y) the Common Unit Economic Balance, in each case as determined as
of the effective date of conversion (the “Capital Account Limitation”).

 

In order to exercise the Conversion Right, an LTIP Unitholder shall deliver a
notice (a “Conversion Notice”) in the form attached as Exhibit D to the
Partnership (with a copy to the General Partner) not less than ten nor more than
60 days prior to a date (the “Conversion Date”) specified in such Conversion
Notice; provided, that if the General Partner has not given to the LTIP
Unitholders notice of a proposed or upcoming Common Unit Transaction at least 30
days prior to the effective date of such Common Unit Transaction, then LTIP
Unitholders shall have the right to deliver a Conversion Notice until the
earlier of (x) the tenth day after such notice from the General Partner of a
Common Unit Transaction or (y) the third Trading Day immediately preceding the
effective date of such Common Unit Transaction. A Conversion Notice shall be
provided in the manner provided in Section 12.01 hereof. Each LTIP Unitholder
covenants and agrees with the Partnership that all Vested LTIP Units to be
converted pursuant to this Section 4.05(b) shall be free and clear of all liens.
Notwithstanding anything herein to the contrary, a holder of LTIP Units may
deliver a Notice of Redemption pursuant to Section 8.04(a) hereof relating to
those Common Units that will be issued to such holder upon conversion of such
LTIP Units into Common Units in advance of the Conversion Date; provided, that
the redemption of such Common Units by the Partnership shall in no event take
place until after the Conversion Date. For clarity, it is noted that the
objective of this paragraph is to put an LTIP Unitholder in a position where, if
such holder so wishes, the Common Units into which such holder’s Vested LTIP
Units will be converted can be tendered to the Partnership for redemption
simultaneously with such conversion, with the further consequence that, if Reven
REIT elects to assume the Partnership’s redemption obligation with respect to
such Common Units under Section 8.04(b) hereof by delivering to such holder the
REIT Shares Amount, then such holder can have the REIT Shares Amount issued to
such holder simultaneously with the conversion of such holder’s Vested LTIP
Units into Common Units. The General Partner and LTIP Unitholder shall
reasonably cooperate with each other to coordinate the timing of the events
described in the foregoing sentence.

 

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(c)          The Partnership, at any time at the election of the General
Partner, may cause any number of Vested LTIP Units held by an LTIP Unitholder to
be converted (a “Forced Conversion”) into an equal number of Common Units,
giving effect to all adjustments (if any) made pursuant to Section 4.04 hereof;
provided, that the Partnership may not cause Forced Conversion of any LTIP Units
that would not at the time be eligible for conversion at the option of such LTIP
Unitholder pursuant to Section 4.05(b) hereof. In order to exercise its right of
Forced Conversion, the Partnership shall deliver a notice (a “Forced Conversion
Notice”) in the form attached as Exhibit E to the applicable LTIP Unitholder not
less than ten nor more than 60 days prior to the Conversion Date specified in
such Forced Conversion Notice. A Forced Conversion Notice shall be provided in
the manner provided in Section 12.01 hereof and shall be revocable by the
General Partner at any time prior to the Forced Conversion.

 

(d)          A conversion of Vested LTIP Units for which the holder thereof has
given a Conversion Notice or the Partnership has given a Forced Conversion
Notice shall occur automatically after the close of business on the applicable
Conversion Date without any action on the part of such LTIP Unitholder, as of
which time such LTIP Unitholder 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 Common Units issuable upon such conversion. After the
conversion of LTIP Units as aforesaid, the Partnership shall deliver to such
LTIP Unitholder, upon his or her written request, a certificate of the General
Partner certifying the number of Common Units and remaining LTIP Units, if any,
held by such person immediately after such conversion. The Assignee of any
Limited Partner pursuant to Article IX hereof may exercise the rights of such
Limited Partner pursuant to this Section 4.05 and such Limited Partner shall be
bound by the exercise of such rights by the Assignee.

 

(e)          For purposes of making future allocations under Section 5.01(f)
hereof and applying the Capital Account Limitation, the portion of the Economic
Capital Account Balance of the applicable LTIP Unitholder that is treated as
attributable to his or her LTIP Units shall be reduced, as of the date of
conversion, by the product of the number of LTIP Units converted and the Common
Unit Economic Balance.

 

(f)          If the Partnership, the General Partner or Reven REIT shall be a
party to any Common Unit Transaction (including without limitation a merger,
consolidation, unit exchange, self-tender offer for all or substantially all
Common Units or other business combination or reorganization, or sale of all or
substantially all of the Partnership’s assets, but excluding any Common Unit
Transaction which constitutes an Adjustment Event) in each case as a result of
which Common Units shall be exchanged for or converted into the right, or the
holders of Common Units shall otherwise be entitled, to receive cash, securities
or other property or any combination thereof (each of the foregoing being
referred to herein as a “Common Unit Transaction”), then the General Partner
shall, subject to the terms of any applicable Equity Incentive Plan or Vesting
Agreement, exercise immediately prior to the Common Unit Transaction its right
to cause a Forced Conversion with respect to the maximum number of LTIP Units
then eligible for conversion, taking into account any allocations that occur in
connection with the Common Unit Transaction or that would occur in connection
with the Common Unit Transaction if the assets of the Partnership were sold at
the Common 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 Common Unit Transaction (in which case the
Conversion Date shall be the effective date of the Common Unit Transaction).

 

- 22 -

 

 

In anticipation of such Forced Conversion and the consummation of the Common
Unit Transaction, the Partnership shall use commercially reasonable efforts to
cause each LTIP Unitholder to be afforded the right to receive in connection
with such Common Unit Transaction in consideration for the Common Units into
which such LTIP Unitholder’s LTIP Units will be converted the same kind and
amount of cash, securities and other property (or any combination thereof)
receivable upon the consummation of such Common Unit Transaction by a holder of
the same number of Common Units, assuming such holder of Common Units is not a
Person with which the Partnership consolidated or into which the Partnership
merged or which merged into the Partnership or to which such sale or transfer
was made, as the case may be (a “Constituent Person”), or an affiliate of a
Constituent Person. In the event that holders of Common Units have the
opportunity to elect the form or type of consideration to be received upon
consummation of the Common Unit Transaction, prior to such Common Unit
Transaction the General Partner shall give prompt written notice to each LTIP
Unitholder of such election, and shall use commercially reasonable efforts to
afford the LTIP Unitholders the right to elect, by written notice to the General
Partner, the form or type of consideration to be received upon conversion of
each LTIP Unit held by such holder into Common Units in connection with such
Common Unit Transaction. If an LTIP Unitholder fails to make such an election,
such holder (and any of its transferees) shall receive upon conversion of each
LTIP Unit held by such LTIP Unitholder (or by any of such LTIP Unitholder’s
transferees) the same kind and amount of consideration that a holder of a Common
Unit would receive if such Common Unit holder failed to make such an election.

 

Subject to the rights of the Partnership and the General Partner under any
Vesting Agreement and any Equity Incentive Plan, the Partnership shall use
commercially reasonable efforts to cause the terms of any Common Unit
Transaction to be consistent with the provisions of this Section 4.05(f) and to
enter into an agreement with the successor or purchasing entity, as the case may
be, for the benefit of any LTIP Unitholders whose LTIP Units will not be
converted into Common Units in connection with the Common Unit Transaction that
will (i) contain provisions enabling the holders of LTIP Units that remain
outstanding after such Common Unit Transaction to convert their LTIP Units into
securities as comparable as reasonably possible under the circumstances to the
Common Units and (ii) preserve as far as reasonably possible under the
circumstances the distribution, special allocation, conversion, and other rights
set forth in this Agreement for the benefit of the LTIP Unitholders.

 

- 23 -

 

 

4.06.         Capital Accounts. A separate capital account (a “Capital Account”)
shall be established and maintained for each Partner in accordance with
Regulations Section 1.704-1(b)(2)(iv). If (a) a new or existing Partner acquires
an additional Partnership Interest in exchange for more than a de minimis
Capital Contribution, (b) the Partnership distributes to a Partner more than a
de minimis amount of Partnership property as consideration for a Partnership
Interest, (c) the Partnership is liquidated within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g) or (d) the Partnership grants a Partnership
Interest (other than a de minimis Partnership Interest) as consideration for the
provision of services to or for the benefit of the Partnership to an existing
Partner acting in a Partner capacity, or to a new Partner acting in a Partner
capacity or in anticipation of being a Partner, the General Partner shall
revalue the property of the Partnership to its fair market value (as determined
by the General Partner, in its sole and absolute discretion, and taking into
account Section 7701(g) of the Code) in accordance with Regulations Section
1.704-1(b)(2)(iv)(f); provided, that (i) the issuance of any LTIP Unit shall be
deemed to require a revaluation pursuant to this Section 4.06 and (ii) the
General Partner may elect not to revalue the property of the Partnership in
connection with the issuance of additional Partnership Units pursuant to Section
4.02 to the extent it determines, in its sole and absolute discretion, that
revaluing the property of the Partnership is not necessary or appropriate to
reflect the relative economic interests of the Partners. When the Partnership’s
property is revalued by the General Partner, the Capital Accounts of the
Partners shall be adjusted in accordance with Regulations Sections
1.704-1(b)(2)(iv)(f) and (g), which generally require such Capital Accounts to
be adjusted to reflect the manner in which the unrealized gain or loss inherent
in such property (that has not been reflected in the Capital Accounts
previously) would be allocated among the Partners pursuant to Section 5.01
hereof if there were a taxable disposition of such property for its fair market
value (as determined by the General Partner, in its sole and absolute
discretion, and taking into account Section 7701(g) of the Code) on the date of
the revaluation.

 

4.07.         Percentage Interests. If the number of outstanding Common Units or
other class or series of Partnership Units increases or decreases during a
taxable year, each Partner’s Percentage Interest shall be adjusted by the
General Partner effective as of the effective date of each such increase or
decrease to a percentage equal to the number of Common Units or other class or
series of Partnership Units held by such Partner divided by the aggregate number
of Common Units or other class or series of Partnership Units, as applicable,
outstanding after giving effect to such increase or decrease. If the Partners’
Percentage Interests are adjusted pursuant to this Section 4.07, the Profits and
Losses for the taxable year in which the adjustment occurs shall be allocated
between the part of the year ending on the day when that adjustment occurs and
the part of the year beginning on the following day either (i) as if the taxable
year had ended on the date of the adjustment or (ii) based on the number of days
in each part. The General Partner, in its sole and absolute discretion, shall
determine which method shall be used to allocate Profits and Losses for the
taxable year in which the adjustment occurs. The allocation of Profits and
Losses for the earlier part of the year shall be based on the Percentage
Interests before adjustment, and the allocation of Profits and Losses for the
later part shall be based on the adjusted Percentage Interests. In the event
that there is an increase or decrease in the number of outstanding Partnership
Units (other than Common Units or LTIP Units) during a taxable year, the General
Partner shall have similar discretion, as provided in the preceding sentences of
this Section 4.07, to allocate items of Profit and Loss between the part of the
year ending on the day when that increase or decrease occurs and the part of the
year beginning on the following day, and that allocation shall take into account
the Partners’ relative interests in those items of Profit and Loss before and
after such increase or decrease.

 

4.08.         No Interest on Contributions. No Partner shall be entitled to
interest on its Capital Contribution.

 

4.09.         Return of Capital Contributions. No Partner shall be entitled to
withdraw any part of its Capital Contribution or its Capital Account or to
receive any distribution from the Partnership, except as specifically provided
in this Agreement. Except as otherwise provided herein, there shall be no
obligation to return to any Partner or withdrawn Partner any part of such
Partner’s Capital Contribution for so long as the Partnership continues in
existence.

 

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4.10.         No Third-Party Beneficiary. No creditor or other third party
having dealings with the Partnership shall have the right to enforce the right
or obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed that the provisions of this Agreement, except as provided in Section
6.03(h) hereof, shall be solely for the benefit of, and may be enforced solely
by, the parties to this Agreement and their respective permitted successors and
assigns. None of the rights or obligations of the Partners herein set forth to
make Capital Contributions or loans to the Partnership shall be deemed an asset
of the Partnership for any purpose by any creditor or other third party, nor may
such rights or obligations be sold, transferred or assigned by the Partnership
or pledged or encumbered by the Partnership to secure any debt or other
obligation of the Partnership or of any of the Partners. In addition, it is the
intent of the parties hereto that no distribution to any Limited Partner shall
be deemed a return of money or other property in violation of the Act. However,
if any court of competent jurisdiction holds that, notwithstanding the
provisions of this Agreement, any Limited Partner is obligated to return such
money or property, such obligation shall be the obligation of such Limited
Partner and not of the General Partner. Without limiting the generality of the
foregoing, a deficit Capital Account of a Partner shall not be deemed to be a
liability of such Partner nor an asset or property of the Partnership.

 

Article V

PROFITS AND LOSSES; DISTRIBUTIONS

 

5.01.         Allocation of Profit and Loss.

 

(a)          Subject to the other provisions of this Article V, Profits, Losses
and any other items of income, gain, credit and expense for any fiscal year
shall be allocated, for purposes of adjusting the Capital Accounts of the
Partners, to the Partners on a pro rata basis in accordance with their
respective Percentage Interests.

 

(b)          Minimum Gain Chargeback. Notwithstanding any provision to the
contrary, (i) any expense of the Partnership that is a “nonrecourse deduction”
within the meaning of Regulations Section 1.704-2(b)(1) shall be allocated in
accordance with the Partners’ respective Percentage Interests, (ii) any expense
of the Partnership that is a “partner nonrecourse deduction” within the meaning
of Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that
bears the “economic risk of loss” of such deduction in accordance with
Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in
Partnership Minimum Gain within the meaning of Regulations Section 1.704-2(f)(1)
for any Partnership taxable year, then, subject to the exceptions set forth in
Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income
shall be allocated among the Partners in accordance with Regulations
Section 1.704-2(f) and the ordering rules contained in Regulations Section
1.704-2(j), and (iv) if there is a net decrease in Partner Nonrecourse Debt
Minimum Gain within the meaning of Regulations Section 1.704-2(i)(4) for any
Partnership taxable year, then, subject to the exceptions set forth in
Regulations Section 1.704(2)(g), items of gain and income shall be allocated
among the Partners in accordance with Regulations Section 1.704-2(i)(4) and the
ordering rules contained in Regulations Section 1.704-2(j). The manner in which
it is reasonably expected that the deductions attributable to nonrecourse
liabilities will be allocated for purposes of determining a Partner’s share of
the nonrecourse liabilities of the Partnership within the meaning of Regulations
Section 1.752-3(a)(3) shall be in accordance with a Partner’s Percentage
Interest.

 

- 25 -

 

 

(c)          Qualified Income Offset. If a Partner receives in any taxable year
an adjustment, allocation or distribution described in subparagraphs (4), (5) or
(6) of Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a
deficit balance in such Partner’s Capital Account that exceeds the sum of such
Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g)
and 1.704-2(i), such Partner shall be allocated specially for such taxable year
(and, if necessary, later taxable years) items of income and gain in an amount
and manner sufficient to eliminate such deficit Capital Account balance as
quickly as possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d).
After the occurrence of an allocation of income or gain to a Partner in
accordance with this Section 5.01(c), to the extent permitted by Regulations
Section 1.704-1(b), items of expense or loss shall be allocated to such Partner
in an amount necessary to offset the income or gain previously allocated to such
Partner under this Section 5.01(c).

 

(d)          Capital Account Deficits. Loss shall not be allocated to a Limited
Partner to the extent that such allocation would cause a deficit in such
Partner’s Capital Account (after reduction to reflect the items described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of
such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain. Any Loss in excess of that limitation shall be allocated to the
General Partner. After the occurrence of an allocation of Loss to the General
Partner in accordance with this Section 5.01(d), to the extent permitted by
Regulations Section 1.704-1(b), Profit first shall be allocated to the General
Partner in an amount necessary to offset the Loss previously allocated to the
General Partner under this Section 5.01(d).

 

(e)          Allocations Between Transferor and Transferee. If a Partner
transfers any part or all of its Partnership Interest, the distributive shares
of the various items of Profit and Loss allocable among the Partners during such
fiscal year of the Partnership shall be allocated between the transferor and the
transferee Partner either (i) as if the Partnership’s fiscal year had ended on
the date of the transfer or (ii) based on the number of days of such fiscal year
that each was a Partner without regard to the results of Partnership activities
in the respective portions of such fiscal year in which the transferor and the
transferee were Partners. The General Partner, in its sole and absolute
discretion, shall determine which method shall be used to allocate the
distributive shares of the various items of Profit and Loss between the
transferor and the transferee Partner.

 

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(f)          Special Allocations Regarding LTIP Units. Notwithstanding the
provisions of Section 5.01(a), Liquidating Gains shall first be allocated to the
LTIP Unitholders until their Economic Capital Account Balances, to the extent
attributable to their ownership of LTIP Units, are equal to (i) the Common Unit
Economic Balance, multiplied by (ii) the number of their LTIP Units. For this
purpose, “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. The “Economic Capital Account Balances” of the LTIP Unit
holders will be equal to their Capital Account balances plus shares of Partner
Nonrecourse Debt Minimum Gain or Partnership Minimum Gain (after reduction to
reflect the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5)
and (6)) to the extent attributable to their ownership of LTIP Units. Similarly,
the “Common Unit Economic Balance” shall mean (i) the Capital Account balance of
Reven REIT, plus the amount of Reven REIT’s share of any Partner Nonrecourse
Debt Minimum Gain or Partnership Minimum Gain (after reduction to reflect the
items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)), in
either case to the extent attributable to Reven REIT’s direct or indirect
ownership of Common Units and computed on a hypothetical basis after taking into
account all allocations through the date on which any allocation is made under
this Section 5.01(f), divided by (ii) the number of Common Units directly or
indirectly owned by Reven REIT. Any such allocations shall be made among the
LTIP Unitholders in proportion to the amounts required to be allocated to each
under this Section 5.01(f). The parties agree that the intent of this Section
5.01(f) is to make the Capital Account balance associated with each LTIP Unit to
be economically equivalent to the Capital Account balance associated with Common
Units directly or indirectly owned by Reven REIT (on a per-Unit basis).

 

(g)          Definition of Profit and Loss. “Profit” and “Loss” and any items of
income, gain, expense or loss referred to in this Agreement shall be determined
in accordance with federal income tax accounting principles, as modified by
Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss shall not
include items of income, gain and expense that are specially allocated pursuant
to Sections 5.01(b), (c) or (d) hereof.

 

(h)          Allocations for Tax Purposes. All allocations of income, Profit,
gain, Loss, credit and expense (and all items contained therein) for federal
income tax purposes shall be identical to all allocations of such items set
forth in this Section 5.01, except as otherwise required by Section 704(c) of
the Code and Regulations Section 1.704-1(b)(4). With respect to properties
acquired by the Partnership, the General Partner shall have the authority to
elect the method to be used by the Partnership for allocating items of income,
gain and expense as required by Section 704(c) of the Code with respect to such
properties, and such election shall be binding on all Partners.

 

(i)          Purpose and Intent; Construction. Any elections or other decisions
relating to allocations for book or tax purposes under this Agreement shall be
made by the General Partner in any manner that reasonably reflects the purpose
and intention of this Agreement. The provisions of this Article V (and other
related provisions in this Agreement) pertaining to the allocation of items of
Company income, Profit, gain, Loss, credit and expense shall be interpreted
consistently with the Regulations, and to the extent unintentionally
inconsistent with such Regulations, shall be deemed to be modified to the extent
necessary to make such provisions consistent with the Regulations.

 

(j)          Consistent Treatment. The Partners acknowledge and are aware of the
income tax consequences of the allocations made by this Article V and hereby
agree to be bound by the provisions of this Article V in reporting their shares
of Profits, Losses and other items of income, gain, expense, deduction and
credit for federal, state and local income tax purposes.

 

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5.02.         Distribution of Cash.

 

(a)          Subject to Sections 5.02(b), (c) and (d) hereof and to the terms of
any Partnership Unit Designation, the Partnership shall distribute cash at such
times and in such amounts as are determined by the General Partner in its sole
and absolute discretion, to the Partners who are Partners on the Partnership
Record Date with respect to such quarter (or other distribution period) in
proportion with their respective Common Units on the Partnership Record Date.

 

(b)          In accordance with Section 4.04(a)(ii) hereof, the LTIP Unitholders
shall be entitled to receive distributions in an amount per LTIP Unit equal to
the Common Partnership Unit Distribution.

 

(c)          If a new or existing Partner acquires additional Partnership Units
in exchange for a Capital Contribution on any date other than a Partnership
Record Date (other than Partnership Units acquired by the General Partner or
Reven REIT (or any direct or indirect wholly owned Subsidiary of the General
Partner or Reven REIT) in connection with the issuance of additional REIT Shares
or Additional Securities), the cash distribution attributable to such additional
Partnership Units relating to the Partnership Record Date next following the
issuance of such additional Partnership Units shall be reduced in the proportion
to (i) the number of days that such additional Partnership Units are held by
such Partner bears to (ii) the number of days between such Partnership Record
Date and the immediately preceding Partnership Record Date.

 

(d)          Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines to be necessary or
appropriate to cause the Partnership to comply with any withholding requirements
established under the Code or any other federal, state or local law including,
without limitation, pursuant to Sections 1441, 1442, 1445, 1446, 1471 and 1472
of the Code. To the extent that the Partnership is required to withhold and pay
over to any taxing authority any amount resulting from the allocation or
distribution of income to a Partner or assignee (including by reason of Section
1446 of the Code), (i) if the actual amount to be distributed to the Partner
(the “Distributable Amount”) equals or exceeds the Withheld Amount, the entire
Distributable Amount shall be treated as a distribution of cash to such Partner,
and (ii) if the Distributable Amount is less than the Withheld Amount, the
excess of the Withheld Amount over the Distributable Amount shall be treated as
a Partnership Loan from the Partnership to the Partner on the day the
Partnership pays over such amount to a taxing authority. A Partnership Loan
shall be repaid upon the demand of the Partnership or, alternatively, through
withholding by the Partnership with respect to subsequent distributions to the
applicable Partner or assignee and any such distributions so withheld shall be
deemed first to have been distributed to the applicable Partner or assignee and
then immediately repaid to the Partnership.

 

Any amounts treated as a Partnership Loan pursuant to this Section 5.02(d) shall
bear interest at the lesser of (i) 300 basis points above the base rate on
corporate loans at large United States money center commercial banks, as
published from time to time in The Wall Street Journal, or (ii) the maximum
lawful rate of interest on such obligation, such interest to accrue from the
date the Partnership or the General Partner, as applicable, is deemed to extend
the loan until such loan is repaid in full.

 

- 28 -

 

 

(e)          In no event may a Partner receive a distribution of cash with
respect to a Partnership Unit if such Partner is entitled to receive a cash
dividend or other distribution of cash as the holder of record of a REIT Share
for which all or part of such Partnership Unit has been or will be redeemed.

 

5.03.         REIT Distribution Requirements. The General Partner shall use
commercially reasonable efforts, as determined by it in its sole and absolute
discretion, to cause the Partnership to distribute amounts sufficient to enable
Reven REIT to pay distributions to its stockholders that will allow Reven REIT
to (i) meet its distribution requirement for qualification as a REIT as set
forth in Section 857 of the Code and (ii) avoid any federal income or excise tax
liability imposed by the Code, other than to the extent Reven REIT elects to
retain and pay income tax on its net capital gain or other income.

 

5.04.         No Right to Distributions in Kind. No Partner shall be entitled to
demand property other than cash in connection with any distributions by the
Partnership, unless otherwise determined by the General Partner.

 

5.05.         Limitations on Return of Capital Contributions. Notwithstanding
any of the provisions of this Article V, no Partner shall have the right to
receive, and the General Partner shall not have the right to make, a
distribution that includes a return of all or part of a Partner’s Capital
Contributions, unless after giving effect to the return of a Capital
Contribution, the sum of all Partnership liabilities, other than the liabilities
to a Partner for the return of his Capital Contribution, does not exceed the
fair market value of the Partnership’s assets.

 

5.06.         Distributions Upon Liquidation.

 

(a)          Upon liquidation of the Partnership, after payment of, or adequate
provision for, debts and obligations of the Partnership, including any Partner
loans, any remaining assets of the Partnership shall be distributed to all
Partners with positive Capital Accounts in accordance with their respective
positive Capital Account balances.

 

(b)          For purposes of Section 5.06(a) hereof, the Capital Account of each
Partner shall be determined after all adjustments made in accordance with
Sections 5.01 and 5.02 hereof resulting from Partnership operations and from all
sales and dispositions of all or any part of the Partnership’s assets.

 

(c)          Any distributions pursuant to this Section 5.06 shall be made by
the end of the Partnership’s taxable year in which the liquidation occurs (or,
if later, within 90 days after the date of the liquidation). To the extent
deemed advisable by the General Partner, appropriate arrangements (including the
use of a liquidating trust) may be made to assure that adequate funds are
available to pay any contingent debts or obligations.

 

5.07.         Substantial Economic Effect. It is the intent of the Partners that
the allocations of Profit and Loss under the Agreement have substantial economic
effect (or be consistent with the Partners’ interests in the Partnership in the
case of the allocation of losses attributable to nonrecourse debt) within the
meaning of Section 704(b) of the Code as interpreted by the Regulations
promulgated pursuant thereto. Article V and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.

 

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Article VI

 

RIGHTS, OBLIGATIONS AND

POWERS OF THE GENERAL PARTNER

 

6.01.         Management of the Partnership.

 

(a)          Except as otherwise expressly provided in this Agreement, the
General Partner shall have full, complete and exclusive discretion to manage and
control the business of the Partnership for the purposes herein stated, and
shall make all decisions affecting the business and assets of the Partnership.
Subject to the restrictions specifically contained in this Agreement, the powers
of the General Partner shall include, without limitation, the authority to take
the following actions on behalf of the Partnership:

 

(i)          to acquire, purchase, own, operate, lease and dispose of any real
property and any other property or assets including, but not limited to, notes
and mortgages that the General Partner determines are necessary or appropriate
in the business of the Partnership;

 

(ii)         to construct buildings and make other improvements on the
properties owned or leased by the Partnership;

 

(iii)        to authorize, issue, sell, redeem or otherwise purchase any
Partnership Units or any securities (including secured and unsecured debt
obligations of the Partnership, debt obligations of the Partnership convertible
into any class or series of Partnership Units, or Rights relating to any class
or series of Partnership Units) of the Partnership;

 

(iv)        to borrow or lend money for the Partnership, issue or receive
evidences of indebtedness in connection therewith, refinance, increase the
amount of, modify, amend or change the terms of, or extend the time for the
payment of, any such indebtedness, and secure indebtedness by mortgage, deed of
trust, pledge or other lien on the Partnership’s assets;

 

(v)         to pay, either directly or by reimbursement, all operating costs and
general administrative expenses of the Partnership to third parties or to the
General Partner or its Affiliates as set forth in this Agreement;

 

(vi)        to guarantee or become a co-maker of indebtedness of any Subsidiary
of the General Partner or the Partnership, refinance, increase the amount of,
modify, amend or change the terms of, or extend the time for the payment of, any
such guarantee or indebtedness, and secure such guarantee or indebtedness by
mortgage, deed of trust, pledge or other lien on the Partnership’s assets;

 

(vii)       to use assets of the Partnership (including, without limitation,
cash on hand) for any purpose consistent with this Agreement, including, without
limitation, payment, either directly or by reimbursement, of all operating costs
and general and administrative expenses of Reven REIT, the General Partner, the
Partnership or any Subsidiary of the foregoing to third parties or to Reven REIT
or the General Partner as set forth in this Agreement;

 

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(viii)      to lease all or any portion of any of the Partnership’s assets,
whether or not the terms of such leases extend beyond the termination date of
the Partnership and whether or not any portion of the Partnership’s assets so
leased are to be occupied by the lessee, or, in turn, subleased in whole or in
part to others, for such consideration and on such terms as the General Partner
may determine and to further lease property from third parties, including ground
leases;

 

(ix)         to prosecute, defend, arbitrate or compromise any and all claims or
liabilities in favor of or against the Partnership, on such terms and in such
manner as the General Partner may reasonably determine, and similarly to
prosecute, settle or defend litigation with respect to the Partners, the
Partnership or the Partnership’s assets;

 

(x)          to file applications, communicate and otherwise deal with any and
all governmental agencies having jurisdiction over, or in any way affecting, the
Partnership’s assets or any other aspect of the Partnership’s business;

 

(xi)         to make or revoke any election permitted or required of the
Partnership by any taxing authority;

 

(xii)        to maintain such insurance coverage for public liability, fire and
casualty, and any and all other insurance for the protection of the Partnership,
for the conservation of Partnership assets, or for any other purpose convenient
or beneficial to the Partnership, in such amounts and such types, as it shall
determine from time to time;

 

(xiii)       to determine whether or not to apply any insurance proceeds for any
property to the restoration of such property or to distribute the same;

 

(xiv)      to establish one or more divisions of the Partnership, to hire and
dismiss employees of the Partnership or any division of the Partnership, and to
retain legal counsel, accountants, consultants, real estate brokers and such
other persons as the General Partner may deem necessary or appropriate in
connection with the Partnership business and to pay therefor such reasonable
remuneration as the General Partner may deem reasonable and proper;

 

(xv)       to retain other services of any kind or nature in connection with the
Partnership business, and to pay therefor such remuneration as the General
Partner may deem reasonable and proper;

 

(xvi)      to negotiate and conclude agreements on behalf of the Partnership
with respect to any of the rights, powers and authority conferred upon the
General Partner;

 

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(xvii)     to maintain accurate accounting records and to file promptly all
federal, state and local income tax returns on behalf of the Partnership;

 

(xviii)    to distribute Partnership cash or other Partnership assets in
accordance with this Agreement;

 

(xix)       to form or acquire an interest in, and contribute property to, any
further limited or general partnerships, joint ventures or other relationships
that it deems desirable (including, without limitation, the acquisition of
interests in, and the contributions of property to, its Subsidiaries and any
other Person in which it has an equity interest from time to time);

 

(xx)        to establish Partnership reserves for working capital, capital
expenditures, contingent liabilities or any other valid Partnership purpose;

 

(xxi)       to merge, consolidate or combine the Partnership with or into
another Person;

 

(xxii)      to enter into and perform obligations pursuant to underwriting or
other agreements in connection with issuances of securities by the Partnership
or the General Partner or any affiliate thereof;

 

(xxiii)     to do any and all acts and things necessary or prudent to ensure
that the Partnership will not be classified as a “publicly traded partnership”
taxable as a corporation under Section 7704 of the Code or an “investment
company” or a Subsidiary of an investment company under the Investment Company
Act of 1940; and

 

(xxiv)    to take such other action, execute, acknowledge, swear to or deliver
such other documents and instruments, and perform any and all other acts that
the General Partner deems necessary or appropriate for the formation,
continuation and conduct of the business and affairs of the Partnership
(including, without limitation, all actions consistent with allowing Reven REIT
at all times to qualify as a REIT unless Reven REIT voluntarily terminates or
revokes its REIT status) and to possess and enjoy all of the rights and powers
of a general partner as provided by the Act.

 

(b)          Except as otherwise provided herein, to the extent that the duties
of the General Partner require expenditures of funds to be paid to third
parties, the General Partner shall not have any obligations hereunder except to
the extent that Partnership funds are reasonably available to it for the
performance of such duties, and nothing herein contained shall be deemed to
authorize or require the General Partner, in its capacity as such, to expend its
individual funds for payment to third parties or to undertake any individual
liability or obligation on behalf of the Partnership.

 

6.02.         Delegation of Authority. The General Partner may delegate any or
all of its powers, rights and obligations hereunder, and may appoint, employ,
contract or otherwise deal with any Person for the transaction of the business
of the Partnership, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General Partner may
approve.

 

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6.03.         Indemnification and Exculpation of Indemnitees.

 

(a)          The Partnership shall indemnify an Indemnitee from and against any
and all losses, claims, damages, liabilities, joint or several, expenses
(including reasonable legal fees and expenses), judgments, fines, settlements,
and other amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that relate to
the operations of the Partnership as set forth in this Agreement in which any
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, unless it is established 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. 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 6.03(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 6.03(a). Any indemnification pursuant to this Section 6.03 shall be
made only out of the assets of the Partnership.

 

(b)          The Partnership shall reimburse an Indemnitee for reasonable
expenses incurred by an Indemnitee who is a party to a proceeding in advance of
the final disposition of the proceeding 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 6.03 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)          The indemnification provided by this Section 6.03 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.

 

(d)          The Partnership may purchase and maintain insurance, as an expense
of the Partnership, 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 Person against such liability under the provisions of
this Agreement.

 

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(e)          For purposes of this Section 6.03, the Partnership shall be deemed
to have requested an Indemnitee to serve as fiduciary of an employee benefit
plan whenever the performance by it of its duties to the Partnership also
imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 6.03; and actions
taken or omitted by the Indemnitee with respect to an employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in
the interest of the participants and beneficiaries of the plan shall be deemed
to be for a purpose that is not opposed to the best interests of the
Partnership.

 

(f)          In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.

 

(g)          An Indemnitee shall not be denied indemnification in whole or in
part under this Section 6.03 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.

 

(h)          The provisions of this Section 6.03 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.

 

(i)          Any amendment, modification or repeal of this Section 6.03 or any
provision hereof shall be prospective only and shall not in any way affect the
indemnification of an Indemnitee by the Partnership under this Section 6.03 as
in effect immediately prior to such amendment, modification or repeal with
respect to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when claims relating to such matters may
arise or be asserted.

 

6.04.         Liability of the General Partner.

 

(a)          Notwithstanding anything to the contrary set forth in this
Agreement, neither the General Partner, nor any of its Affiliates, directors,
officers, agents or employees shall be liable for monetary damages to the
Partnership or any Partners for losses sustained or liabilities incurred as a
result of errors in judgment or mistakes of fact or law or of any act or
omission if any such party acted in good faith. The General Partner shall not be
in breach of any duty that the General Partner may owe to the Limited Partners
or the Partnership or any other Persons under this Agreement or of any duty
stated or implied by law or equity provided that the General Partner, acting in
good faith, abides by the terms of this Agreement.

 

(b)          The Limited Partners expressly acknowledge that the General Partner
is acting on behalf of the Partnership, the Limited Partners and Reven REIT’s
stockholders collectively, that 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 the tax consequences of
some, but not all, of the Limited Partners) in deciding whether to cause the
Partnership to take (or decline to take) any actions. In the event of a conflict
between the interests of the stockholders of Reven REIT on the one hand and the
Limited Partners on the other, the General Partner shall endeavor in good faith
to resolve the conflict in a manner not adverse to either the stockholders of
Reven REIT or the Limited Partners; provided, however, that for so long as the
General Partner or its Affiliates own a controlling interest in the Partnership,
any such conflict that the General Partner, in its sole and absolute discretion,
determines cannot be resolved in a manner not adverse to either the stockholders
of Reven REIT or the Limited Partners shall be resolved in favor of the
stockholders of Reven REIT. The General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred or benefits not derived by
the Limited Partners in connection with such decisions.

 

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(c)          Subject to its obligations and duties as General Partner set forth
in Section 6.01 hereof, the General Partner may exercise any of the powers
granted to it under 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 it in good faith.

 

(d)          Notwithstanding any other provisions of this Agreement or the Act,
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 Reven REIT to continue to
qualify as a REIT or (ii) to prevent Reven REIT from incurring any taxes under
Section 857, Section 4981 or any other provision of the Code, is expressly
authorized under this Agreement and is deemed approved by all of the Limited
Partners.

 

(e)          Any amendment, modification or repeal of this Section 6.04 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner’s or any of its Affiliates’, officers’,
directors’, agents’ or employees’ liability to the Partnership and the Limited
Partners under this Section 6.04 as in effect immediately prior to such
amendment, modification or repeal with respect to matters occurring, in whole or
in part, prior to such amendment, modification or repeal, regardless of when
claims relating to such matters may arise or be asserted.

 

6.05.         Partnership Obligations.

 

(a)          Except as provided in this Section 6.05 and elsewhere in this
Agreement (including the provisions of Articles V and VI hereof regarding
distributions, payments and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.

 

(b)          All Administrative Expenses shall be obligations of the
Partnership, and the General Partner or Reven REIT shall be entitled to
reimbursement by the Partnership for any expenditure (including Administrative
Expenses) incurred by it on behalf of the Partnership that shall be made other
than out of the funds of the Partnership. All reimbursements hereunder shall be
characterized for federal income tax purposes as expenses of the Partnership
incurred on its behalf, and not as expenses of the General Partner or Reven
REIT.

 

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6.06.         Outside Activities. Subject to Section 6.08 hereof, the
Certificate of Formation and any agreements entered into by the General Partner
or its Affiliates with the Partnership or a Subsidiary, any officer, director,
employee, agent, trustee, Affiliate or member of the General Partner, the
General Partner, Reven REIT and any stockholder of Reven REIT 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 substantially similar or identical to those of the Partnership.
Neither the Partnership nor any of the Limited Partners shall have any rights by
virtue of this Agreement in any such business ventures, interest or activities.
None of the Limited Partners nor any other Person shall have any rights by
virtue of this Agreement or the partnership relationship established hereby in
any such business ventures, interests or activities, and the General Partner and
Reven REIT shall have no obligation pursuant to this Agreement to offer any
interest in any such business ventures, interests and activities to the
Partnership or any Limited Partner, even if such opportunity is of a character
that, if presented to the Partnership or any Limited Partner, could be taken by
such Person.

 

6.07.         Employment or Retention of Affiliates.

 

(a)          Any Affiliate of the General Partner may be employed or retained by
the Partnership and may otherwise deal with the Partnership (whether as a buyer,
lessor, lessee, manager, furnisher of goods or services, broker, agent, lender
or otherwise) and may receive from the Partnership any compensation, price or
other payment therefor that the General Partner determines to be fair and
reasonable.

 

(b)          The Partnership may lend or contribute to its Subsidiaries or other
Persons in which it has an equity investment, and such Persons may borrow funds
from the Partnership, on terms and conditions established in the sole and
absolute discretion of the General Partner. The foregoing authority shall not
create any right or benefit in favor of any Subsidiary or any other Person.

 

(c)          The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions as the
General Partner deems are consistent with this Agreement and applicable law.

 

6.08.         Reven REIT’s Activities. Reven REIT agrees that, generally, all
business activities of Reven REIT, including activities pertaining to the
acquisition, development, ownership of or investment in real properties, shall
be conducted through the Partnership or one or more Subsidiaries of the
Partnership; provided, that Reven REIT may make direct acquisitions or undertake
business activities if such acquisitions or activities are made in connection
with the issuance of Additional Securities by Reven REIT or the business
activity has been approved by a majority of the Independent Directors. If, at
any time, Reven REIT acquires material assets (other than Partnership Units or
other assets on behalf of the Partnership) without transferring such assets to
the Partnership, the definition of “REIT Shares Amount” may be adjusted, as
reasonably determined by the General Partner, to reflect only the fair market
value of a REIT Share attributable to Reven REIT’s Partnership Units directly or
indirectly owned by Reven REIT and other assets held on behalf of the
Partnership.

 

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6.09.         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 Partner, 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, Reven REIT or one or more
nominees, as the General Partner may determine, including Affiliates of the
General Partner or Reven REIT. Reven REIT hereby declares and warrants that any
Partnership assets for which legal title is held in the name of the General
Partner or Reven REIT or any nominee or Affiliate of the General Partner or
Reven REIT shall be held by the General Partner or Reven REIT for the use and
benefit of the Partnership in accordance with the provisions of this Agreement;
provided, that the General Partner or Reven REIT shall use commercially
reasonable efforts to cause beneficial and record title to such assets to be
vested in the Partnership as soon as reasonably practicable. 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.

 

Article VII

 

CHANGES IN GENERAL PARTNER

 

7.01.         Transfer of the General Partner’s Partnership Interest.

 

(a)          Other than to an Affiliate of Reven REIT, the General Partner shall
not transfer all or any portion of its General Partnership Interests, and the
General Partner shall not withdraw as General Partner, except as provided in or
in connection with a transaction contemplated by Sections 7.01(c), (d) or (e)
hereof.

 

(b)          The General Partner agrees that its General Partnership Interest
will at all times be in the aggregate at least 0.1%.

 

(c)          Except as otherwise provided in Section 7.01(d) or (e) hereof,
neither the General Partner nor Reven REIT shall engage in any merger,
consolidation or other combination with or into another Person or sale of all or
substantially all of its assets (other than in connection with a change in the
General Partner’s state of organization or organizational form or Reven REIT’s
state of incorporation or organizational form), in each case which results in a
change of control of the General Partner or Reven REIT (a “Transaction”), unless
at least one of the following conditions is met:

 

(i)          the consent of a Majority in Interest (other than the General
Partner or any Subsidiary of the General Partner or Reven REIT) is obtained;

 

(ii)         as a result of such Transaction, all Limited Partners (other than
the General Partner, Reven REIT and any Subsidiary of the General Partner or
Reven REIT, and, in the case of LTIP Unitholders, subject to the terms of any
applicable Equity Incentive Plan or Vesting Agreement) will receive, or have the
right to receive, for each Partnership Unit an amount of cash, securities or
other property equal or substantially equivalent in value, as determined by the
General Partner in good faith, to the product of the Conversion Factor and the
greatest amount of cash, securities or other property paid in the Transaction to
a holder of one REIT Share in consideration of one REIT Share, provided,
however, that if, in connection with such Transaction, a purchase, tender or
exchange offer (“Offer”) shall have been made to and accepted by the holders of
more than 50% of the outstanding REIT Shares, each holder of Partnership Units
(other than the General Partner, Reven REIT and any Subsidiary of the General
Partner or Reven REIT) shall be given the option to exchange its Partnership
Units for an amount of cash, securities or other property equal or substantially
equivalent in value, as determined by the General Partner in good faith, to the
greatest amount of cash, securities or other property that such Limited Partner
would have received had it (A) exercised its Redemption Right pursuant to
Section 8.04 hereof and (B) sold, tendered or exchanged pursuant to the Offer
the REIT Shares received upon exercise of the Redemption Right immediately prior
to the expiration of the Offer; or

 

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(iii)        either the General Partner or Reven REIT, as applicable, is the
surviving entity in the Transaction and either (A) the holders of REIT Shares do
not receive cash, securities or other property in the Transaction or (B) all
Limited Partners (other than the General Partner, Reven REIT and any Subsidiary
of the General Partner or Reven REIT, and, in the case of LTIP Unitholders,
subject to the terms of any applicable Equity Incentive Plan or Vesting
Agreement) receive for each Partnership Unit an amount of cash, securities or
other property (expressed as an amount per REIT Share) equal or substantially
equivalent in value, as determined by the General Partner in good faith, to the
product of the Conversion Factor and the greatest amount of cash, securities or
other property (expressed as an amount per REIT Share) received in the
Transaction by any holder of REIT Shares.

 

(d)          Notwithstanding Section 7.01(c) hereof, either of the General
Partner or Reven REIT, as applicable, may merge with or into or consolidate with
another entity if immediately after such merger or consolidation (i)
substantially all of the assets of the successor or surviving entity (the
“Survivor”), other than Partnership Units held directly or indirectly by the
General Partner or Reven REIT, are contributed, directly or indirectly, to the
Partnership as a Capital Contribution in exchange for Partnership Units, or for
economically equivalent partnership interests issued by a Subsidiary Partnership
established at the direction of the Board of Directors, with a fair market value
equal to the value of the assets so contributed as determined by the Survivor in
good faith and (ii) the Survivor expressly agrees to assume all obligations of
the General Partner and Reven REIT hereunder. Upon such contribution and
assumption, the Survivor shall have the right and duty to amend this Agreement
as set forth in this Section 7.01(d). The Survivor shall in good faith arrive at
a new method for the calculation of the Cash Amount, the REIT Shares Amount and
Conversion Factor for a Partnership Unit after any such merger or consolidation
so as to approximate the existing method for such calculation as closely as
reasonably possible. Such calculation shall take into account, among other
things, the kind and amount of securities, cash and other property that was
receivable upon such merger or consolidation by a holder of REIT Shares or
options, warrants or other rights relating thereto, and which a holder of
Partnership Units could have acquired had such Partnership Units been exchanged
immediately prior to such merger or consolidation. Such amendment to this
Agreement shall provide for adjustment to such method of calculation, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for with respect to the Conversion Factor. The Survivor also shall in good faith
modify the definition of REIT Shares and make such amendments to Section 8.04
hereof so as to approximate the existing rights and obligations set forth in
Section 8.04 hereof as closely as reasonably possible. The above provisions of
this Section 7.01(d) shall similarly apply to successive mergers or
consolidations permitted hereunder.

 

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(e)          Notwithstanding anything in this Article VII:

 

(i)          The General Partner may transfer all or any portion of its General
Partnership Interest to (A) any wholly owned Subsidiary of the General Partner
or (B) the owner of all of the ownership interests of the General Partner, and
following a transfer of all of its General Partnership Interest, may withdraw as
General Partner; and

 

(ii)         Reven REIT may engage in a transaction required by law or by the
rules of any national securities exchange or over-the-counter interdealer
quotation system on which the REIT Shares are listed or traded.

 

7.02.         Admission of a Substitute or Additional General Partner. A Person
shall be admitted as a substitute or additional General Partner of the
Partnership only if the following terms and conditions are satisfied:

 

(a)          the Person to be admitted as a substitute or additional General
Partner shall have accepted and agreed to be bound by all the terms and
provisions of this Agreement by executing a counterpart thereof and such other
documents or instruments as may be required or appropriate in order to effect
the admission of such Person as a General Partner, and a certificate evidencing
the admission of such Person as a General Partner shall have been filed for
recordation and all other actions required by Section 2.05 hereof in connection
with such admission shall have been performed;

 

(b)          if the Person to be admitted as a substitute or additional General
Partner is a corporation or a partnership, it shall have provided the
Partnership with evidence satisfactory to counsel for the Partnership of such
Person’s authority to become a General Partner and to be bound by the terms and
provisions of this Agreement; and

 

(c)          counsel for the Partnership shall have rendered an opinion (relying
on such opinions from other counsel as may be necessary) that the admission of
the Person to be admitted as a substitute or additional General Partner is in
conformity with the Act, that none of the actions taken in connection with the
admission of such Person as a substitute or additional General Partner will
cause (i) the Partnership to be classified other than as a partnership for
federal income tax purposes, or (ii) the loss of any Limited Partner’s limited
liability.

 

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

 

(a)          Upon the occurrence of an Event of Bankruptcy as to the General
Partner (and its removal pursuant to Section 7.04(a) hereof) or the death,
withdrawal, removal or dissolution of the General Partner (except that, if the
General Partner is on the date of such occurrence a partnership, the withdrawal,
death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of the General Partner if
the business of the General Partner is continued by the remaining partner or
partners), the Partnership shall be dissolved and terminated unless the
Partnership is continued pursuant to Section 7.03(b) hereof. The merger of the
General Partner with or into any entity that is admitted as a substitute or
successor General Partner pursuant to Section 7.02 hereof shall not be deemed to
be the withdrawal, dissolution or removal of the General Partner.

 

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(b)          Following the occurrence of an Event of Bankruptcy as to the
General Partner (and its removal pursuant to Section 7.04(a) hereof) or the
death, withdrawal, removal or dissolution of the General Partner (except that,
if the General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a
partner in, such partnership shall be deemed not to be a dissolution of the
General Partner if the business of such General Partner is continued by the
remaining partner or partners), the Limited Partners, within 90 days after such
occurrence, may elect to continue the business of the Partnership for the
balance of the term specified in Section 2.04 hereof by selecting, subject to
Section 7.02 hereof and any other provisions of this Agreement, a substitute
General Partner by consent of a Majority in Interest. If the Limited Partners
elect to continue the business of the Partnership and admit a substitute General
Partner, the relationship with the Partners and of any Person who has acquired
an interest of a Partner in the Partnership shall be governed by this Agreement.

 

7.04.         Removal of General Partner.

 

(a)          Upon the occurrence of an Event of Bankruptcy as to, or the
dissolution of, the General Partner, the General Partner shall be deemed to be
removed automatically; provided, that if the General Partner is on the date of
such occurrence a partnership, the withdrawal, death, dissolution, Event of
Bankruptcy as to or removal of a partner in such partnership shall be deemed not
to be a dissolution of the General Partner if the business of the General
Partner is continued by the remaining partner or partners. The Limited Partners
may not remove the General Partner, with or without cause.

 

(b)          If the General Partner has been removed pursuant to this
Section 7.04 and the Partnership is continued pursuant to Section 7.03 hereof,
the General Partner shall promptly transfer and assign its General Partnership
Interest in the Partnership to the substitute General Partner approved by a
Majority in Interest in accordance with Section 7.03(b) hereof and otherwise be
admitted to the Partnership in accordance with Section 7.02 hereof. At the time
of assignment, the removed General Partner shall be entitled to receive from the
substitute General Partner the fair market value of the General Partnership
Interest of such removed General Partner. Such fair market value shall be
determined by an appraiser mutually agreed upon by the General Partner and a
Majority in Interest (excluding the General Partner and any Subsidiary of the
General Partner) within ten days following the removal of the General Partner.
In the event that the parties are unable to agree upon an appraiser, the removed
General Partner and a Majority in Interest (excluding the General Partner and
any Subsidiary of the General Partner) each shall select an appraiser. Each such
appraiser shall complete an appraisal of the fair market value of the removed
General Partner’s General Partnership Interest within 30 days of the General
Partner’s removal, and the fair market value of the removed General Partner’s
General Partnership Interest shall be the average of the two appraisals;
provided, that if the higher appraisal exceeds the lower appraisal by more than
20% of the amount of the lower appraisal, the two appraisers, no later than 40
days after the removal of the General Partner, shall select a third appraiser
who shall complete an appraisal of the fair market value of the removed General
Partner’s General Partnership Interest no later than 60 days after the removal
of the General Partner. In such case, the fair market value of the removed
General Partner’s General Partnership Interest shall be the average of the two
appraisals closest in value.

 

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(c)          The General Partnership Interest of a removed General Partner,
during the time after removal until transfer under Section 7.04(b) hereof, shall
be converted to that of a special Limited Partner; provided, however, that such
removed General Partner shall not have any rights to participate in the
management and affairs of the Partnership, and shall not be entitled to any
portion of the income, expense, profit, gain or loss allocations or cash
distributions allocable or payable, as the case may be, to the Limited Partners.
Instead, such removed General Partner shall receive and be entitled only to
retain distributions or allocations of such items that it would have been
entitled to receive in its capacity as General Partner, until the transfer is
effective pursuant to Section 7.04(b) hereof.

 

(d)          All Partners shall have given and hereby do give such consents,
shall take such actions and shall execute such documents as shall be legally
necessary and sufficient to effect all the foregoing provisions of this
Section 7.04.

 

Article VIII

 

RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS

 

8.01.         Management of the Partnership. The Limited Partners shall not
participate in the management or control of Partnership business nor shall they
transact any business for the Partnership, nor shall they have the power to sign
for or bind the Partnership, such powers being vested solely and exclusively in
the General Partner. The Limited Partners covenant and agree not to hold
themselves out in a manner that could reasonably be considered in contravention
of the terms hereof by any third party.

 

8.02.         Power of Attorney. Each Limited Partner by execution of this
Agreement, directly or through execution by power of attorney or other consent,
irrevocably appoints the General Partner its true and lawful attorney-in-fact,
who may act for each Limited Partner and in its name, place and stead, and for
its use and benefit, to sign, acknowledge, swear to, deliver, file or record, at
the appropriate public offices, any and all documents, certificates and
instruments, including without limitation, any and all amendments and
restatements of this Agreement as may be deemed necessary or desirable by the
General Partner to carry out fully the provisions of this Agreement and the Act
in accordance with their terms, which power of attorney is coupled with an
interest and shall survive the death, dissolution or legal incapacity of the
Limited Partner, or the transfer by the Limited Partner of any part or all of
its Partnership Interest.

 

8.03.         Limitation on Liability of Limited Partners. No Limited Partner
shall be liable for any debts, liabilities, contracts or obligations of the
Partnership. A Limited Partner shall be liable to the Partnership only to make
payments of its Capital Contribution, if any, as and when due hereunder. After
its Capital Contribution is fully paid, no Limited Partner shall, except as
otherwise required by the Act, be required to make any further Capital
Contributions or other payments or lend any funds to the Partnership.

 

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8.04.         Redemption Right.

 

(a)          Subject to Section 8.04(c) and the provisions of any agreement
between the Partnership and one or more Limited Partners, beginning on the date
that is twelve months after the date of issuance of any Common Units, each
Limited Partner (other than Reven REIT or any Subsidiary of Reven REIT) shall
have the right (the “Redemption Right”) to require the Partnership to redeem on
a Specified Redemption Date all or a portion of such Limited Partner’s Common
Units at a redemption price equal to and in the form of the Cash Amount.
Notwithstanding the preceding sentence, Common Units issuable upon the
conversion of LTIP Units may be redeemed immediately following such conversion
as provided in Section 4.05(b). The Redemption Right shall be exercised pursuant
to a Notice of Redemption in the form attached hereto as Exhibit B delivered to
the Partnership (with a copy to Reven REIT) by the Limited Partner who is
exercising the Redemption Right (the “Redeeming Limited Partner”), and such
notice shall be irrevocable unless otherwise agreed upon by the General Partner.
No Limited Partner may deliver more than one Notice of Redemption during each
calendar quarter unless otherwise agreed upon by the General Partner. A Limited
Partner may not exercise the Redemption Right for less than one thousand (1,000)
Common Units or, if such Limited Partner holds less than one thousand (1,000)
Common Units, all of the Common Units held by such Limited Partner. The
Redeeming Limited Partner shall have no right, with respect to any Common Units
so redeemed, to receive any distribution paid with respect to Common Units if
the record date for such distribution is on or after the Specified Redemption
Date.

 

(b)          Notwithstanding the provisions of Section 8.04(a) hereof, if a
Limited Partner exercises the Redemption Right by delivering to the Partnership
a Notice of Redemption, then the General Partner may, in its sole and absolute
discretion, elect to cause Reven REIT to purchase directly and acquire some or
all of, and in such event Reven REIT agrees to purchase and acquire, such Common
Units by paying to the Redeeming Limited Partner the REIT Shares Amount,
whereupon Reven REIT shall acquire the Common Units tendered for redemption by
the Redeeming Limited Partner and Reven REIT shall be treated for all purposes
of this Agreement as the owner of such Common Units. In the event Reven REIT
shall exercise its right to satisfy the Redemption Right in the manner described
in the preceding sentence, the Partnership shall have no obligation to pay any
amount to the Redeeming Limited Partner with respect to such Redeeming Limited
Partner’s exercise of the Redemption Right, and each of the Redeeming Limited
Partner, the Partnership and Reven REIT shall treat the transaction between
Reven REIT and the Redeeming Limited Partner as a sale of the Redeeming Limited
Partner’s Common Units to Reven REIT for federal income tax purposes. Each
Redeeming Limited Partner agrees to execute such documents as Reven REIT may
reasonably require in connection with the issuance of REIT Shares upon exercise
of the Redemption Right.

 

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(c)          Notwithstanding the provisions of Sections 8.04(a) and 8.04(b)
hereof, a Limited Partner shall not be entitled to exercise the Redemption Right
if the delivery of REIT Shares to such Limited Partner on the Specified
Redemption Date by Reven REIT pursuant to Section 8.04 (b) hereof (regardless of
whether or not Reven REIT would in fact exercise its rights under Section
8.04(b)) would (i) result in such Limited Partner or any other Person (as
defined in the Articles) owning, directly or indirectly, REIT Shares in excess
of the Stock Ownership Limit or any Excepted Holder Limit (each as defined in
Articles) and calculated in accordance therewith, except as provided in the
Articles, (ii) result in REIT Shares being owned by fewer than 100 persons
(determined without reference to any rules of attribution), (iii) result in
Reven REIT being “closely held” within the meaning of Section 856(h) of the
Code, (iv) cause Reven REIT to own, actually or constructively, 10% or more of
the ownership interests in a tenant (other than a TRS) of Reven REIT’s, the
Partnership’s or a Subsidiary Partnership’s real property, within the meaning of
Section 856(d)(2)(B) of the Code, (v) otherwise cause Reven REIT to fail to
qualify as a REIT under the Code, or (vi) cause the acquisition of REIT Shares
by such Limited Partner to be “integrated” with any other distribution of REIT
Shares or Common Units for purposes of complying with the registration
provisions of the Securities Act. Reven REIT, in its sole and absolute
discretion, may waive the restriction on redemption set forth in this
Section 8.04(c).

 

(d)          Each Redeeming Limited Partner covenants and agrees that all Common
Units tendered for redemption pursuant to this Section 8.04 will be delivered to
the Partnership or Reven REIT free and clear of all liens, claims, and
encumbrances whatsoever and should any such liens, claims or encumbrances exist
or arise with respect to such Common Units, neither the Partnership nor Reven
REIT shall be under any obligation to acquire such Common Units pursuant to
Section 8.04(a) or Section 8.04(b) hereof. Each Redeeming Limited Partner
further agrees that, in the event any state or local property transfer tax is
payable as a result of the transfer of its Common Units to the Partnership or
Reven REIT, such Redeeming Limited Partner shall assume and pay such transfer
tax.

 

(e)          Any Cash Amount to be paid to a Redeeming Limited Partner pursuant
to this Section 8.04 shall be paid on the Specified Redemption Date; provided,
that the General Partner may elect to cause the Specified Redemption Date to be
delayed for up to an additional 180 days to the extent required for Reven REIT
to cause additional REIT Shares to be issued to provide financing to be used to
make such payment of the Cash Amount and may also delay such Specified
Redemption Date to the extent necessary to effect compliance with applicable
requirements of the law. Any REIT Share Amount to be paid to a Redeeming Limited
Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption
Date; provided, that the General Partner may elect to cause the Specified
Redemption Date to be delayed to the extent necessary to effect compliance with
applicable requirements of the law. Notwithstanding the foregoing, Reven REIT
agrees to use its commercially reasonable efforts to cause the closing of the
acquisition of redeemed Common Units hereunder to occur as quickly as reasonably
possible.

 

(f)          Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines to be necessary or
appropriate to cause the General Partner and the Partnership to comply with any
withholding requirements established under the Code or any other federal, state,
local or foreign law that apply upon a Redeeming Limited Partner’s exercise of
the Redemption Right. If a Redeeming Limited Partner believes that it is exempt
from such withholding upon the exercise of the Redemption Right, such Redeeming
Limited Partner must furnish the General Partner with a FIRPTA Certificate in
the form attached hereto as Exhibit C and any similar forms or certificates
required to avoid or reduce the withholding under federal, state, local or
foreign law or such other form as the General Partner may reasonably request. If
the Partnership, Reven REIT or the General Partner is required to withhold and
pay over to any taxing authority any amount upon a Redeeming Limited Partner’s
exercise of the Redemption Right and if the Redemption Amount equals or exceeds
the Withheld Amount, the Withheld Amount shall be treated as an amount received
by such Redeeming Limited Partner in redemption of its Common Units. If,
however, the Redemption Amount is less than the Withheld Amount, the Redeeming
Limited Partner shall not receive any portion of the Redemption Amount, the
Redemption Amount shall be treated as an amount received by such Redeeming
Limited Partner in redemption of its Common Units, and such Redeeming Limited
Partner shall contribute the excess of the Withheld Amount over the Redemption
Amount to the Partnership before the Partnership is required to pay over such
excess to a taxing authority.

 

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(g)          Notwithstanding any other provision of this Agreement, the General
Partner may place appropriate restrictions on the ability of the Limited
Partners to exercise their Redemption Rights as and if deemed necessary or
reasonable to ensure that the Partnership does not constitute a “publicly traded
partnership” under Section 7704 of the Code. If and when the General Partner
determines that imposing such restrictions is necessary, the General Partner
shall give prompt written notice thereof (a “Restriction Notice”) to each of the
Limited Partners, which notice shall be accompanied by a copy of an opinion of
counsel to the Partnership which states that, in the opinion of such counsel,
restrictions are necessary or reasonable in order to prevent the Partnership
from being treated as a “publicly traded partnership” under Section 7704 of the
Code.

 

8.05.         Registration. Subject to the terms of any agreement between the
General Partner or the Partnership and a Limited Partner with respect to Common
Units held by such Limited Partner:

 

(a)          Shelf Registration of the REIT Shares. Following the date on which
Reven REIT becomes eligible to use a registration statement on Form S-3 for the
registration of securities under the Securities Act (the “S-3 Eligible Date”)
and thereafter, and within the time period that may be agreed to by Reven REIT
and a Limited Partner (other than Reven REIT or any Subsidiary of Reven REIT),
Reven REIT shall file with the Commission a shelf registration statement under
Rule 415 of the Securities Act (a “Registration Statement”), or any similar rule
that may be adopted by the Commission, covering (i) the issuance of REIT Shares
issuable upon redemption of the Common Units held by such Limited Partner
(“Redemption Shares”) and/or (ii) the resale by the holder of the Redemption
Shares, with respect to Common Units issued prior to the S-3 Eligible Date;
provided, that Reven REIT shall be required to file only two such registrations
in any 12-month period. In connection therewith, Reven REIT will:

 

(1)         use commercially reasonable efforts to have such Registration
Statement declared effective;

 

(2)         register or qualify the Redemption Shares covered by the
Registration Statement under the securities or blue sky laws of such
jurisdictions within the United States as required by law, and do such other
reasonable acts and things as may be required of it to enable such holders to
consummate the sale or other disposition in such jurisdictions of the Redemption
Shares; provided, that Reven REIT shall not be required to (i) qualify as a
foreign corporation or consent to a general or unlimited service or process in
any jurisdictions in which it would not otherwise be required to be qualified or
so consent or (ii) qualify as a dealer in securities; and

 

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(3)         otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission in connection with a
Registration Statement.

 

Reven REIT further agrees to supplement or make amendments to each Registration
Statement, if required by the rules, regulations or instructions applicable to
the registration form utilized by Reven REIT or by the Securities Act or rules
and regulations thereunder for such Registration Statement. Each Limited Partner
agrees to furnish to Reven REIT, upon request, such information with respect to
the Limited Partner as may be required to complete and file the Registration
Statement.

 

In connection with and as a condition to Reven REIT’s obligations with respect
to the filing of a Registration Statement pursuant to this Section 8.05, each
Limited Partner agrees with Reven REIT that:

 

(i)          it will provide in a timely manner to Reven REIT such information
with respect to the Limited Partner as reasonably required to complete the
Registration Statement or as otherwise required to comply with applicable
securities laws and regulations;

 

(ii)         it will not offer or sell its Redemption Shares until (A) such
Redemption Shares have been included in a Registration Statement and (B) it has
received notice that the Registration Statement covering such Redemption Shares,
or any post-effective amendment thereto, has been declared effective by the
Commission, such notice being satisfied by the posting by the Commission on
www.sec.gov of a notice of effectiveness;

 

(iii)        if Reven REIT determines in its good faith judgment, after
consultation with counsel, that the use of the Registration Statement, including
any pre- or post-effective amendment thereto, or the use of any prospectus
contained in such Registration Statement would require the disclosure of
important information that Reven REIT has a bona fide business purpose for
preserving as confidential or the disclosure of which would impede Reven REIT’s
ability to consummate a significant transaction, upon written notice of such
determination by Reven REIT, the rights of each Limited Partner to offer, sell
or distribute its Redemption Shares pursuant to such Registration Statement or
prospectus or to require Reven REIT to take action with respect to the
registration or sale of any Redemption Shares pursuant to a Registration
Statement (including any action contemplated by this Section 8.05) will be
suspended until the date upon which Reven REIT notifies such Limited Partner in
writing that suspension of such rights for the grounds set forth in this
paragraph is no longer necessary; provided, that Reven REIT may not suspend such
rights for an aggregate period of more than 180 days in any 12-month period.
Notice referenced in this paragraph (iii) shall be deemed sufficient if given
through the issuance of a press release or filing with the Commission and, if
such notice is not publicly distributed, the Limited Partner agrees to keep the
subject information confidential and acknowledge such information may constitute
material non-public information subject to the restrictions under applicable
securities laws; and

 

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(iv)        in the case of the registration of any underwritten equity offering
proposed by Reven REIT (other than any registration by Reven REIT on Form S-8,
or a successor or substantially similar form, of an employee stock option, stock
purchase or compensation plan or of securities issued or issuable pursuant to
any such plan), each Limited Partner will agree, if requested in writing by the
managing underwriter or underwriters administering such offering, not to effect
any offer, sale or distribution of any REIT Shares or Redemption Shares (or any
option or right to acquire REIT Shares or Redemption Shares) during the period
commencing on the tenth day prior to the expected effective date (which date
shall be stated in such notice) of the registration statement covering such
underwritten primary equity offering or, if such offering shall be a “take-down”
from an effective shelf registration statement, the tenth day prior to the
expected commencement date (which date shall be stated in such notice) of such
offering, and ending on the date specified by such managing underwriter in such
written request to the Limited Partners; provided, that no Limited Partner shall
be required to agree not to effect any offer, sale or distribution of its
Redemption Shares for a period of time that is longer than the greater of 90
days or the period of time for which any senior executive of Reven REIT is
required so to agree in connection with such offering. Nothing in this paragraph
shall be read to limit the ability of any Limited Partner to redeem its Common
Units in accordance with the terms of this Agreement.

 

(b)          Listing on Securities Exchange. If Reven REIT lists or maintains
the listing of REIT Shares on any securities exchange or national market system,
it shall, at its expense and as necessary to permit the registration and sale of
the Redemption Shares hereunder, list thereon, maintain and, when necessary,
increase such listing to include such Redemption Shares.

 

(c)          Registration Not Required. Notwithstanding the foregoing, Reven
REIT shall not be required to file or maintain the effectiveness of a
registration statement relating to Redemption Shares after the first date upon
which, in the opinion of counsel to Reven REIT, all of the Redemption Shares
covered thereby could be sold by the holders thereof either (i) pursuant to
Rule 144 under the Securities Act, or any successor rule thereto (“Rule 144”)
without limitation as to amount or manner of sale or (ii) pursuant to Rule 144
in one transaction in accordance with the volume limitations contained in
Rule 144(e).

 

(d)          Allocation of Expenses. The Partnership shall pay all expenses in
connection with the Registration Statement, including without limitation (i) all
expenses incident to filing with the Financial Industry Regulatory Authority,
Inc., (ii) registration fees, (iii) printing expenses, (iv) accounting and legal
fees and expenses, except to the extent holders of Redemption Shares elect to
engage accountants or attorneys in addition to the accountants and attorneys
engaged by Reven REIT or the Partnership, which fees and expenses for such
accountants or attorneys shall be for the account of the holders of the
Redemption Shares, (v) accounting expenses incident to or required by any such
registration or qualification and (vi) expenses of complying with the securities
or blue sky laws of any jurisdictions in connection with such registration or
qualification; provided, however, that neither the Partnership nor Reven REIT
shall be liable for (A) any discounts or commissions to any underwriter or
broker attributable to the sale of Redemption Shares, or (B) any fees or
expenses incurred by holders of Redemption Shares in connection with such
registration that, according to the written instructions of any regulatory
authority, the Partnership or Reven REIT is not permitted to pay.

 

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(e)          Indemnification.

 

(i)          In connection with the Registration Statement, Reven REIT and the
Partnership agree to indemnify each holder of Redemption Shares and each Person
who controls any such holder of Redemption Shares within the meaning of
Section 15 of the Securities Act, against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) caused by
any untrue, or alleged untrue, statement of a material fact contained in the
Registration Statement, preliminary prospectus or prospectus (as amended or
supplemented if Reven REIT shall have furnished any amendments or supplements
thereto) or caused by any omission or alleged omission, to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by any untrue statement, alleged untrue
statement, omission, or alleged omission based upon information furnished to
Reven REIT by the Limited Partner of the holder for use therein. Reven REIT and
each officer, director and controlling person of Reven REIT and the Partnership
shall be indemnified by each Limited Partner or holder of Redemption Shares
covered by the Registration Statement for all such losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) caused by
any untrue, or alleged untrue, statement or any omission, or alleged omission,
based upon information furnished to Reven REIT by the Limited Partner or the
holder for use therein.

 

(ii)         Promptly upon receipt by a party indemnified under this
Section 8.05(e) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be sought
against any indemnifying party under this Section 8.05(e), such indemnified
party shall notify the indemnifying party in writing of the commencement of such
action, but the failure to so notify the indemnifying party shall not relieve it
of any liability that it may have to any indemnified party otherwise than under
this Section 8.05(e) unless such failure shall materially adversely affect the
defense of such action. In case notice of commencement of any such action shall
be given to the indemnifying party as above provided, the indemnifying party
shall be entitled to participate in and, to the extent it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and reasonably satisfactory
to such 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 reasonable fees and expenses of such counsel (other than reasonable costs of
investigation) 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 reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) have been advised by such counsel that representation of such
indemnified party and the indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct (in which case
the indemnified party shall have the right to separate counsel and the
indemnifying party shall pay the reasonable fees and expenses of such separate
counsel, provided that, the indemnifying party shall not be liable for more than
one separate counsel). No indemnifying party shall be liable for any settlement
of any proceeding entered into without its consent.

 

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(f)          Contribution.

 

(i)          If for any reason the indemnification provisions contemplated by
Section 8.05(e) hereof are either unavailable or insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages or liabilities
referred to therein, then the party that would otherwise be required to provide
indemnification or the indemnifying party (in either case, for purposes of this
Section 8.05(f), the “Indemnifying Party”) in respect of such losses, claims,
damages or liabilities, shall contribute to the amount paid or payable by the
party that would otherwise be entitled to indemnification or the indemnified
party (in either case, for purposes of this Section 8.05(f), the “Indemnified
Party”) as a result of such losses, claims, damages, liabilities or expense, in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and the Indemnified Party, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact related to information supplied by the
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party.

 

(ii)         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8.05(f) were determined by pro rata
allocation (even if the holders were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No person or
entity determined to have committed a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.

 

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(iii)        The contribution provided for in this Section 8.05(f) shall survive
the termination of this Agreement and shall remain in full force and effect
regardless of any investigation made by or on behalf of any Indemnified Party.

 

Article IX

 

TRANSFERS OF PARTNERSHIP INTERESTS

 

9.01.         Purchase for Investment.

 

(a)          Each Limited Partner, by its signature below or by its subsequent
admission to the Partnership, hereby represents and warrants to the General
Partner and to the Partnership that the acquisition of such Limited Partner’s
Partnership Units is made for investment purposes only and not with a view to
the resale or distribution of such Partnership Units.

 

(b)          Subject to the provisions of Section 9.02 hereof, each Limited
Partner agrees that such Limited Partner will not sell, assign or otherwise
transfer such Limited Partner’s Partnership Units or any fraction thereof,
whether voluntarily or by operation of law or at judicial sale or otherwise, to
any Person who does not make the representations and warranties to the General
Partner set forth in Section 9.01(a) hereof.

 

9.02.         Restrictions on Transfer of Partnership Units.

 

(a)          Subject to the provisions of Sections 9.02(b) and (c) hereof, no
Limited Partner may offer, sell, assign, hypothecate, pledge or otherwise
transfer all or any portion of such Limited Partner’s Partnership Units, or any
of such Limited Partner’s economic rights as a Limited Partner, whether
voluntarily or by operation of law or at judicial sale or otherwise
(collectively, a “Transfer”) without the consent of the General Partner, which
consent may be granted or withheld in the General Partner’s sole and absolute
discretion; provided, that the term Transfer does not include (a) any redemption
of Common Units by the Partnership or Reven REIT, or acquisition of Common Units
by Reven REIT, pursuant to Section 8.04 or (b) any redemption of Partnership
Units pursuant to any Partnership Unit Designation. The General Partner may
require, as a condition of any Transfer to which it consents, that the
transferor assume all costs incurred by the Partnership in connection therewith
(including, but not limited to, cost of legal counsel).

 

(b)          No Limited Partner may withdraw from the Partnership other than as
a result of a permitted Transfer (i.e., a Transfer consented to as contemplated
by clause (a) above or a Transfer pursuant to Section 9.05 hereof) of all of
such Limited Partner’s Partnership Units pursuant to this Article IX or pursuant
to a redemption of all of such Limited Partner’s Common Units pursuant to
Section 8.04 hereof. Upon the permitted Transfer or redemption of all of a
Limited Partner’s Common Units, such Limited Partner shall cease to be a Limited
Partner.

 

(c)          No Limited Partner may effect a Transfer of its Partnership Units,
in whole or in part, if, in the opinion of legal counsel for the Partnership,
such proposed Transfer would require the registration of the Partnership Units
under the Securities Act or would otherwise violate any applicable federal or
state securities or blue sky law (including investment suitability standards).

 

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(d)          No Transfer by a Limited Partner of its Partnership Units, in whole
or in part, may be made to any Person (including pursuant to the Redemption
Right) if (i) in the opinion of legal counsel for the Partnership, such Transfer
would result in the Partnership being treated as an association taxable as a
corporation (other than a qualified REIT subsidiary within the meaning of
Section 856(i) of the Code), (ii) in the opinion of legal counsel for the
Partnership, it would adversely affect the ability of Reven REIT to continue to
qualify as a REIT or subject Reven REIT to any additional taxes under
Section 857 or Section 4981 of the Code, (iii) 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 (iv) in the opinion of legal counsel for the Partnership, such Transfer is
reasonably likely to cause the Partnership to fail to satisfy the 90% qualifying
income test described in Section 7704(c) of the Code.

 

(e)          Any purported Transfer in contravention of any of the provisions of
this Article IX shall be void ab initio and ineffectual and shall not be binding
upon, or recognized by, the General Partner or the Partnership.

 

(f)          Prior to the consummation of any Transfer under this Article IX,
the transferor and/or the transferee shall deliver to the General Partner such
opinions, certificates and other documents as the General Partner shall request
in connection with such Transfer.

 

9.03.         Admission of Substitute Limited Partner.

 

(a)          Subject to the other provisions of this Article IX, an assignee of
the Partnership Units of a Limited Partner (which shall be understood to include
any purchaser, transferee, donee or other recipient of any disposition of such
Partnership Units) shall be deemed admitted as a Limited Partner of the
Partnership only with the consent of the General Partner, which consent may be
given or withheld by the General Partner in its sole and absolute discretion,
and upon the satisfactory completion of the following:

 

(i)          The assignee shall have accepted and agreed to be bound by the
terms and provisions of this Agreement by executing a counterpart or an
amendment thereof, including a revised Exhibit A, and such other documents or
instruments as the General Partner may require in order to effect the admission
of such Person as a Limited Partner.

 

(ii)         To the extent required, an amended Certificate evidencing the
admission of such Person as a Limited Partner shall have been signed,
acknowledged and filed in accordance with the Act.

 

(iii)        The assignee shall have delivered a letter containing the
representations and warranties set forth in Sections 9.01(a) and 9.01(b) hereof.

 

(iv)        If the assignee is a corporation, partnership, limited liability
company or trust, the assignee shall have provided the General Partner with
evidence satisfactory to counsel for the Partnership of the assignee’s authority
to become a Limited Partner under the terms and provisions of this Agreement.

 

- 50 -

 

 

(v)         The assignee shall have executed a power of attorney containing the
terms and provisions set forth in Section 8.02 hereof.

 

(vi)        The assignee shall have paid all legal fees and other expenses of
the Partnership and the General Partner and filing and publication costs in
connection with its substitution as a Limited Partner.

 

(vii)       The assignee shall have obtained the prior written consent of the
General Partner to its admission as a Substitute Limited Partner, which consent
may be given or denied in the exercise of the General Partner’s sole and
absolute discretion.

 

(b)          For the purpose of allocating Profits and Losses and distributing
cash received by the Partnership, a Substitute Limited Partner shall be treated
as having become, and appearing in the records of the Partnership as, a Partner
upon the filing of the Certificate described in Section 9.03(a)(ii) hereof or,
if no such filing is required, the later of the date specified in the transfer
documents or the date on which the General Partner has received all necessary
instruments of transfer and substitution.

 

(c)          The General Partner and the Substitute Limited Partner shall
cooperate with each other by preparing the documentation required by this
Section 9.03 and making all official filings and publications. The Partnership
shall take all such action as promptly as practicable after the satisfaction of
the conditions in this Article IX to the admission of such Person as a Limited
Partner of the Partnership.

 

9.04.         Rights of Assignees of Partnership Units.

 

(a)          Subject to the provisions of Section 9.01 and Section 9.02 hereof,
except as required by operation of law, the Partnership shall not be obligated
for any purposes whatsoever to recognize the assignment by any Limited Partner
of its Partnership Units until the Partnership has received notice thereof.

 

(b)          Any Person who is the assignee of all or any portion of a Limited
Partner’s Partnership Units, but does not become a Substitute Limited Partner
and desires to make a further assignment of such Partnership Units, shall be
subject to all the provisions of this Article IX to the same extent and in the
same manner as any Limited Partner desiring to make an assignment of its
Partnership Units.

 

9.05.         Effect of Bankruptcy, Death, Incompetence or Termination of a
Limited Partner. The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death of a Limited Partner or a final adjudication that a Limited
Partner is incompetent (which term shall include, but not be limited to,
insanity) shall not cause the termination or dissolution of the Partnership, and
the business of the Partnership shall continue. If an order for relief in a
bankruptcy proceeding is entered against a Limited Partner, the trustee or
receiver of his estate or, if such Limited Partner dies, such Limited Partner’s
executor, administrator or trustee, or, if such Limited Partner is finally
adjudicated incompetent, such Limited Partner’s committee, guardian or
conservator, shall have the rights of such Limited Partner for the purpose of
settling or managing such Limited Partner’s estate property and such power as
the bankrupt, deceased or incompetent Limited Partner possessed to assign all or
any part of such Limited Partner’s Partnership Units and to join with the
assignee in satisfying conditions precedent to the admission of the assignee as
a Substitute Limited Partner.

 

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9.06.         Joint Ownership of Partnership Units. A Partnership Unit may be
acquired by two individuals as joint tenants with right of survivorship,
provided that such individuals either are married or are related and share the
same home as tenants in common. The written consent or vote of both owners of
any such jointly held Partnership Unit shall be required to constitute the
action of the owners of such Partnership Unit; provided, that the written
consent of only one joint owner will be required if the Partnership has been
provided with evidence satisfactory to the counsel for the Partnership that the
actions of a single joint owner can bind both owners under the applicable laws
of the state of residence of such joint owners. Upon the death of one owner of a
Partnership Unit held in a joint tenancy with a right of survivorship, the
Partnership Unit shall become owned solely by the survivor as a Limited Partner
and not as an assignee. The Partnership need not recognize the death of one of
the owners of a jointly-held Partnership Unit until it shall have received
certificated notice of such death. Upon notice to the General Partner from
either owner, the General Partner shall cause the Partnership Unit to be divided
into two equal Partnership Units, which shall thereafter be owned separately by
each of the former owners.

 

Article X

 

BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS

 

10.01.         Books and Records. At all times during the continuance of the
Partnership, the General Partner shall keep or cause to be kept at the
Partnership’s specified office true and complete books of account in accordance
with generally accepted accounting principles, including: (a) a current list of
the full name and last known business address of each Partner, (b) a copy of the
Certificate of Limited Partnership and all certificates of amendment thereto,
(c) copies of the Partnership’s federal, state and local income tax returns and
reports, (d) copies of this Agreement and any financial statements of the
Partnership for the three most recent years and (e) all documents and
information required under the Act. Any Partner or its duly authorized
representative, upon paying the costs of collection, duplication and mailing,
shall be entitled to a copy of such records upon reasonable request.

 

10.02.         Custody of Partnership Funds; Bank Accounts.

 

(a)          All funds of the Partnership not otherwise invested shall be
deposited in one or more accounts maintained in such banking or brokerage
institutions as the General Partner shall determine, and withdrawals shall be
made only on such signature or signatures as the General Partner may, from time
to time, determine.

 

(b)          All deposits and other funds not needed in the operation of the
business of the Partnership may be invested by the General Partner.

 

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10.03.         Fiscal and Taxable Year. The fiscal and taxable year of the
Partnership shall be the calendar year unless otherwise required by the Code.

 

10.04.         Annual Tax Information and Report. The General Partner shall use
commercially reasonable efforts to furnish to each person who was a Limited
Partner at any time during such year, within 120 days after the end of each
fiscal year of the Partnership, the tax information necessary to file such
Limited Partner’s individual tax returns as shall be reasonably required by law.

 

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

 

(a)          The Partnership shall be classified as a partnership for federal
income tax purposes at such time as it is deemed for such purposes to have more
than one member (apart from Reven REIT and the General Partner, to the extent
that the General Partner is classified for federal income tax purposes as a
disregarded entity which is wholly-owned by Reven REIT). Prior to such time, the
Partnership shall be classified as a disregarded entity that is wholly-owned,
directly and indirectly, by Reven REIT.

 

(b)          The General Partner shall be the Tax Matters Partner of the
Partnership. To the extent that the General Partner is classified for federal
income tax purposes as a disregarded entity that is wholly-owned by Reven REIT,
it shall be deemed to act on behalf of Reven REIT as the Tax Matters Partner of
the Partnership. As Tax Matters Partner, the General Partner shall have the
right and obligation to take all actions authorized and required, respectively,
by the Code for the Tax Matters Partner. The General Partner shall have the
right to retain professional assistance in respect of any audit of the
Partnership by the Service and all out-of-pocket expenses and fees incurred by
the General Partner on behalf of the Partnership as Tax Matters Partner shall
constitute Partnership expenses. In the event that the General Partner receives
notice of a final partnership adjustment under Section 6223(a)(2) of the Code,
the General Partner shall either (i) file a court petition for judicial review
of such final adjustment within the period provided under Section 6226(a) of the
Code, a copy of which petition shall be mailed to all Limited Partners on the
date such petition is filed, or (ii) mail a written notice to all Limited
Partners, within such period, that describes the General Partner’s reasons for
determining not to file such a petition.

 

(c)          All elections required or permitted to be made by the Partnership
under the Code or any applicable state or local tax law shall be made by the
General Partner in its sole and absolute discretion.

 

(d)          In the event of a transfer of all or any part of the Partnership
Interest of any Partner, the Partnership, at the option of the General Partner,
may elect pursuant to Section 754 of the Code to adjust the basis of the
Properties. Notwithstanding anything contained in Article V of this Agreement,
any adjustments made pursuant to Section 754 shall affect only the successor in
interest to the transferring Partner and in no event shall be taken into account
in establishing, maintaining or computing Capital Accounts for the other
Partners for any purpose under this Agreement. Each Partner will furnish the
Partnership with all information necessary to give effect to such election.

 

- 53 -

 

 

(e)          The Partners, intending to be legally bound, hereby authorize the
Partnership to make an election (the “Safe Harbor Election”) to have the
“liquidation value” safe harbor provided in Proposed Treasury Regulation §
1.83-3(l) 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 “Safe Harbor”), apply to any interest in the Partnership transferred to a
service provider while the Safe Harbor Election remains effective, to the extent
such interest meets the Safe Harbor requirements (collectively, such interests
are referred to as “Safe Harbor Interests”). The Tax Matters Partner is
authorized and directed to execute and file the Safe Harbor Election on behalf
of the Partnership and the Partners. The Partnership and the Partners (including
any person to whom an interest in the Partnership is transferred in connection
with the performance of services) hereby agree to comply with all requirements
of the Safe Harbor (including forfeiture allocations) with respect to all 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 Safe Harbor
Interests consistent with such final Safe Harbor guidance. The Partnership is
also authorized to take such actions as are necessary to achieve, under the Safe
Harbor, the effect that the election and compliance with all requirements of the
Safe Harbor referred to above would be intended to achieve under Proposed
Treasury Regulation § 1.83-3, including amending this Agreement. In the event
the Safe Harbor Election is rendered moot or obsolete by future legislation that
amends Section 83 of the Code, this Section 10.05(e) shall have no effect. The
liquidation value of each LTIP Unit shall be zero upon grant as provided in
Section 4.04(c)(i).

 

(f)          Each Limited Partner shall be required to provide such information
as reasonably requested by the Partnership in order to determine whether such
Limited Partner (i) owns, directly or constructively (within the meaning of
Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code and
Section 7704(d)(3) of the Code), 5% or more of the value of the Partnership or
(ii) owns, directly or constructively (within the meaning of Section 318(a) of
the Code, as modified by Section 856(d)(5) of the Code and Section 7704(d)(3) of
the Code), 10% or more of (a) the stock, by voting power or value, of a tenant
(other than a “taxable REIT subsidiary” within the meaning of Section 856(d) of
the Code) of the Partnership that is a corporation or (b) the assets or net
profits of a tenant of the Partnership that is a noncorporate entity.

 

Article XI

 

AMENDMENT OF AGREEMENT; MERGER

 

11.01.         Amendment of Agreement.

 

The General Partner’s consent shall be required for any amendment to this
Agreement. The General Partner, without the consent of the Limited Partners, may
amend this Agreement in any respect; provided, that the following amendments
shall require the consent of a Majority in Interest (other than the General
Partner or any Subsidiary of the General Partner):

 

(a)          any amendment affecting the operation of the Conversion Factor or
the Redemption Right (except as otherwise provided herein) in a manner that
adversely affects the Limited Partners in any material respect;

 

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(b)          any amendment that would adversely affect the rights of the Limited
Partners to receive the distributions payable to them hereunder, other than with
respect to the issuance of additional Partnership Units pursuant to Section 4.02
hereof;

 

(c)          any amendment that would alter the Partnership’s allocations of
Profit and Loss to the Limited Partners, other than with respect to the issuance
of additional Partnership Units pursuant to Section 4.02 hereof;

 

(d)          any amendment that would impose on the Limited Partners any
obligation to make additional Capital Contributions to the Partnership; or

 

(e)          any amendment to this Article XI.

 

11.02.         Merger of Partnership.

 

The General Partner, without the consent of the Limited Partners, may (i) merge
or consolidate the Partnership with or into any other domestic or foreign
partnership, limited partnership, limited liability company or corporation or
(ii) sell all or substantially all of the assets of the Partnership in a
transaction pursuant to which the Limited Partners (other than the General
Partner, Reven REIT or any Subsidiary of the General Partner or Reven REIT)
receive the consideration set forth in Section 7.01(c)(ii) hereof or in a
transaction that complies with Section 7.01(c)(iii) or Section 7.01(d) hereof
and may amend this Agreement in connection with any such transaction consistent
with the provisions of this Article XI; provided, that the consent of a Majority
in Interest shall be required in the case of any other (a) merger or
consolidation of the Partnership with or into any other domestic or foreign
partnership, limited partnership, limited liability company or corporation or
(b) sale of all or substantially all of the assets of the Partnership.

 

Article XII

 

GENERAL PROVISIONS

 

12.01.         Notices. All communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally, by email, by press release, by posting on the web site of
the General Partner or upon deposit in the United States mail, registered,
first-class postage prepaid return receipt requested, or via courier to the
Partners at the addresses set forth in Exhibit A attached hereto, as it may be
amended or restated from time to time; provided, that any Partner may specify a
different address by notifying the General Partner in writing of such different
address. Notices to the General Partner and the Partnership shall be delivered
at or mailed to its principal office address set forth in Section 2.03 hereof.
The General Partner and the Partnership may specify a different address by
notifying the Limited Partners in writing of such different address.

 

12.02.         Survival of Rights. Subject to the provisions hereof limiting
Transfers, this Agreement shall be binding upon and inure to the benefit of the
Partners and the Partnership and their permitted respective legal
representatives, successors, transferees and assigns.

 

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12.03.         Additional Documents. Each Partner agrees to perform all further
acts and execute, swear to, acknowledge and deliver all further documents that
may be reasonable, necessary, appropriate or desirable to carry out the
provisions of this Agreement or the Act.

 

12.04.         Severability. If any provision of this Agreement shall be
declared illegal, invalid or unenforceable in any jurisdiction, then such
provision shall be deemed to be severable from this Agreement (to the extent
permitted by law) and in any event such illegality, invalidity or
unenforceability shall not affect the remainder hereof. To the extent permitted
under applicable law, the severed provision shall be interpreted or modified so
as to be enforceable to the maximum extent permitted by law.

 

12.05.         Entire Agreement. This Agreement and exhibits attached hereto
constitute the entire Agreement of the Partners and supersede all prior written
agreements and prior and contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.

 

12.06.         Pronouns and Plurals. When the context in which words are used in
the Agreement indicates that such is the intent, words in the singular number
shall include the plural and the masculine gender shall include the neuter or
female gender as the context may require.

 

12.07.         Headings. The Article headings or sections in this Agreement are
for convenience only and shall not be used in construing the scope of this
Agreement or any particular Article.

 

12.08.         Counterparts. This Agreement may be executed by hand or by power
of attorney in several counterparts, each of which shall be deemed to be an
original copy and all of which together shall constitute one and the same
instrument binding on all parties hereto, notwithstanding that all parties shall
not have signed the same counterpart.

 

12.09.         Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.

 

12.10.         Exclusive Forum for Certain Litigation. Unless the General
Partner consents in writing to the selection of an alternative forum, the sole
and exclusive forum for (i) any derivative action or proceeding brought on
behalf of the Partnership, (ii) any action asserting a claim of breach of a
fiduciary duty owed by any manager, member, director or officer or other
employee of the Partnership or the General Partner to the Partnership or the
Partnership’s limited Partners, (iii) any action asserting a claim against
Partnership or the General Partner or any manager, member, director or officer
or other employee of the Partnership or the General Partner arising pursuant to
any provision of the Act or this Agreement (in each case, as they may be amended
from time to time), or (iv) any action asserting a claim against the Partnership
or the General Partner or any manager, member, director or officer or other
employee of the Partnership or the General Partner governed by the internal
affairs doctrine shall be a state court located within the State of Delaware
(or, if no state court located within the State of Delaware has jurisdiction,
the federal district court for the District of Delaware).

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have hereunder affixed their signatures
to this Agreement of Limited Partnership, all as of the 1st day of June 2015.

 

  GENERAL PARTNER:       Reven Housing GP, LLC         By:   Reven Housing REIT,
Inc.   Its: Sole Member         By: /s/ Chad. M. Carpenter     Name:  Chad M.
Carpenter     Title:  Chief Executive Officer         LIMITED PARTNER:      
Reven Housing REIT, INC.         By: /s/ Chad. M. Carpenter     Name:  Chad M.
Carpenter     Title:  Chief Executive Officer         LIMITED PARTNER:      
LIMITED PARTNER:

 

Exhibit A-1

   

 

EXHIBIT A

 

Partners, Capital Contributions and Percentage Interests

 

Name   Capital Contribution   Percentage Interest Reven Housing REIT, Inc.   The
99.9% interest in the net assets of Reven Housing REIT, Inc. pursuant to that
certain Contribution Agreement dated June 1, 2015 between the Partnership, Reven
Housing GP, LLC and Reven Housing REIT, Inc.   99.9%           Reven Housing GP,
LLC   The 0.1% interest in the net assets of Reven Housing REIT, Inc. pursuant
to that certain Contribution Agreement dated June 1, 2015 between the
Partnership, Reven Housing GP, LLC and Reven Housing REIT, Inc.   0.1%

 

Exhibit A-2

   

 

EXHIBIT B

 

NOTICE OF REDEMPTION

 

In accordance with Section 8.04 of the Agreement of Limited Partnership, as
amended (the “Agreement”), of Reven Housing REIT OP, L.P., the undersigned
hereby irrevocably (i) presents for redemption [_______] Common Units in Reven
Housing REIT OP, L.P. in accordance with the terms of the Agreement and the
Redemption Right referred to in Section 8.04 thereof, (ii) surrenders such
Common Units and all right, title and interest therein and (iii) directs that
the Cash Amount or REIT Shares Amount (as defined in the Agreement) as
determined by the General Partner deliverable upon exercise of the Redemption
Right be delivered to the address specified below, and if REIT Shares (as
defined in the Agreement) are to be delivered, such REIT 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 title to
such Common Units, free and clear of the rights and interests of any person or
entity other than the Partnership or the General Partner; (b) has the full
right, power and authority to cause the redemption of the Common Units as
provided herein; and (c) has obtained the approval of all persons or entities,
if any, having the right to consent to or approve the Common Units for
redemption.

 

Dated: _______

 

Name of Limited Partner:

 

      (Signature of Limited Partner or Authorized   Representative)          
(Mailing Address)           (City)  (State)  (Zip Code)       Signature
Guaranteed by:    

 

If REIT Shares are to be issued, issue to:

 

Please insert social security or identifying number:

 

Name:

 

Exhibit B-1

   

 

EXHIBIT C-1

 

CERTIFICATION OF NON-FOREIGN STATUS
(FOR REDEEMING LIMITED PARTNERS THAT ARE ENTITIES)

 

Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the
“Code”), in the event of a disposition by a non-U.S. person of a partnership
interest in a partnership in which (i) 50% or more of the value of the gross
assets consists of United States real property interests (“USRPIs”), as defined
in Section 897(c) of the Code, and (ii) 90% or more of the value of the gross
assets consists of USRPIs, cash, and cash equivalents, the transferee will be
required to withhold 10% of the amount realized by the non-U.S. person upon the
disposition. To inform Reven Housing GP, LLC (the “General Partner”) and Reven
Housing REIT OP, L.P. (the “Partnership”) that no withholding is required with
respect to the redemption by [_______] (“Partner”) of its Common Units in the
Partnership, the undersigned hereby certifies the following on behalf of
Partner:

 

1.Partner is not a foreign corporation, foreign partnership, foreign trust, or
foreign estate, as those terms are defined in the Code and the Treasury
regulations thereunder.

 

2.Partner is not a disregarded entity as defined in Treasury Regulation
Section 1.1445-2(b)(2)(iii).

 

3.The U.S. employer identification number of Partner is [_______].

 

4.The principal business address of Partner is: [_______] and Partner’s place of
incorporation is [_______].

 

5.Partner agrees to inform the General Partner if it becomes a foreign person at
any time during the three-year period immediately following the date of this
notice.

 

6.Partner understands that this certification may be disclosed to the Internal
Revenue Service by the General Partner and that any false statement contained
herein could be punished by fine, imprisonment, or both.

 

  PARTNER:             By:     Name:     Title:  

 

Exhibit C-1

   

 

Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct, and complete,
and I further declare that I have authority to sign this document on behalf of
Partner.

 

Date:                                                                           
Name:       Title:

 

Exhibit C-2

   

 

EXHIBIT C-2

 

CERTIFICATION OF NON-FOREIGN STATUS
(FOR REDEEMING LIMITED PARTNERS THAT ARE INDIVIDUALS)

 

Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the
“Code”), in the event of a disposition by a non-U.S. person of a partnership
interest in a partnership in which (i) 50% or more of the value of the gross
assets consists of United States real property interests (“USRPIs”), as defined
in Section 897(c) of the Code, and (ii) 90% or more of the value of the gross
assets consists of USRPIs, cash, and cash equivalents, the transferee will be
required to withhold 10% of the amount realized by the non-U.S. person upon the
disposition. To inform Reven Housing GP, LLC (the “General Partner”) and Reven
Housing REIT OP, L.P. (the “Partnership”) that no withholding is required with
respect to my redemption of my Common Units in the Partnership, I, [_______],
hereby certify the following:

 

1.I am not a nonresident alien for purposes of U.S. income taxation.

 

2.My U.S. taxpayer identification number (social security number) is [_______].

 

3.My home address is: [_______].

 

4.I agree to inform the General Partner promptly if I become a nonresident alien
at any time during the three-year period immediately following the date of this
notice.

 

5.I understand that this certification may be disclosed to the Internal Revenue
Service by the General Partner and that any false statement contained herein
could be punished by fine, imprisonment, or both.

 

      Name:   Title:

 

Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct, and complete.

 

      Name:   Title:

 

Exhibit C-2-1

   

 

EXHIBIT D

 

NOTICE OF ELECTION BY PARTNER TO CONVERT
LTIP UNITS INTO COMMON UNITS

 

The undersigned holder of LTIP Units hereby irrevocably: (i) elects to convert
the number of LTIP Units in Reven Housing REIT OP, L.P. (the “Partnership”) set
forth below into Common Units in accordance with the terms of the Agreement of
Limited Partnership of the Partnership, as amended; and (ii) directs that any
cash in lieu of Common 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 LTIP Units,
free and clear of the rights or interests of any other person or entity other
than the Partnership or the General Partner; (b) has the full right, power, and
authority to cause the conversion of such 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 to or approve such conversion.

 

Name of Holder:        (Please Print:  Exact Name as Registered with
Partnership)

 

Number of LTIP Units to be Converted:     

 

Date of this Notice:     

 

  (Signature of Holder:  Sign Exact Name as Registered with Partnership)

 

  (Street Address)

 

      (City) (State) (Zip Code)

 

Signature Guaranteed by:     

 

Exhibit D-1

   

 

EXHIBIT E

 

NOTICE OF ELECTION BY PARTNERSHIP TO FORCE CONVERSION
OF LTIP UNITS INTO COMMON UNITS

 

Reven Housing REIT OP, L.P. (the “Partnership”) hereby elects to cause the
number of LTIP Units held by the holder of LTIP Units set forth below to be
converted into Common Units in accordance with the terms of the Agreement of
Limited Partnership of the Partnership, as amended, effective as of [_______]
(the “Conversion Date”).

 

Name of Holder:        (Please Print:  Exact Name as Registered with
Partnership)

 

Number of LTIP Units to be Converted:     

 

Date of this Notice: