Exhibit 10.1


 


AMENDED AND
RESTATED


AGREEMENT
OF LIMITED PARTNERSHIP


 


OF


 


STAG
INDUSTRIAL OPERATING PARTNERSHIP, L.P.


a Delaware
limited partnership


 


THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP AN
OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER
DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT
AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.


 

















 


TABLE OF CONTENTS


 


	
  Article

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
  DEFINED
  TERMS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  ORGANIZATIONAL
  MATTERS

  	
  14

  
	
   

  	
  Section 2.1

  	
  Continuation

  	
  14

  
	
   

  	
  Section 2.2

  	
  Name

  	
  14

  
	
   

  	
  Section 2.3

  	
  Registered
  Office and Agent; Principal Office

  	
  14

  
	
   

  	
  Section 2.4

  	
  Power
  of Attorney

  	
  14

  
	
   

  	
  Section 2.5

  	
  Term

  	
  16

  
	
   

  	
  Section 2.6

  	
  Partnership
  Interests Are Securities

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  PURPOSE

  	
   

  	
  16

  
	
   

  	
  Section 3.1

  	
  Purpose
  and Business

  	
  16

  
	
   

  	
  Section 3.2

  	
  Powers

  	
  16

  
	
   

  	
  Section 3.3

  	
  Representations
  and Warranties by the Parties

  	
  17

  
	
   

  	
  Section 3.4

  	
  Not
  Publicly Traded

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  CAPITAL
  CONTRIBUTIONS

  	
  19

  
	
   

  	
  Section 4.1

  	
  Capital
  Contributions of the Partners

  	
  19

  
	
   

  	
  Section 4.2

  	
  Issuances
  of Additional Partnership Interests

  	
  19

  
	
   

  	
  Section 4.3

  	
  Contribution
  of Proceeds of Issuance of Securities by STAG REIT

  	
  20

  
	
   

  	
  Section 4.4

  	
  Additional
  Funds

  	
  21

  
	
   

  	
  Section 4.5

  	
  Preemptive
  Rights

  	
  21

  
	
   

  	
  Section 4.6

  	
  LTIP
  Units

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  DISTRIBUTIONS

  	
  24

  
	
   

  	
  Section 5.1

  	
  Requirement
  and Characterization of Distributions

  	
  24

  
	
   

  	
  Section 5.2

  	
  Amounts
  Withheld

  	
  25

  
	
   

  	
  Section 5.3

  	
  Distributions
  upon Liquidation

  	
  25

  
	
   

  	
  Section 5.4

  	
  Restricted
  Distributions

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  ALLOCATIONS

  	
  26

  
	
   

  	
  Section 6.1

  	
  Allocations
  for Capital Account Purposes

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  MANAGEMENT
  AND OPERATIONS OF BUSINESS

  	
  28

  
	
   

  	
  Section 7.1

  	
  Management

  	
  28

  
	
   

  	
  Section 7.2

  	
  Certificate
  of Limited Partnership

  	
  31

  
	
   

  	
  Section 7.3

  	
  Restrictions
  on General Partner Authority

  	
  32

  
	
   

  	
  Section 7.4

  	
  Reimbursement
  of the General Partner

  	
  32

  
	
   

  	
  Section 7.5

  	
  Outside
  Activities of the General Partner

  	
  33

  
	
   

  	
  Section 7.6

  	
  Contracts
  with Affiliates

  	
  33

  
	
   

  	
  Section 7.7

  	
  Indemnification

  	
  34

  
	
   

  	
  Section 7.8

  	
  Liability
  of the General Partner

  	
  36

  
	
   

  	
  Section 7.9

  	
  Other
  Matters Concerning the General Partner

  	
  37

  
	
   

  	
  Section 7.10

  	
  Title to Partnership
  Assets

  	
  37

  
					



 


i

















 


TABLE OF CONTENTS


(continued)


 


	
  Article

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 7.11

  	
  Reliance
  by Third Parties

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  RIGHTS
  AND OBLIGATIONS OF LIMITED PARTNERS

  	
  38

  
	
   

  	
  Section 8.1

  	
  Limitation
  of Liability

  	
  38

  
	
   

  	
  Section 8.2

  	
  Management
  of Business

  	
  38

  
	
   

  	
  Section 8.3

  	
  Outside
  Activities of Limited Partners

  	
  39

  
	
   

  	
  Section 8.4

  	
  Return
  of Capital

  	
  39

  
	
   

  	
  Section 8.5

  	
  Rights
  of Limited Partners Relating to the Partnership

  	
  39

  
	
   

  	
  Section 8.6

  	
  Redemption
  Right

  	
  40

  
	
   

  	
  Section 8.7

  	
  Conversion
  of LTIP Units

  	
  42

  
	
   

  	
  Section 8.8

  	
  Voting
  Rights of LTIP Units

  	
  44

  
	
   

  	
  Section 8.9

  	
  Merger
  and Sale of Assets

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  BOOKS,
  RECORDS, ACCOUNTING AND REPORTS

  	
  45

  
	
   

  	
  Section 9.1

  	
  Records
  and Accounting

  	
  45

  
	
   

  	
  Section 9.2

  	
  Fiscal
  Year

  	
  45

  
	
   

  	
  Section 9.3

  	
  Reports

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  TAX
  MATTERS

  	
  46

  
	
   

  	
  Section 10.1

  	
  Preparation
  of Tax Returns

  	
  46

  
	
   

  	
  Section 10.2

  	
  Tax
  Elections

  	
  46

  
	
   

  	
  Section 10.3

  	
  Tax
  Matters Partner

  	
  46

  
	
   

  	
  Section 10.4

  	
  Organizational
  Expenses

  	
  48

  
	
   

  	
  Section 10.5

  	
  Withholding

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  11

  	
  TRANSFERS
  AND WITHDRAWALS

  	
  49

  
	
   

  	
  Section 11.1

  	
  Transfer

  	
  49

  
	
   

  	
  Section 11.2

  	
  Transfer
  of General Partner’s Partnership Interest

  	
  50

  
	
   

  	
  Section 11.3

  	
  Transfer
  of Limited Partners’ Partnership Interests

  	
  51

  
	
   

  	
  Section 11.4

  	
  Substituted
  Limited Partners

  	
  52

  
	
   

  	
  Section 11.5

  	
  Assignees

  	
  53

  
	
   

  	
  Section 11.6

  	
  General
  Provisions

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  ADMISSION
  OF PARTNERS

  	
  54

  
	
   

  	
  Section 12.1

  	
  Admission
  of Successor General Partner

  	
  54

  
	
   

  	
  Section 12.2

  	
  Admission
  of Additional Limited Partners

  	
  54

  
	
   

  	
  Section 12.3

  	
  Amendment
  of Agreement and Certificate of Limited Partnership

  	
  55

  
	
   

  	
  Section 12.4

  	
  Limit
  on Number of Partners

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  DISSOLUTION,
  LIQUIDATION AND TERMINATION

  	
  55

  
	
   

  	
  Section 13.1

  	
  Dissolution

  	
  55

  
	
   

  	
  Section 13.2

  	
  Winding
  Up

  	
  56

  
	
   

  	
  Section 13.3

  	
  Compliance
  with Timing Requirements of Regulations

  	
  58

  
	
   

  	
  Section 13.4

  	
  Deemed
  Contribution and Distribution

  	
  58

  
					



 


ii

















 


TABLE OF CONTENTS


(continued)


 


	
  Article

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 13.5

  	
  Rights
  of Limited Partners

  	
  58

  
	
   

  	
  Section 13.6

  	
  Notice
  of Dissolution

  	
  58

  
	
   

  	
  Section 13.7

  	
  Termination
  of Partnership and Cancellation of Certificate of Limited Partnership

  	
  59

  
	
   

  	
  Section 13.8

  	
  Reasonable
  Time for Winding Up

  	
  59

  
	
   

  	
  Section 13.9

  	
  Waiver
  of Partition

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  14

  	
  AMENDMENT
  OF PARTNERSHIP AGREEMENT; MEETINGS

  	
  59

  
	
   

  	
  Section 14.1

  	
  Amendment
  of Partnership Agreement

  	
  59

  
	
   

  	
  Section 14.2

  	
  Meetings
  of the Partners

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  15

  	
  GENERAL
  PROVISIONS

  	
  62

  
	
   

  	
  Section 15.1

  	
  Addresses
  and Notice

  	
  62

  
	
   

  	
  Section 15.2

  	
  Titles
  and Captions

  	
  62

  
	
   

  	
  Section 15.3

  	
  Pronouns
  and Plurals

  	
  62

  
	
   

  	
  Section 15.4

  	
  Further
  Action

  	
  62

  
	
   

  	
  Section 15.5

  	
  Binding
  Effect

  	
  62

  
	
   

  	
  Section 15.6

  	
  Creditors

  	
  62

  
	
   

  	
  Section 15.7

  	
  Waiver

  	
  62

  
	
   

  	
  Section 15.8

  	
  Counterparts

  	
  63

  
	
   

  	
  Section 15.9

  	
  Applicable
  Law

  	
  63

  
	
   

  	
  Section 15.10

  	
  Invalidity
  of Provisions

  	
  63

  
	
   

  	
  Section 15.11

  	
  Entire
  Agreement

  	
  63

  
	
   

  	
  Section 15.12

  	
  No
  Rights as Stockholders of STAG REIT

  	
  63

  
					



 


EXHIBITS


 


Exhibit A — Partners’ Contributions and
Partnership Interests


Exhibit B — Capital Account Maintenance


Exhibit C — Special Allocation Rules


Exhibit D — Notice of Redemption


Exhibit E — Constructive Ownership Definition


Exhibit F — Notice of Conversion


Exhibit G — Notice of Forced Conversion


Exhibit H
— Schedule of Partners’ Ownership with Respect to Tenants


 


iii

















 


AMENDED AND
RESTATED


AGREEMENT
OF LIMITED PARTNERSHIP


OF


STAG
INDUSTRIAL OPERATING PARTNERSHIP, L.P.


 


THIS
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF STAG INDUSTRIAL
OPERATING PARTNERSHIP, L.P. (this “Agreement”), dated as of
[                            ,
2010], is entered into by and among STAG Industrial GP, LLC, a Delaware limited
liability company (the “General Partner”), STAG Investments III, LLC, a
Delaware limited liability company (“Fund III”), STAG REIT (as defined
below) and the other Persons (as defined below) that are party hereto from time
to time and whose names are set forth on Exhibit A as attached
hereto (as it may be amended from time to time) (each, a “Limited Partner”).


 


WHEREAS,
the limited partnership was formed on December 21, 2009 and an Agreement
of Limited Partnership, dated as of December 21, 2009 (the “Original
Agreement”), was entered into between the General Partner, as general
partner, and STAG REIT and STAG Investments II, LLC, a Delaware limited
liability company (“Fund II”), as the initial limited partners.


 


WHEREAS,
Fund II assigned its limited partnership interest in the limited partnership to
Fund III (the General Partner, STAG REIT and Fund III collectively, the “Initial
Partners”);


 


WHEREAS,
STAG REIT and the other Partners intend to consolidate the ownership and
management of a portfolio of primarily single tenant real estate assets in STAG
Industrial Operating Partnership, L.P. (the “Partnership”) through the
Initial Public Offering (as defined below) and a series of contribution
transactions involving the Limited Partners (other than STAG REIT) pursuant to
that certain Master Roll-Up Agreement dated as of July 2, 2010 (the “Roll-Up
Agreement”) and those certain contribution agreements dated as of
[            
      , 2010] (each, a “Contribution Agreement”
and together, the “Contribution Agreements”);


 


WHEREAS,
the Initial Partners desire to amend and restate the Original Agreement in its
entirety and enter into this Amended and Restated Agreement of Limited
Partnership of the Partnership.


 


NOW,
THEREFORE, in consideration of the mutual covenants herein contained, and other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the foregoing recitals are incorporated into, and made a part of
this Agreement, and the parties hereto hereby further agree as follows:


 


ARTICLE 1

DEFINED TERMS


 


The
following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this Agreement.


 


“704(c) Value”
means (i) in the case of Contributed Property, the fair market value of
such Contributed Property or other consideration at the time of contribution,
and (ii) in the case 


 

















 


of
Adjusted Property, the fair market value of such Adjusted Property at the time
its carrying value is adjusted pursuant to Exhibit B, in each case
as determined by the General Partner using such reasonable method of valuation
as it may adopt.  Subject to Exhibit B
hereof, the General Partner shall, in its sole and absolute discretion, use
such method as it deems reasonable and appropriate to allocate the aggregate of
the 704(c) Values of Contributed Properties or Adjusted Properties in a
single or integrated transaction among separate properties on a basis
proportional to their respective fair market values.


 


“Act”
means the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §17-101,
et seq., as it may be amended from time to time, and any successor to such
statute.


 


“Additional
Funds” has the meaning set forth in Section 4.4(a) hereof.


 


“Additional
Limited Partner” means a Person admitted to the Partnership as a Limited
Partner pursuant to Section 12.2 hereof and who is shown as such on
the books and records of the Partnership.


 


“Adjusted
Capital Account” means the Capital Account maintained for each Partner as
of the end of each Partnership taxable year (i) increased by any amounts
which such Partner is obligated to restore pursuant to any provision of this
Agreement or is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(l) and 1.704-2(i)(5) and
(ii) decreased by the items described in Regulations Sections
1.704-l(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.


 


“Adjusted
Capital Account Deficit” means, with respect to any Partner, the deficit
balance, if any, in such Partner’s Adjusted Capital Account as of the end of
the relevant Partnership taxable year.


 


“Adjusted
Property” means any property, the Carrying Value of which has been adjusted
pursuant to Exhibit B hereof.


 


“Adjustment
Event” means any of the following events: (i) the Partnership makes a
distribution on all outstanding OP Units in OP Units; (ii) the Partnership
subdivides the outstanding OP Units into a greater number of OP Units or
combines the outstanding OP Units into a smaller number of OP Units; or (iii) the
Partnership issues any OP Units in exchange for its outstanding OP Units by way
of a reclassification or recapitalization of its OP Units.  If more than one Adjustment Event occurs, the
adjustment to the LTIP Units under Section 4.6(a) 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 OP Units in a
financing, reorganization, acquisition or other similar business transaction, (y) the
issuance of OP Units pursuant to the Plan, or any other long-term incentive
plan, any employee benefit or compensation plan or distribution reinvestment
plan, or (z) the issuance of any OP Units to STAG REIT in respect of a
capital contribution to the Partnership of proceeds from the sale of securities
by STAG REIT.


 


2

















 


“Affiliate”
means, with respect to any Person, any Person directly or indirectly
controlling, controlled by or under common control with such Person.  For the purposes of this definition, “control”
when used with respect to any Person means the possession, directly or
indirectly, of the power, alone or together, to direct or cause the direction
of the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise, and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.


 


“Agreed
Value” means (i) in the case of any Contributed Property as of the
time of its contribution to the Partnership, the 704(c) Value of such
property, as reduced by any liabilities either assumed by the Partnership upon
such contribution or to which such property is subject when contributed; and (ii) in
the case of any property distributed to a Partner by the Partnership, the
Partnership’s Carrying Value of such property at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of
distribution as determined under Section 752 of the Code and the
Regulations thereunder.


 


“Agreement”
means this Amended and Restated Agreement of Limited Partnership of the Partnership,
as it may be amended, supplemented or restated from time to time.


 


“Assignee”
means a Person to whom all or a portion of a Partnership Interest has been
transferred in a manner permitted under this Agreement, but who has not become
a Substituted Limited Partner, and who has the rights set forth in Section 11.5.


 


“Available
Cash” means, with respect to any period for which such calculation is being
made, all cash revenues and funds received plus any reduction in reserves and
less interest and principal payments on debt, all cash expenditures (including
capital expenditures), investments in any entity and any additions to reserves
and other adjustments, as determined by the General Partner in its sole and
absolute discretion.


 


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


 


“Book-Tax
Disparities” means, with respect to any item of Contributed Property or
Adjusted Property, as of the date of any determination, the difference between
the Carrying Value of such Contributed Property or Adjusted Property and the
adjusted basis thereof for federal income tax purposes as of such date.  A Partner’s share of the Partnership’s
Book-Tax Disparities in all of its Contributed Property and Adjusted Property
will be reflected by the difference between such Partner’s Capital Account
balance as maintained pursuant to Exhibit B and the hypothetical
balance of such Partner’s Capital Account computed as if it had been maintained
strictly in accordance with federal income tax accounting principles.


 


“Business
Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York, New York or Boston, Massachusetts are authorized
or required by law to close.


 


“Capital
Account” means the Capital Account maintained for a Partner pursuant to Exhibit B
hereof.


 


3

















 


“Capital
Account Limitation” has the meaning set forth in Section 8.7(a).


 


“Capital
Contribution” means, with respect to any Partner, any cash, cash
equivalents or the Agreed Value of Contributed Property which such Partner
contributes or is deemed to contribute to the Partnership pursuant to Sections
4.1, 4.2, or 4.3 hereof.


 


“Carrying
Value” means (i) with respect to a Contributed Property or Adjusted
Property, the 704(c) Value of such property, reduced (but not below zero)
by all Depreciation with respect to such property charged to the Partners’
Capital Accounts following the contribution of or adjustment with respect to
such property; and (ii) with respect to any other Partnership property,
the adjusted basis of such property for federal income tax purposes, all as of
the time of determination.  The Carrying
Value of any property shall be adjusted from time to time in accordance with Exhibit B
hereof, and to reflect changes, additions or other adjustments to the Carrying
Value for dispositions and acquisitions of Partnership properties, as deemed
appropriate by the General Partner.


 


“Cash
Amount” means an amount of cash per OP Unit equal to the Value on the
Valuation Date of the REIT Shares Amount.


 


“Certificate”
means the Certificate of Limited Partnership of the Partnership as filed in the
office of the Delaware Secretary of State on December 21, 2009, as amended
and/or restated from time to time in accordance with the terms hereof and the
Act.


 


“Charter”
means the charter of STAG REIT filed with the State Department of Assessments
and Taxation of the State of Maryland on December 16, 2009, as amended
and/or restated from time to time.


 


“Closing
Date” means the date of consummation of the first sale of REIT Shares
pursuant to the Initial Public Offering.


 


“Code”
means the Internal Revenue Code of 1986, as amended and in effect from time to
time or any successor statute thereto, as interpreted by the applicable
regulations thereunder.  Any reference
herein to a specific section or sections of the Code shall be deemed to include
a reference to any corresponding provision of future law.


 


“Common
Units” means the OP Units other than any series of units of limited
partnership interest issued in the future and designated as preferred or
otherwise different from the common units, including, but not limited to, with
respect to the payment of distributions, including distributions upon
liquidation.


 


“Compensation
Committee” means the Compensation Committee of the Board of Directors.


 


“Consent”
means the consent to, approval of, or vote in favor of a proposed action by a
Partner given in accordance with Section 14.2 hereof.


 


“Constituent
Person” has the meaning set forth in Section 8.7(g).


 


4














 


“Constructively
Own” means ownership under the constructive ownership rules described
in Exhibit E.


 


“Contribution
Agreement” and “Contribution Agreements” each has the meaning set
forth in the recitals hereto.


 


“Contributed
Property” means each property or other asset, in such form as may be
permitted by the Act (but excluding cash), contributed or deemed contributed to
the Partnership.  Once the Carrying Value
of a Contributed Property is adjusted pursuant to Exhibit B hereof,
such property shall no longer constitute a Contributed Property for purposes of
Exhibit B hereof, but shall be deemed an Adjusted Property for such
purposes.


 


“Conversion
Date” has the meaning set forth in Section 8.7(b).


 


“Conversion
Factor” means 1.0, subject to adjustment as follows: (i) in case STAG
REIT shall (A) make a distribution on the outstanding REIT Shares in REIT
Shares and the Partnership does not make a corresponding distribution with
respect to all OP Units, (B) subdivide or reclassify the outstanding REIT
Shares into a greater number of REIT Shares, or (C) combine or reclassify
the outstanding REIT Shares into a smaller number of REIT Shares, the
Conversion Factor in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
distribution or subject to such subdivision, combination or reclassification
shall be proportionately adjusted so that a holder of OP Units shall be
entitled to receive, upon exchange thereof, the number of REIT Shares which the
holder would have owned at the opening of business on the day following the
date fixed for such determination had such OP Units been exchanged immediately
prior to such determination; (ii) in case the Partnership shall subdivide
or reclassify the outstanding OP Units into a greater number of OP Units, the
Conversion Factor in effect at the opening of business on the day following the
date fixed for the determination of OP Unit holders subject to such subdivision
or reclassification shall be proportionately adjusted so that a holder of OP
Units shall be entitled to receive, upon exchange thereof, the number of REIT
Shares which the holder would have owned at the opening of business on the day
following the date fixed for such determination had such OP Units been
exchanged immediately prior to such determination; (iii) in case the
General Partner or STAG REIT distributes any rights, options or warrants to all
holders of REIT Shares to subscribe for or to purchase or to otherwise acquire
REIT Shares, or other securities or rights convertible into, exchangeable for
or exercisable for REIT Shares, at a price per share less than the Value of a
REIT Share on the record date for such distribution (each a “Distributed
Right”), then, as of the distribution date of such Distributed Rights or,
if later, the time such Distributed Rights become exercisable, the Conversion
Factor shall be adjusted by multiplying the Conversion Factor previously in
effect by a fraction (a) the numerator of which shall be the number of
REIT Shares issued and outstanding on the record date (or, if later, the date
such Distributed Rights become exercisable) plus the maximum number of REIT
Shares purchasable under such Distributed Rights and (b) the denominator
of which shall be the sum of (x) number of REIT Shares issued and
outstanding on the record date (or, if later, the date such Distributed Rights
become exercisable) plus (y) a fraction (1) the numerator of which is
the maximum number of REIT Shares purchasable under such Distributed Rights
times the minimum purchase price per REIT Share under such Distributed Rights
and (2) the denominator of which is the Value of a REIT Share as of the
record date (or, if later, the date such Distributed Rights become
exercisable); 


 


5

















 


provided, however,
that, if any such Distributed Rights expire or become no longer exercisable,
then the Conversion Factor shall be adjusted, effective retroactive to the date
of distribution of the Distributed Rights, to reflect a reduced maximum number
of REIT Shares or any change in the minimum purchase price for the purposes of
the above fraction; and (iv) in case STAG REIT shall, by distribution or
otherwise, distribute to all holders of its REIT Shares, (A) capital shares
of any class other than its REIT Shares, (B) evidence of its indebtedness
or (C) assets (excluding any rights or warrants referred to in clause (iii) above,
any cash distribution lawfully paid under the laws of the state of organization
of STAG REIT, and any distribution referred to in clause (i) above) and
shall not cause a corresponding distribution to be made to all holders of OP
Units, the Conversion Factor shall be adjusted so that the same shall equal the
ratio determined by multiplying the Conversion Factor in effect immediately
prior to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which the
numerator shall be the Daily Market Price per REIT Share on the date fixed for
such determination, and of which the denominator shall be such Daily Market
Price per REIT Share less the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
resolution certified by the Secretary of STAG REIT and delivered to the holders
of the OP Units) of the portion of the capital shares or evidences of
indebtedness or assets so distributed applicable to one REIT Share, such
adjustment to become effective immediately prior to the opening of business on
the day following the date fixed for the determination of stockholders entitled
to receive such distribution.


 


“Conversion
Notice” has the meaning set forth in Section 8.7(b).


 


“Conversion
Right” has the meaning set forth in Section 8.7(a).


 


“Covered
Person” has the meaning set forth in Section 7.8(a).


 


“Daily
Market Price” means, with respect to a Trading Day, the last sale price for
REIT Shares, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices for REIT Shares, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
such REIT Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported on the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which such REIT Shares are listed or admitted to trading or, if
such REIT Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price, or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter market, as
reported by the principal automated quotation system that may then be in use
or, if such REIT Shares are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in such REIT Shares selected by the Board of Directors or, in
the event that no trading price is available for such REIT Shares, the fair
market value of the REIT Shares, as determined in good faith by the Board of
Directors.


 


“Debt”
means, as to any Person, as of any date of determination; (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all amounts owed by such Person to
banks or other Persons in respect of reimbursement obligations under letters of
credit, surety bonds and other similar instruments guaranteeing 


 


6

















 


payment
or other performance of obligations by such Person; (iii) all indebtedness
for borrowed money or for the deferred purchase price of property or services
secured by any lien on any property owned by such Person, to the extent
attributable to such Person’s interest in such property, even though such
Person has not assumed or become liable for the payment thereof; and (iv) obligations
of such Person incurred in connection with entering into a lease which, in
accordance with GAAP, should be capitalized.


 


“Depreciation”
means, for each taxable year or other period, an amount equal to the federal
income tax depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that
if the Carrying Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period, “Depreciation”
shall be an amount which bears the same ratio to the beginning Carrying Value
of such asset as the federal income tax depreciation, amortization, or other
cost recovery deduction for such year or other period bears to the beginning
adjusted tax basis of such asset; provided, however, that if the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year or other period is zero, Depreciation shall be determined with
reference to the beginning Carrying Value of such asset using any reasonable
method selected by the General Partner.


 


“Distributed
Right” shall have the meaning set forth in subsection (iii) of the
definition of “Conversion Factor.”


 


“Distribution
Payment Date” means the dates upon which the General Partner makes distributions
in accordance with Section 5.1 of this Agreement.


 


“Economic
Capital Account Balances” has the meaning set forth in Section 6.1(c).


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended and in
effect from time to time, as interpreted by the applicable regulations
thereunder.  Any reference herein to a
specific section or Title of ERISA shall be deemed to include a reference to
any corresponding provision of future law.


 


“Event
of Bankruptcy” has the meaning set forth in Section 13.1(g).


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and any
successor statute thereto, and the rules and regulations of the Securities
and Exchange Commission promulgated thereunder.


 


“final
adjustment” has the meaning set forth in Section 10.3(b)(ii).


 


“flow
through entity” has the meaning set forth in Section 3.3(c)(iii).


 


“Forced
Conversion” has the meaning set forth in Section 8.7(c).


 


“Forced
Conversion Notice” has the meaning set forth in Section 8.7(d).


 


“Fund
II” has the meaning set forth in the recitals hereto.


 


7

















 


“Funding
Debt” means any Debt incurred by or on behalf of the General Partner or
STAG REIT for the purpose of providing funds to the Partnership.


 


“GAAP”
means U.S. generally accepted accounting principles.


 


“General
Partner” means STAG Industrial GP, LLC, a Delaware limited liability
company, or any Person who becomes an additional or a successor general partner
of the Partnership.  STAG Industrial, GP,
LLC is wholly-owned by the STAG REIT, and is an entity that is disregarded as
separate from its sole owner for federal income tax purposes under Treas. Reg. Section 301.7701-3.


 


“General
Partner Interest” means a Partnership Interest held by the General Partner,
in its capacity as general partner of the Partnership.  A General Partner Interest may be (but is not
required to be) expressed as a number of OP Units.


 


“Incapacity”
or “Incapacitated” means, (i) as to any individual Partner, death,
total physical disability or entry by a court of competent jurisdiction
adjudicating him incompetent to manage his Person or his estate; (ii) as
to any corporation which is a Partner, the filing of a certificate of
dissolution, or its equivalent, for the corporation or the revocation of its
charter; (iii) as to any partnership or limited liability company which is
a Partner, the dissolution and commencement of winding up of the partnership or
limited liability company; (iv) as to any estate which is a Partner, the
distribution by the fiduciary of the estate’s entire interest in the
Partnership; (v) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee); or (vi) as
to any Partner, the bankruptcy of such Partner. For purposes of this
definition, bankruptcy of a Partner shall be deemed to have occurred when
(a) the Partner commences a voluntary proceeding seeking liquidation,
reorganization or other relief under any bankruptcy, insolvency or other
similar law now or hereafter in effect; (b) the Partner is adjudged as
bankrupt or insolvent, or a final and non-appealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner; (c) the Partner executes and delivers a
general assignment for the benefit of the Partner’s creditors; (d) the
Partner files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against the Partner in any proceeding
of the nature described in clause (b) above; (e) the Partner seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator for the Partner or for all or any substantial part of the Partner’s
properties; (f) any proceeding seeking liquidation, reorganization or
other relief of or against such Partner under any bankruptcy, insolvency or
other similar law now or hereafter in effect has not been dismissed within one
hundred twenty (120) days after the commencement thereof; (g) the appointment
without the Partner’s consent or acquiescence of a trustee, receiver or
liquidator has not been vacated or stayed within ninety (90) days of such
appointment; or (h) an appointment referred to in clause (g) which
has been stayed is not vacated within ninety (90) days after the expiration of
any such stay.


 


“Indemnitee”
means (i) any Person made, or threatened to be made, a party to a
proceeding by reason of (a) his or its status as the General Partner, or
as a trustee, director, officer, stockholder, partner, member, employee,
representative or agent of STAG REIT or the General Partner or any of their
Subsidiaries or as an officer, employee, representative or agent of the
Partnership or (b) his or its liabilities, pursuant to a loan guarantee or
otherwise, for any 


 


8

















 


indebtedness
of the Partnership or any Subsidiary of the Partnership (including, without
limitation, any indebtedness which the Partnership or any Subsidiary of the
Partnership has assumed or taken assets subject to); and (ii) such other
Persons (including Affiliates or employees of STAG 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.


 


“Initial
Partners” has the meaning set forth in the recitals hereto.


 


“Initial
Public Offering” means the initial public offering of REIT Shares under the
Securities Act pursuant to that certain underwriting agreement, dated
[            
    , 2010] among STAG REIT, the Partnership and the
underwriters named therein.


 


“Initial
REIT Capitalization” means the issuance of one thousand (1,000) REIT Shares
by STAG REIT for cash on December 16, 2009, constituting the initial
capitalization of STAG REIT.


 


“IRS”
means the Internal Revenue Service, which administers the internal revenue laws
of the United States.


 


“Limited
Partner” means any Person named as a limited partner of the Partnership in Exhibit A
attached hereto, as such Exhibit may be amended from time to time, or any
Substituted Limited Partner or Additional Limited Partner, in such Person’s
capacity as a limited partner of the Partnership.  For purposes of this Agreement and the Act,
the Limited Partners shall constitute a single class or group of limited
partners.  The initial Limited Partners
are Fund III and STAG REIT.


 


“Limited
Partner Interest” means a Partnership Interest of a Limited Partner in the
Partnership representing a fractional part of the Partnership Interests of all
Partners and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled, as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of this
Agreement.  A Limited Partner Interest
may be (but is not required to be) expressed as a number of OP Units.


 


“Liquidating
Event” has the meaning set forth in Section 13.1.


 


“Liquidator”
has the meaning set forth in Section 13.2.


 


“LTIP
Unit” means an OP Unit which is designated as an “LTIP Unit,” which
represents a profits interest in future appreciation and certain distributions
of Available Cash, and which has the rights, preferences and other privileges
designated in Section 4.6 hereof and elsewhere in this Agreement
and in the Plan in respect of LTIP Unitholders. 
The allocation of LTIP Units among the Partners shall be set forth on Exhibit A,
as may be amended from time to time by the General Partner.


 


“LTIP
Unit Agreement” means each or any, as the context implies, LTIP unit
agreement entered into by an LTIP Unitholder and the Partnership upon
acceptance of an award of LTIP 


 


9

















 


Units
under the Plan (as such agreement may be amended, modified or supplemented from
time to time).


 


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


 


“Management
Company” means STAG Industrial Management, LLC, a Delaware limited
liability company and a wholly owned Subsidiary of the Partnership, and any
successor thereto, provided that such successor continues to manage or
advise the General Partner.


 


“Net
Income” means, for any taxable period, the excess, if any, of the
Partnership’s items of income and gain for such taxable period over the
Partnership’s items of loss and deduction for such taxable period.  The items included in the calculation of Net
Income shall be determined in accordance with federal income tax accounting
principles, subject to the specific adjustments provided for in Section l(b) of
Exhibit B.


 


“Net
Loss” means, for any taxable period, the excess, if any, of the Partnership’s
items of loss and deduction for such taxable period over the Partnership’s
items of income and gain for such taxable period.  The items included in the calculation of Net
Loss shall be determined in accordance with federal income tax accounting
principles, subject to the specific adjustments provided for in Section l(b) of
Exhibit B.


 


“New
Securities” has the meaning set forth in Section 4.2(b) hereof.


 


“Nonrecourse
Deductions” has the meaning set forth in Regulations Section 1.704-2(b)(l),
and the amount of Nonrecourse Deductions for a Partnership taxable year shall
be determined in accordance with the rules of Regulations Section 1.704-2(c).


 


“Nonrecourse
Liability” has the meaning set forth in Regulations Section 1.752-l(a)(2).


 


“Notice
of Redemption” means the Notice of Redemption substantially in the form of Exhibit D
to this Agreement.


 


“OP
Unit” means a fractional, undivided share of the Partnership Interests of
all Partners issued pursuant to Sections 4.1, 4.2 and 4.3.  The number of OP Units outstanding and the
Percentage Interest in the Partnership represented by such OP Units are set
forth in Exhibit A attached hereto, as such Exhibit may be
amended from time to time.  The ownership
of OP Units shall be evidenced by such form of certificate for units as the
General Partner adopts from time to time unless the General Partner determines
that the OP Units shall be uncertificated securities.


 


“OP
Unit Economic Balance” has the meaning set forth in Section 6.1(c).


 


“Original
Agreement” has the meaning set forth in the recitals hereto.


 


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


 


“Partner
Minimum Gain” means an amount, with respect to each Partner Nonrecourse
Debt, equal to the Partnership Minimum Gain that would result if such Partner
Nonrecourse Debt 


 


10

















 


were
treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).


 


“Partner
Nonrecourse Debt” has the meaning set forth in Regulations Section 1.704-2(b)(4).


 


“Partner
Nonrecourse Deductions” has the meaning set forth in Regulations Section 1.704-2(i)(2),
and the amount of Partner Nonrecourse Deductions with respect to a Partner
Nonrecourse Debt for a Partnership taxable year shall be determined in
accordance with the rules of Regulations Section 1.704-2(i)(2).


 


“Partnership”
means STAG Industrial Operating Partnership, L.P., a limited partnership
heretofore formed and continued under the Act and pursuant to this Agreement,
and any successor thereto.


 


“Partnership
Interest” means an ownership interest in the Partnership held by either a
Limited Partner or the General Partner and includes any and all benefits to
which the holder of such a Partnership Interest may be entitled as provided in
this Agreement, together with all obligations of such Person to comply with the
terms and provisions of this Agreement. 
There may be one or more classes or series of Partnership
Interests.  A Partnership Interest may be
(but is not required to be) expressed as a number of OP Units.


 


“Partnership
Minimum Gain” has the meaning set forth in Regulations Section 1.704-2(b)(2),
and the amount of Partnership Minimum Gain, as well as any net increase or
decrease in a Partnership Minimum Gain, for a Partnership taxable year shall be
determined in accordance with the rules of Regulations Section 1.704-2(d).


 


“Partnership
Record Date” means the record date established by the General Partner for
the distribution of Available Cash pursuant to Section 5.1 hereof,
which record date shall be the same as the record date established by STAG REIT
for a distribution to its stockholders of some or all of its portion of such
distribution.


 


“Partnership
Year” means the fiscal year of the Partnership, which shall be the calendar
year.


 


“Percentage
Interest” means, as to a Partner, its interest in the Partnership as
determined by dividing the OP Units owned by such Partner by the total number
of OP Units then outstanding and as specified in Exhibit A attached
hereto, as such Exhibit may be amended from time to time.


 


“Person”
means an individual or a real estate investment trust, corporation, partnership,
limited liability company, trust, unincorporated organization, association or
other entity.


 


“Plan”
means the STAG Industrial, Inc. 2010 Equity Incentive Plan, as such plan
may be amended from time to time.


 


“Plan
Asset Regulation” has the meaning set forth in Section 7.9(e) hereof.


 


11

















 


“Recapture
Income” means any gain recognized by the Partnership upon the disposition
of any property or asset of the Partnership, which gain is characterized as ordinary
income because it represents the recapture of deductions previously taken with
respect to such property or asset.


 


“Redeeming
Partner” has the meaning set forth in Section 8.6(a) hereof.


 


“Redemption
Right” has the meaning set forth in Section 8.6(a) hereof.


 


“Regulations”
means the Income Tax Regulations promulgated under the Code, as such
regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).


 


“REIT”
means a real estate investment trust under Section 856 of the Code.


 


“REIT
Share” means a share of common stock, par value $0.01 per share, of STAG
REIT.


 


“REIT
Share Offering” means a primary offering by STAG REIT of its REIT Shares,
including, without limitation, the Initial Public Offering and any other
offerings.


 


“REIT
Shares Amount” means a number of REIT Shares equal to the product of the
number of OP Units offered for redemption by a Redeeming Partner, multiplied by
the Conversion Factor in effect as of the specified redemption date; provided,
that, in the event that STAG REIT or the General Partner issues to all holders
of REIT Shares and not to holders of OP Units as of a certain record date
Distributed Rights, with the record date for such Distributed Rights issuance
falling within the period starting on the date of the Notice of Redemption and
ending on the day immediately preceding the Specified Redemption Date, which
Distributed Rights have not expired or are still exercisable as of the relevant
Specified Redemption Date, then the REIT Shares Amount shall also include such
Distributed Rights that a holder of that number of REIT Shares would be
entitled to receive, expressed, where relevant hereunder, in a number of REIT
Shares determined by the General Partner.


 


“Residual
Gain” or “Residual Loss” means any item of gain or loss, as the case
may be, of the Partnership recognized for federal income tax purposes resulting
from a sale, exchange or other disposition of Contributed Property or Adjusted
Property, to the extent such item of gain or loss is not allocated pursuant to Section 2(b)(i)(A) or
2(b)(ii)(A) of Exhibit C to eliminate Book-Tax
Disparities.


 


“Roll-Up
Agreement” has the meaning set forth in the recitals hereto.


 


“Securities
Act” means the Securities Act of 1933, as amended, and any successor
statute thereto, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.


 


“Specified
Redemption Date” means the tenth (10th) Business Day after receipt by the
Partnership of a Notice of Redemption; provided, that if STAG REIT
combines its outstanding 


 


12

















 


REIT
Shares, no Specified Redemption Date shall occur after the record date of such
combination of REIT Shares and prior to the effective date of such combination.


 


“STAG
REIT” means STAG Industrial, Inc., a Maryland corporation and the sole
member of the General Partner, and any successor thereto.


 


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


 


“Substituted
Limited Partner” means a Person who is admitted as a Limited Partner to the
Partnership pursuant to Section 11.4.


 


“Tenant”
means any tenant from which STAG REIT derives rent either directly or
indirectly through partnerships or limited liability companies, including
through the General Partner and the Partnership.


 


“Terminating
Capital Transaction” means any sale or other disposition of all or
substantially all of the assets of the Partnership or a related series of
transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.


 


“Trading
Days” means days on which the primary trading market for REIT Shares, if
any, is open for trading.


 


“Transaction”
has the meaning set forth in Section 8.7(g).


 


“Unrealized
Gain” attributable to any item of Partnership property means, as of any
date of determination, the excess, if any, of (i) the fair market value of
such property (as determined under Exhibit B hereof) as of such
date; over (ii) the Carrying Value of such property (prior to any
adjustment to be made pursuant to Exhibit B hereof) as of such
date.


 


“Unrealized
Loss” attributable to any item of Partnership property means, as of any
date of determination, the excess, if any, of (i) the Carrying Value of
such property (prior to any adjustment to be made pursuant to Exhibit B
hereof) as of such date; over (ii) the fair market value of such property
(as determined under Exhibit B hereof) as of such date.


 


“Unvested
LTIP Units” has the meaning set forth in Section 4.6(b)(i).


 


“Valuation
Date” means the date of receipt by the General Partner of a Notice of
Redemption or, if such date is not a Business Day, the first Business Day
thereafter.


 


“Value”
means, on any Valuation Date with respect to a REIT Share, the average of the
Daily Market Price for the ten (10) consecutive Trading Days immediately
preceding the Valuation Date.


 


“Vested
LTIP Units” has the meaning set forth in Section 4.6(b)(i).


 


13

















 


ARTICLE 2


ORGANIZATIONAL MATTERS


 


Section 2.1             Continuation.


 


The
Partners hereby continue the Partnership as a limited partnership under and
pursuant to the Act.  Except as expressly
provided herein to the contrary, the rights and obligations of the Partners and
the administration and termination of the Partnership shall be governed by the
Act.  The Partnership Interest of each
Partner shall be personal property for all purposes.


 


Section 2.2             Name.


 


The
name of the Partnership heretofore formed and continued hereby shall be “STAG Industrial Operating Partnership, L.P.”.  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.,”
“Ltd.” or similar words or letters shall be included in the Partnership’s name
where necessary for the purposes of complying with the laws of any jurisdiction
that so requires.  The General Partner in
its sole and absolute discretion may change the name of the Partnership at any
time and from time to time and shall notify the Limited Partners of such change
in the next regular communication to the Limited Partners.


 


Section 2.3             Registered Office and Agent;
Principal Office.


 


The
address of the registered office of the Partnership in the State of Delaware
and the name and address of the registered agent for service of process on the
Partnership in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.  The principal office of the Partnership shall
be c/o STAG Industrial, Inc., 99 Chauncy Street, 10th Floor, Boston, MA
02111, or such other place as the General Partner may from time to time
designate by notice to the Limited Partners. 
The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.


 


Section 2.4             Power of Attorney.


 


(a)           Each Limited Partner and each Assignee hereby irrevocably
constitutes and appoints the General Partner, any Liquidator, and authorized
officers and attorneys-in-fact of each, and each of those acting singly, in
each case with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and stead
to:


 


(i)            execute, swear to, acknowledge, deliver, file and record
in the appropriate public offices (A) all certificates, documents and
other instruments (including, without limitation, this Agreement and the
Certificate and all amendments, supplements or restatements thereof) that the
General Partner or the Liquidator deems appropriate or necessary to form,
qualify or continue the existence or qualification of the Partnership as a
limited partnership (or a partnership in which the Limited Partners have
limited liability to the extent provided by applicable law) in the State of
Delaware and in all other jurisdictions in which the Partnership may or plans
to conduct business or own property; (B) all instruments that the 


 


14

















 


General Partner deems appropriate or necessary to
reflect any amendment, change, modification or restatement of this Agreement in
accordance with the terms of this Agreement; (C) all conveyances and other
instruments or documents that the General Partner or the Liquidator deems
appropriate or necessary to reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement, including, without
limitation, a certificate of cancellation; (D) all conveyances and other
instruments or documents that the General Partner or the Liquidator deems
appropriate or necessary to reflect the distribution or exchange of assets of
the Partnership pursuant to the terms of this Agreement; (E) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to, or other events described in, Article 11, 12
or 13 hereof or the Capital Contribution of any Partner; and (F) all
certificates, documents and other instruments relating to the determination of
the rights, preferences and privileges of Partnership Interests; and


 


(ii)           execute, swear to, seal, acknowledge and file all ballots,
consents, approvals, waivers, certificates and other instruments appropriate or
necessary, in the sole and absolute discretion of the General Partner or any
Liquidator, to make, evidence, give, confirm or ratify any vote, consent,
approval, agreement or other action which is made or given by the Partners
hereunder or is consistent with the terms of this Agreement or appropriate or
necessary, in the sole discretion of the General Partner or any Liquidator, to
effectuate the terms or intent of this Agreement.


 


Nothing
contained herein shall be construed as authorizing the General Partner or any
Liquidator to amend this Agreement except in accordance with Article 14
hereof or as may be otherwise expressly provided for in this Agreement.


 


(b)           The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, in recognition of the fact
that each of the Partners will be relying upon the power of the General Partner
and any Liquidator to act as contemplated by this Agreement in any filing or
other action by it on behalf of the Partnership, and it shall survive and not
be affected by the subsequent Incapacity of any Limited Partner or Assignee and
the transfer of all or any portion of such Limited Partner’s or Assignee’s OP
Units and shall extend to such Limited Partner’s or Assignee’s heirs,
successors, assigns and personal representatives. Each such Limited Partner or
Assignee hereby agrees to be bound by any representation made by the General
Partner or any Liquidator, acting in good faith pursuant to such power of
attorney, and each such Limited Partner or Assignee hereby waives any and all
defenses which may be available to contest, negate or disaffirm the action of
the General Partner or any Liquidator, taken in good faith under such power of
attorney.  Each Limited Partner or
Assignee shall execute and deliver to the General Partner or the Liquidator,
within fifteen (15) days after receipt of the General Partner’s or Liquidator’s
request therefor, such further designation, powers of attorney and other
instruments as the General Partner or the Liquidator, as the case may be, deems
necessary to effectuate this Agreement and the purposes of the
Partnership.  Notwithstanding anything to
the contrary set forth in this Section 2.4(b), no Limited Partner
shall incur any personal liability for any action of the General Partner or the
Liquidator taken under such power of attorney.


 


15

















 


Section 2.5             Term.


 


The
term of the Partnership commenced on the date that the Certificate was filed
with the Secretary of State of the State of Delaware and shall continue in
perpetuity, unless the Partnership is dissolved sooner pursuant to the
provisions of Article 13 or as otherwise provided by law.


 


Section 2.6             Partnership Interests Are
Securities.


 


All
Partnership Interests shall be securities within the meaning of, and governed
by, (i) Article 8 of the Delaware Uniform Commercial Code and (ii) Article 8
of the Uniform Commercial Code of any other applicable jurisdiction.


 


ARTICLE 3


PURPOSE


 


Section 3.1             Purpose and Business.


 


The
purpose and nature of the business to be conducted by the Partnership is (i) to
conduct any business that may be lawfully conducted by a limited partnership
formed pursuant to the Act; provided, however, that, from and
after the Closing Date, such business shall be limited to and conducted in such
a manner as to permit STAG REIT at all times to qualify as a REIT, unless STAG
REIT ceases to qualify as a REIT for reasons other than the conduct of the
business of the Partnership or voluntarily revokes its election to be a REIT; (ii) to
enter into any partnership, joint venture or other similar arrangement to
engage in any of the foregoing or to own interests in any entity engaged in any
of the foregoing; and (iii) to do anything necessary, convenient or
incidental to the foregoing. In connection with the foregoing, and without
limiting the right of the board of STAG REIT, in its sole discretion, to cause
STAG REIT to cease to qualify as a REIT, the Partners acknowledge that, after
the Closing Date, STAG REIT’s status as a REIT shall inure to the benefit of
all of the Partners and not solely to the General Partner, STAG REIT or their
Affiliates.


 


Section 3.2             Powers.


 


The
Partnership is empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes and business described herein and for the
protection and benefit of the Partnership, and shall have, without limitation,
any and all of the powers that may be exercised on behalf of the Partnership by
the General Partner pursuant to this Agreement; provided, however,
that the Partnership shall not take, or refrain from taking, any action which,
in the judgment of the General Partner, in its sole and absolute discretion; (i) could
adversely affect the ability of STAG REIT to qualify and to continue to qualify
as a REIT; (ii) could subject STAG REIT to any additional taxes under Code
Section 857 or Code Section 4981 or any other related or successor
provision of the Code; or (iii) could violate any law or regulation of any
governmental body or agency having jurisdiction over STAG REIT, its securities,
the General Partner or the Partnership, unless such action (or inaction) under
clause (i), clause (ii) or clause (iii) above shall have been
specifically consented to by the General Partner in writing.


 


16














 


Section 3.3             Representations and Warranties
by the Parties.


 


(a)           Each Partner that is an individual (including, without
limitation, each Additional Limited Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner or a Substituted Limited
Partner) represents and warrants to each other Partner that (i) such
Partner has the legal capacity to enter into this Agreement and perform such
Partner’s obligations hereunder; (ii) the consummation of the transactions
contemplated by this Agreement to be performed by such Partner will not result
in a breach or violation of, or a default under, any agreement by which such
Partner or any of such Partner’s property is or are bound, or any statute,
regulation, order or other law to which such Partner is subject; and (iii) this
Agreement is binding upon, and enforceable against, such Partner in accordance
with its terms, as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
affecting creditors’ rights generally, as from time to time in effect, or the
application of equitable principles.


 


(b)           Each Partner that is not an individual (including, without
limitation, each Additional Limited Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner or a Substituted Limited
Partner) represents and warrants to each other Partner that (i) its
execution and delivery of this Agreement and all transactions contemplated by
this Agreement to be performed by it have been duly authorized by all necessary
action, including without limitation, that of its general partner(s),
committee(s), trustee(s), beneficiaries, director(s), member(s) and/or
stockholder(s), as the case may be, as required; (ii) the consummation of
such transactions shall not result in a breach or violation of, or a default
under, its certificate of limited partnership, partnership agreement, trust
agreement, limited liability company operating agreement, charter or bylaws, as
the case may be, any agreement by which such Partner or any of such Partner’s
properties or any of its partners, beneficiaries, trustees, directors, members
or stockholders, as the case may be, is or are bound, or any statute,
regulation, order or other law to which such Partner or any of its partners,
trustees, beneficiaries, directors, members or stockholders, as the case may
be, is or are subject; and (iii) this Agreement is binding upon, and
enforceable against, such Partner in accordance with its terms, as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws affecting
creditors’ rights generally, as from time to time in effect, or the application
of equitable principles.


 


(c)           Each Partner further represents, warrants, covenants and
agrees as follows:


 


(i)            Except as provided in Exhibit H hereto, at
any time such Partner actually owns or Constructively Owns a 25% or greater
capital interest or profits interest in the Partnership, it does not and will
not, without the prior written consent of the General Partner, actually own or
Constructively Own (A) with respect to any Tenant that is a corporation,
any stock of such Tenant; and (B) with respect to any Tenant that is not a
corporation, any interest in either the assets or net profits of such Tenant.


 


(ii)           Upon request of the General Partner, it will promptly
disclose to the General Partner the amount of REIT Shares or other capital
shares of STAG REIT that it actually owns or Constructively Owns.


 


Each
Partner understands that if, for any reason; (A) the representations,
warranties or agreements set forth above are violated, or (B) the
Partnership’s actual or Constructive 


 


17

















 


Ownership
of REIT Shares or other capital shares of STAG REIT violates the limitations
set forth in the Charter, then (x) some or all of the Redemption Rights of the
Partners may become non-exercisable; and (y) some or all of the REIT
Shares owned by the Partners may be automatically transferred to a trust for
the benefit of a charitable beneficiary, as provided in the Charter.


 


(iii)          Without the consent of the General Partner, which may be
given or withheld in its sole discretion, no Partner shall take any action that
would cause the Partnership at any time to have more than one hundred (100)
partners (including as partners those Persons indirectly owning an interest in
the Partnership through a partnership, limited liability company, S corporation
or grantor trust (such entity, a “flow through entity”), but only if
substantially all of the value of such Person’s interest in the flow through
entity is attributable to the flow through entity’s interest (direct or
indirect) in the Partnership).


 


(d)           The representations and warranties contained in this Section 3.3
shall survive the execution and delivery of this Agreement by each Partner
(and, in the case of an Additional Limited Partner or a Substituted Limited
Partner, the admission of such Additional Limited Partner or Substituted
Limited Partner as a Limited Partner in the Partnership) and the dissolution
and winding up of the Partnership.


 


(e)           Each Partner (including, without limitation, each
Additional Limited Partner or Substituted Limited Partner as a condition to
becoming an Additional Limited Partner or a Substituted Limited Partner) hereby
acknowledges that no representations as to potential profit, cash flows, funds
from operations or yield, if any, in respect of the Partnership, the General
Partner or STAG REIT have been made by any Partner or any employee or
representative or Affiliate of any Partner, and that projections and any other
information, including, without limitation, financial and descriptive
information and documentation, which may have been in any manner submitted to
such Partner shall not constitute any representation or warranty of any kind or
nature, express or implied.


 


Section 3.4             Not Publicly Traded.


 


The
General Partner, on behalf of the Partnership, shall use its best efforts not
to take any action which would result in the Partnership being a publicly
traded partnership within the meaning of either Section 469(k)(2) or
7704(b) of the Code.  Subject to
this Section 3.4, it is expressly acknowledged and agreed by the Partners
that the General Partner may, in its sole and absolute discretion, waive or
otherwise modify the application with respect to any Partner(s) or
Assignee(s) of any provision herein restricting, prohibiting or otherwise
relating to (i) the transfer of a Limited Partner Interest or the OP Units
evidencing the same; (ii) the admission of any Limited Partners; and (iii) the
Redemption Rights of such Partners, and that such waivers or modifications may
be made by the General Partner at any time or from time to time, including,
without limitation, concurrently with the issuance of any OP Units pursuant to
the terms of this Agreement.


 


18

















 


ARTICLE 4

CAPITAL CONTRIBUTIONS


 


Section 4.1             Capital Contributions of the Partners.


 


At
the time of their respective execution of this Agreement, the Partners shall
make or shall have made Capital Contributions as set forth in Exhibit A
to this Agreement.  Following their
respective contributions, the Partners shall own OP Units in the amounts set
forth in Exhibit A and shall have a Percentage Interest in the
Partnership as set forth in Exhibit A, which Percentage Interest
shall be adjusted from time to time by the General Partner to the extent
necessary to reflect accurately exchanges, redemptions, additional Capital
Contributions, the issuance of additional OP Units, or similar events having an
effect on any Partner’s Percentage Interest, as set forth in the records of the
Partnership.  Except as provided in Sections
4.2, 4.3, 4.4 and 10.5, the Partners shall have no
obligation to make any additional Capital Contributions or loans to the
Partnership.


 


Section 4.2             Issuances of Additional
Partnership Interests.


 


(a)           The General Partner is hereby authorized, without the need
for any vote or approval of any Partner or any other Person who may hold OP
Units or Partnership Interests, to cause the Partnership from time to time to
issue to any existing Partner (including the General Partner) or to any other
Person (including Affiliates of the General Partner), and to admit such Person
as a limited partner in the Partnership, OP Units (including, without
limitation, Common Units and preferred OP Units) or other Partnership
Interests, in each case in exchange for the contribution by such Person of
property or other assets, in one or more classes, or one or more series of any
of such classes, or otherwise with such designations, preferences, redemption
and conversion rights and relative, participating, optional or other special
rights, powers and duties, including rights, powers and duties senior to other
classes of Limited Partner Interests, all as shall be determined by the General
Partner in its sole and absolute discretion subject to Delaware law, including,
without limitation, (i) the allocations of items of Partnership income,
gain, loss, deduction and credit to each such class or series of Partnership
Interests; (ii) the right of each such class or series of Partnership
Interests to share in Partnership distributions; and (iii) the rights of
each such class or series of Partnership Interests upon dissolution and
liquidation of the Partnership; provided, that no such additional OP
Units or other Partnership Interests shall be issued to the General Partner or
STAG REIT unless either (A)(1) the additional Partnership Interests are
issued in connection with an issuance of REIT Shares or other securities by
STAG REIT, which securities have designations, preferences and other rights
such that the economic interests attributable to such securities are comparable
to the designations, preferences and other rights, except voting rights, of the
additional Partnership Interests issued to the General Partner or STAG REIT in
accordance with this Section 4.2(a), and (2) the General
Partner or STAG REIT shall make a Capital Contribution to the Partnership in an
amount equal to the proceeds, if any, raised in connection with such issuance;
or (B) the additional Partnership Interests are issued to all Partners
holding Partnership Interests in the same class in proportion to their
respective Percentage Interests in such class. 
In addition, the General Partner or STAG REIT may acquire OP Units from
other Partners pursuant to this Agreement.


 


19

















 


(b)           In accordance with, and subject to the terms of Section 4.3
hereof, STAG REIT shall not issue any REIT Shares (other than REIT Shares
issued pursuant to Section 8.6) or other securities, or rights,
options, warrants or convertible or exchangeable securities containing the
right to subscribe for or purchase REIT Shares or other securities of STAG REIT
(or any Debt issued by STAG REIT that provides any of the foregoing rights)
(collectively, “New Securities”) other than to all holders of REIT
Shares unless (i) the General Partner shall cause the Partnership to issue
to STAG REIT Partnership Interests or rights, options, warrants or convertible
or exchangeable securities of the Partnership having designations, preferences
and other rights, all such that the economic interests are comparable to those
of the REIT Shares or other securities or New Securities; and (ii) STAG
REIT contributes to the Partnership the proceeds, if any, from the issuance of
such REIT Shares, other securities or New Securities and, if applicable, from
the exercise of rights contained in such New Securities. Without limiting the
foregoing, STAG REIT is expressly authorized to issue REIT Shares, other
securities or New Securities for less than fair market value, and the General
Partner is expressly authorized to cause the Partnership to issue to STAG REIT
corresponding Partnership Interests, so long as (x) the General Partner
concludes in good faith that such issuance is in the interests of STAG REIT and
the Partnership (for example, and not by way of limitation, the issuance of
REIT Shares and corresponding OP Units in connection with an issuance of REIT
Shares under the Plan or another long-term incentive plan of STAG REIT or
pursuant to an employee share purchase plan providing for employee purchases of
REIT Shares at a discount from fair market value or employee share 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, or in order
to comply with the REIT share ownership requirements set forth in Section 856(a)(5) of
the Code); and (y) the General Partner contributes all proceeds from such
issuance and exercise to the Partnership.


 


Section 4.3             Contribution of Proceeds of
Issuance of Securities by STAG REIT.


 


On
the Closing Date, STAG REIT shall contribute to the Partnership the proceeds of
the Initial Public Offering and the Initial REIT Capitalization received from
STAG REIT in exchange for OP Units; and, in connection with any subsequent
closings of the Initial Public Offering, any other REIT Share Offering and any
other issuance of REIT Shares, other securities or New Securities pursuant to Section 4.2,
STAG REIT shall contribute to the Partnership any proceeds (or a portion
thereof) raised in connection with such issuance and received by STAG REIT in
exchange for Partnership Interests or rights, options, warrants or convertible
or exchangeable securities of the Partnership having designations, preferences
and other rights, all such that the economic interests are comparable to those
of the REIT Shares or other securities or New Securities contributed to the
Partnership; provided, that, in each case, if the proceeds actually
received by STAG REIT are less than the gross proceeds of such issuance as a
result of any underwriter’s discount or other expenses paid or incurred in
connection with such issuance, then STAG 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
and other expenses paid by STAG REIT and/or the General Partner (which discount
and expense shall be treated as an expense for the benefit of the Partnership
in accordance with Section 7.4). In the case of employee purchases
of New Securities at a discount from fair market value, the amount of such
discount representing compensation to the employee, as determined by the
General Partner, shall be treated as an expense of the issuance of such New
Securities.


 


20

















 


Section 4.4             Additional Funds.


 


(a)           The General Partner may, at any time and from time to
time, determine that the Partnership requires additional funds (“Additional
Funds”) for the acquisition of additional assets, for the redemption of OP
Units or for such other purposes as the General Partner may determine in its
sole and absolute discretion.  Additional
Funds may be obtained by the Partnership, at the election of the General
Partner, in any manner provided in, and in accordance with, the terms of this Section 4.4
without the approval of any Limited Partners.


 


(b)           The General Partner, on behalf of the Partnership, may
obtain any Additional Funds by accepting Capital Contributions from any
Partners or other Persons.  In connection
with any such Capital Contribution, the General Partner is hereby authorized to
cause the Partnership from time to time to issue additional OP Units (as set
forth in Section 4.2 above) in consideration therefor, and the
Percentage Interests of the Partners shall be adjusted to reflect the issuance
of such additional OP Units.


 


(c)           The General Partner, on behalf of the Partnership, may
obtain any Additional Funds by causing the Partnership to incur Debt to any
Person (other than the General Partner (but, for this purpose, disregarding any
Debt that may be deemed incurred to the General Partner by virtue of clause (iii) of
the definition of Debt)) upon such terms as the General Partner determines
appropriate, including making such Debt convertible, redeemable or exchangeable
for OP Units; provided, however, that the Partnership shall not
incur any such Debt if (i) a breach, violation or default of such
indebtedness would be deemed to occur by virtue of the transfer of any
Partnership Interest; or (ii) such Debt is recourse to any Partner (unless
the Partner otherwise agrees).


 


(d)           The General Partner, on behalf of the Partnership, may
obtain any Additional Funds by causing the Partnership to incur Debt to STAG
REIT if (i) such Debt is, to the extent permitted by law, on substantially
the same terms and conditions (including interest rate, repayment schedule, and
conversion, redemption, repurchase and exchange rights) as Funding Debt
incurred by STAG REIT, the net proceeds of which are loaned to the Partnership
to provide such Additional Funds; or (ii) such Debt is on terms and
conditions no less favorable to the Partnership than would be available to the
Partnership from any third party; provided, however, that the
Partnership shall not incur any such Debt if (A) a breach, violation or
default of such Debt would be deemed to occur by virtue of the transfer of any
Partnership Interest; or (B) such Debt is recourse to any Partner (unless
the Partner otherwise agrees).


 


Section 4.5             Preemptive Rights.


 


No
Person shall have any preemptive, preferential or other similar right with
respect to (i) additional Capital Contributions or loans to the
Partnership; or (ii) the issuance or sale of any OP Units or other
Partnership Interests.


 


Section 4.6             LTIP Units.


 


(a)           The General Partner, on behalf of the Partnership, may
from time to time issue LTIP Units to Persons who provide services to the
Partnership, the General Partner or STAG REIT, including any Person who
performs services as an employee of the Management 


 


21

















 


Company, or any Affiliate of either of them, for
such consideration as the General Partner may determine to be appropriate for
services rendered by such Persons to the Partnership, the General Partner or
STAG REIT in its capacity as a Partner or in anticipation of becoming a
Partner, and admit such Persons as Limited Partners.  Subject to the following provisions of this Section 4.6
and the special provisions of Sections 6.1(c), 8.7 and 8.8,
LTIP Units shall be treated as OP 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 Limited Partners and LTIP Units shall be treated as OP
Units.  The General Partner may, on
behalf of the Partnership, grant LTIP Units to any Person at any time, in its
sole and absolute discretion.  In
particular, except as otherwise specifically provided in this Agreement, the
Partnership shall maintain at all times a one-to-one correspondence between
LTIP Units and OP Units for conversion, distribution and other purposes,
including without limitation complying with the following procedures:


 


(i)            If an Adjustment Event occurs, the General Partner shall
make a corresponding adjustment to the LTIP Units to maintain a one-for-one
conversion and economic equivalence ratio between OP Units and LTIP Units.  If the Partnership takes an action affecting
the OP Units other than actions specifically defined herein 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 the Plan,
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 the filing of such certificate, the Partnership shall
mail a notice to each LTIP Unitholder setting forth the adjustment to his or
her LTIP Units and the effective date of such adjustment; and


 


(ii)           The LTIP Unitholders shall, in respect of each
Distribution Payment Date, 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 OP Unit paid to holders of record on the same record date established by
the General Partner with respect to such Distribution Payment Date; provided,
however, that no distributions shall be made in respect of any LTIP Unit
that would cause the Economic Capital Account Balance of the holder of such
LTIP Unit to have a negative balance that is greater than the negative balance
of the Economic Capital Account Balance of each OP Unit generally. During any
distribution period, so long as any LTIP Units are outstanding, no
distributions (whether in cash or in kind) shall be authorized, declared or
paid on OP Units, unless equal distributions have been or contemporaneously are
authorized, declared and paid on the LTIP Units for such distribution period,
except in the circumstances described in the proviso to the preceding
sentence.  Except to the extent required
by the aforementioned proviso, the LTIP Units shall rank pari passu with
the OP Units as to the payment of regular and special periodic or other
distributions and distribution of assets upon liquidation, dissolution or
winding up.  As to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or
winding up, any class or series of OP Units or Partnership Interests which by
its 


 


22

















 


terms specifies that it shall rank junior to, on a
parity with, or senior to the OP Units shall also rank junior to, or pari passu with, or senior to, as
the case may be, the entitlement of the LTIP Units to such distribution.  Subject to the terms of any LTIP Unit
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 OP
Units are entitled to transfer their OP Units pursuant to Article 11.


 


(b)           LTIP Units shall be subject to the following special
provisions:


 


(i)            LTIP Unit Agreements.  LTIP Units may, in the sole discretion of the
Compensation Committee, be issued subject to vesting, forfeiture and additional
restrictions on transfer pursuant to the terms of an LTIP Unit Agreement.  The terms of any LTIP Unit Agreement may be
modified by the Compensation Committee from time to time in its sole
discretion, subject to any restrictions on amendment imposed by the relevant
LTIP Unit Agreement or by the Plan, if applicable.  LTIP Units that are no longer subject to
forfeiture under the terms of the LTIP Unit Agreement are referred to herein as
“Vested LTIP Units;” all other LTIP Units shall be treated as “Unvested
LTIP Units.”


 


(ii)           Forfeiture. 
Unless otherwise specified in the applicable LTIP Unit Agreement, upon
the occurrence of any event specified in an LTIP Unit 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,
if the Partnership or the General Partner exercises such right to repurchase or
some other forfeiture occurs in accordance with the applicable LTIP Unit
Agreement, then 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 applicable LTIP Unit 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 target balance
contemplated by Section 6.1(c), calculated with respect to the LTIP
Unitholder’s remaining LTIP Units, if any.


 


(iii)          Allocations. 
LTIP Units shall generally be treated as OP Units for purposes of Article 6,
but shall receive certain special allocations of gain under Section 6.1(c).


 


(iv)          Redemption. 
The Redemption Right provided to Limited Partners under Section 8.6
shall not apply with respect to LTIP Units unless and until they are converted
to OP Units as provided in clause (vi) below and Section 8.7.


 


(v)           Legend.  Any certificate
evidencing an LTIP Unit shall bear an appropriate legend indicating that
additional terms, conditions and restrictions on transfer, including without
limitation any LTIP Unit Agreement, apply to the LTIP Unit.


 


(vi)          Conversion to OP Units.  Vested LTIP Units are eligible to be
converted into OP Units under Section 8.7.


 


23

















 


(vii)         Voting.  LTIP
Units shall have the voting rights provided in Section 8.8.


 


(viii)        Tax Classification.  The Partners intend that the LTIP Units shall
be classified as “profits interests” within the meaning of IRS Revenue
Procedure 93-27, 1993-2 C.B. 343, as clarified by IRS Revenue Procedure
2001-43, 2001-2 C.B. 191, and the provisions of this Agreement shall be
interpreted in a manner consistent with this intent.


 


(c)           Code Section 83 Safe Harbor Election.


 


(i)            By executing this Agreement, each Partner authorizes and
directs the Partnership to elect to have the “Safe Harbor” described in the
proposed Revenue Procedure set forth in IRS Notice 2005-43 (the “Notice”)
apply to the LTIP Units and any other interest in the Partnership transferred
to a service provider by the Partnership on or after the effective date of such
Revenue Procedure in connection with services provided to the Partnership.  For purposes of making such Safe Harbor
election, the General Partner is hereby designated as the “partner who has
responsibility for federal income tax reporting” by the Partnership and,
accordingly, execution of such Safe Harbor election by the General Partner
constitutes execution of a “Safe Harbor Election” in accordance with
Section 3.03(1) of the Notice. 
The Partnership and each Partner hereby agree to comply with all
requirements of the Safe Harbor described in the Notice, including, without
limitation, the requirement that each Partner shall prepare and file all
federal income tax returns reporting the income tax effects of each interest in
the Partnership issued by the Partnership covered by the Safe Harbor in a
manner consistent with the requirements of the Notice.


 


(ii)           Each Partner authorizes the General Partner to amend
Section 4.6(c) to the extent necessary to achieve substantially the
same tax treatment with respect to LTIP Units and any other interest in the
Partnership transferred to a service provider by the Company in connection with
services provided to the Partnership as set forth in Section 4 of the
Notice (e.g., to reflect changes from the rules set
forth in the Notice in subsequent IRS guidance), provided that such amendment
is not adverse to such Partner (as compared with the after-tax consequences
that would result to such Partner if the provisions of the Notice applied to
all interests in the Partnership transferred to a service provider by the
Partnership in connection with services provided to the Partnership).


 


ARTICLE 5

DISTRIBUTIONS


 


Section 5.1             Requirement and Characterization
of Distributions.


 


The
General Partner shall distribute at least quarterly all or such portion as the
General Partner may in its sole discretion determine of Available Cash
generated by the Partnership during such quarter or shorter period to the
Partners that are Partners on the Partnership Record Date with respect to such
quarter or shorter period in the following priority:


 


(a)           First, to the Partners in accordance with their Percentage
Interests in arrears with respect to the immediately preceding calendar quarter
in an amount equal to (i) the sum of (A) the General Partner’s
reasonable estimate of the Net Income allocable to the Partners 


 


24

















 


in accordance with their Percentage Interests under Section 6.l(a) with
respect to such immediately preceding calendar quarter and (B) the General
Partner’s determination of the Net Income so allocated in prior calendar
quarters in the same calendar year, reduced by (ii) the sum of (A) all
distributions previously made under this subsection or under subsection (b) with
respect to all calendar quarters during the same calendar year and (B) any
Net Loss allocable to the Partners in accordance with their Percentage
Interests in such calendar quarter or any preceding calendar quarter of the
same calendar year under Section 6.1(b).


 


(b)           Second, to the Partners in accordance with their
Percentage Interests; provided, that in no event may a Partner receive a
distribution of Available Cash with respect to an OP Unit if such Partner is
entitled to receive a distribution out of such Available Cash with respect to a
REIT Share for which such OP Unit has been exchanged, and any such distribution
shall be made to the General Partner; and provided, further, that
no LTIP Unitholder shall receive any distribution of Available Cash if and to
the extent the balance of such LTIP Unitholder’s Adjusted Capital Account would
be equal to or less than zero after such distribution is made unless the
balances of the Adjusted Capital Accounts of all Partners in the Partnership
would also be equal to or less than zero after such distribution is made.


 


The
General Partner shall take such reasonable efforts, as determined by it in its
sole and absolute discretion and consistent with Section 3.5 and STAG REIT’s
qualification as a REIT, to distribute Available Cash to the Limited Partners
so as to preclude any such distribution or portion thereof from being treated
as part of a sale of property to the Partnership by a Limited Partner under Section 707
of the Code or the Regulations thereunder; provided, that the General
Partner and the Partnership shall not have liability to a Limited Partner under
any circumstances as a result of any distribution to a Limited Partner being so
treated.


 


Section 5.2             Amounts Withheld.


 


To
the extent provided in Section 10.5, all amounts withheld pursuant to the
Code or any provisions of any state or local tax law and Section 10.5
hereof with respect to any allocation, payment or distribution to the Partners
or Assignees shall be treated as amounts distributed to the Partners or
Assignees pursuant to Section 5.1 for all purposes under this
Agreement.


 


Section 5.3             Distributions upon Liquidation.


 


Notwithstanding
the other provisions of this Article 5, net proceeds from a
Terminating Capital Transaction and any other cash received or reductions in
reserves made after commencement of the liquidation of the Partnership shall be
distributed to the Partners in accordance with Section 13.2.


 


Section 5.4             Restricted Distributions.


 


Notwithstanding
any provision to the contrary contained in this Agreement, the Partnership, and
the General Partner on behalf of the Partnership, shall not make a distribution
to any Partner on account of its interest in the Partnership if such
distribution would violate Section 17-607 of the Act or other applicable
law.


 


25

















 


ARTICLE 6

ALLOCATIONS


 


Section 6.1             Allocations for Capital Account
Purposes.


 


For
purposes of maintaining the Capital Accounts and in determining the rights of
the Partners among themselves, the Partnership’s items of income, gain, loss
and deduction (computed in accordance with Exhibit B hereof) shall
be allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.


 


(a)           After giving effect to the special allocations set forth
in Section 1 of Exhibit C attached hereto, Net Income
shall be allocated to the Partners in the following order of priority:


 


(i)            First, to the Partners that have been allocated Net
Losses pursuant to the last sentence of Section 6.1(b), in proportion to
and to the extent of the excess, in the case of each such Partner, of
(A) the Net Loss allocated to such Partner under the last sentence of
Section 6.1(b), over (B) all prior allocations of Net Income to such
Partner under this Section 6.1(a)(i); and


 


(ii)           Second, to the Partners in accordance with their
respective Percentage Interests.


 


(b)           After giving effect to the special allocations set forth
in Section 1 of Exhibit C attached hereto, Net Losses
shall be allocated to the Partners in accordance with their respective
Percentage Interests.  In no event shall
Net Losses be allocated to a Limited Partner to the extent such allocation
would result in such partner having an Adjusted Capital Account Deficit (per
Unit) at the end of any taxable year in excess of the Adjusted Capital Account
Deficit (per Unit) of any other Limited Partner.  All such Net Losses shall be allocated to the
other Partners.


 


(c)           Notwithstanding the provisions of Sections 6.1(a) and
(b) above, any net capital gains (computed in accordance with Exhibit B)
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 Carrying
Value of Partnership assets under Section 704(b) of the Code, shall
first be allocated to the LTIP Unitholders until the aggregate Economic Capital
Account Balances of such LTIP Unitholders, to the extent attributable to their
ownership of LTIP Units, are equal to the product of (i) the OP Unit
Economic Balance, multiplied by (ii) the number of such LTIP Unitholders’
LTIP Units.


 


For
this purpose, the “Economic Capital Account Balances” of the LTIP
Unitholders will be equal to their Capital Account balances, computed for book
purposes, plus the amount of their shares of any Partner Minimum Gain or
Partnership Minimum Gain, in either case to the extent attributable to their
ownership of LTIP Units.  Similarly, the “OP
Unit Economic Balance” shall mean (i) the Capital Account balance of STAG
REIT, plus the amount of STAG REIT’s share of any Partner Minimum Gain or
Partnership Minimum Gain, in either case to the extent attributable to STAG
REIT’s ownership of OP Units and computed on a hypothetical basis after taking
into account all allocations through the date on which any allocation is made
under this 


 


26

















 


Section 6.1(c), divided by (ii) the
number of STAG REIT’s OP Units.  Any
allocations under this Section 6.1(c) shall be made among the
LTIP Unitholders in proportion to the amounts required to be allocated to each
under this Section 6.l(c). 
The parties agree that the intent of this Section 6.1(c) is
to make the Capital Account balances of the LTIP Unitholders with respect to
each of their LTIP Units economically equivalent to the Capital Account balance
of STAG REIT with respect to each of its OP Units if the Carrying Value of the
Partnership’s property has been adjusted in accordance with Exhibit B
in a corresponding amount.


 


(d)           Subject to Section 6.1(e),
if and to the extent any payment or reimbursement to the General Partner or
STAG REIT made pursuant to Section 7.7 or otherwise is determined
for U.S. federal income tax purposes not to constitute a payment of expenses to
the Partnership, the amount so determined shall constitute a guaranteed payment
with respect to capital within the meaning of Section 707(c) of the
Code, shall be treated consistently therewith by the Partnership and all
Partners and shall not be treated as a distribution for purposes of computing
the Partners’ Capital Accounts.


 


(e)           Notwithstanding any provision in this
Agreement to the contrary, if the Partnership pays or reimburses (directly or
indirectly, including by reason of giving the General Partner or the STAG REIT
or any direct or indirect Subsidiary of the STAG REIT Capital Account credit in
excess of actual Capital Contributions made by the General Partner or the STAG
REIT or any direct or indirect Subsidiary of the STAG REIT) fees, expenses or
other costs pursuant to Section 4.2, Section 4.3, Section 7.4
and/or Section 7.7 or otherwise, and if failure to treat all or
part of such payment or reimbursement as a distribution to the General Partner,
the STAG REIT or any Subsidiary of the STAG REIT (as appropriate), or the
receipt of Capital Account credit in excess of actual capital contributions,
would cause the STAG REIT to recognize income that would cause the STAG REIT to
fail to qualify as a REIT, then such payment or reimbursement (or portion
thereof) shall be treated as a distribution to the General Partner, the STAG
REIT or direct or indirect Subsidiary of the STAG REIT (as appropriate) for
purposes of this Agreement, or the Capital Account credit in excess of actual
capital contributions shall be reduced, in each case to the extent necessary to
preserve the STAG REIT’s status as a REIT. 
The Capital Account of the General Partner, the STAG REIT or any direct
or indirect Subsidiary of the STAG REIT (as appropriate) shall be reduced by
such direct or indirect payment or reimbursement (or a portion thereof) in the
same manner as an actual distribution to the General Partner, the STAG REIT, or
any direct or indirect Subsidiary of the STAG REIT (as appropriate).  To the extent treated as distributions, such
fees, expenses or other costs shall not be taken into account as Partnership
fees, expenses or costs for the purposes of this Agreement.  In the event that amounts are recharacterized
as distributions or Capital Accounts are reduced pursuant to this Section 6.1(e),
allocations under Section 6.1(a), (b) and (c) for
the current and subsequent periods shall be adjusted, as reasonably determined
by the General Partner, so that to the extent possible the Partners have the
same Capital Account balances they would have had if this Section 6.1(e) had
not applied.  This Section 6.1(e) is
intended to prevent direct or indirect reimbursements or payments under this
Agreement from giving rise to a violation of the STAG REIT’s REIT requirements
while at the same time preserving to the extent possible the parties’ intended
economic arrangement and shall be interpreted and applied consistent with such
intent.


 


27

















 


ARTICLE 7

MANAGEMENT AND OPERATIONS OF BUSINESS


 


Section 7.1             Management.


 


(a)           Except as otherwise expressly provided in this Agreement,
all management powers over the business and affairs of the Partnership are and
shall be exclusively vested in the General Partner, and no Limited Partner
shall have any right to participate in or exercise control or management power
over the business and affairs of the Partnership.  The General Partner may not be removed by the
Limited Partners, with or without cause, except with the consent of the General
Partner.  In addition to the powers now
or hereafter granted to a general partner of a limited partnership under
applicable law or which are granted to the General Partner under any other
provision of this Agreement, the General Partner, subject to Section 7.3
hereof, shall have full power and authority to do all things deemed necessary,
desirable or convenient by it to conduct the business of the Partnership, to
exercise all powers set forth in Section 3.2 hereof and to
effectuate the purposes set forth in Section 3.1 hereof, including,
without limitation:


 


(i)            the making of any expenditures, the lending or borrowing
of money (including, without limitation, making prepayments on loans and
borrowing money to permit the Partnership to make distributions to its Partners
in such amounts as will permit STAG REIT (so long as STAG REIT desires to maintain
its qualification as a REIT) to avoid the payment of any federal income tax
(including, for this purpose, any excise tax pursuant to Section 4981 of
the Code) and to make distributions to its stockholders in amounts sufficient
to permit STAG REIT to maintain its qualification as a REIT), the assumption or
guarantee of, or other contracting for, indebtedness and other liabilities, the
issuance of evidence of indebtedness (including the securing of the same by
deed, mortgage, deed of trust or other lien or encumbrance on the Partnership’s
assets) and the incurring of any obligations it deems necessary for the conduct
of the activities of the Partnership;


 


(ii)           the making of tax, regulatory and other filings or
elections, or rendering of periodic or other reports to governmental or other
agencies having jurisdiction over the business or assets of the Partnership;


 


(iii)          the acquisition, sale, lease, transfer, exchange or other
disposition of any assets of the Partnership (including the exercise or grant of
any conversion, option, privilege, or subscription right or other right
available in connection with any assets at any time held by the Partnership) or
the merger or other combination of the Partnership with or into another entity
(all of the foregoing subject to any prior approval only to the extent required
by Section 7.3 or 8.9 hereof);


 


(iv)          the mortgage, pledge, encumbrance or hypothecation of any
assets of the Partnership, the use of the assets of the Partnership (including,
without limitation, cash on hand) for any purpose consistent with the terms of
this Agreement and on any terms that it sees fit, including, without
limitation, the financing of the conduct of the operations of the Partnership,
the General Partner, STAG REIT or any of the Partnership’s, the General Partner’s
or STAG REIT’s Subsidiaries, the lending of funds to other Persons (including,
without 


 


28

















 


limitation, the Subsidiaries of the Partnership, the
General Partner and/or STAG REIT) and the repayment of obligations of the
Partnership and its Subsidiaries and any other Person in which it has an equity
investment, and the making of capital contributions to its Subsidiaries;


 


(v)           the negotiation, execution, delivery and performance of any
contracts, conveyances or other instruments that the General Partner considers
useful or necessary or convenient to the conduct of the Partnership’s
operations or the implementation of the General Partner’s powers under this
Agreement, including, without limitation, contracting with consultants,
accountants, legal counsel, other professional advisors and other agents and
the payment of their expenses and compensation out of the Partnership’s assets;


 


(vi)          the distribution of Partnership cash or other Partnership
assets in accordance with this Agreement;


 


(vii)         holding, managing, investing and reinvesting cash and other
assets of the Partnership;


 


(viii)        the collection and receipt of revenues
and income of the Partnership;


 


(ix)           the establishment of one or more divisions of the
Partnership, the selection and dismissal of employees of the Partnership
(including, without limitation, employees who may be designated as officers
with titles such as “president,” “vice president,” “secretary” and “treasurer”
of the Partnership), and agents, outside attorneys, accountants, consultants
and contractors of the Partnership, and the determination of their compensation
and other terms of employment or hiring;


 


(x)            the maintenance of such insurance for the benefit of the
Partnership and the Partners as it deems necessary or appropriate;


 


(xi)           the formation of, or acquisition of an interest in, and
the contribution of property to, any further limited or general partnerships,
limited liability companies, real estate investment trusts, corporations,
entities that are treated as REITs, “taxable REIT subsidiaries” or foreign
corporations for federal income tax purposes, joint ventures or other
relationships that it deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of property or the making of
loans to, its, STAG REIT’s or the General Partner’s Subsidiaries and any other
Person in which it has an equity investment from time to time or the incurrence
of indebtedness on behalf of such Persons or the guarantee of obligations of
such Persons and the making of any tax, regulatory or other filing or election
with respect to any of the foregoing Persons); provided, that as long as
STAG REIT has determined to continue to qualify as a REIT, the Partnership may
not engage in any such formation, acquisition or contribution that would cause
STAG REIT to fail to qualify as a REIT;


 


(xii)          the control of any matters affecting the rights and
obligations of the Partnership, including the settlement, compromise,
submission to arbitration or any other form of dispute resolution, or
abandonment of, any claim, cause of action, liability, debt or damages, due or
owing to or from the Partnership, the commencement or defense of suits, legal
proceedings, administrative proceedings, arbitrations or other forms of dispute
resolution, and 


 


29

















 


the representation of the Partnership in all suits
or legal proceedings, administrative proceedings, arbitrations or other forms
of dispute resolution, the incurrence of legal expense, and the indemnification
of any Person against liabilities and contingencies to the extent permitted by
law;


 


(xiii)         the undertaking of any action in
connection with the Partnership’s direct or indirect investment in any
Subsidiary or any other Person (including, without limitation, the contribution
or loan of funds by the Partnership to such Persons);


 


(xiv)        except as otherwise specifically set forth in this Agreement,
the determination of the fair market value of any Partnership property
distributed in kind using such reasonable method of valuation as the General
Partner may adopt;


 


(xv)         the enforcement of any rights against any Partner pursuant
to representations, warranties, covenants and indemnities relating to such
Partner’s contribution of property or assets to the Partnership;


 


(xvi)        the exercise, directly or indirectly, through any
attorney-in-fact acting under a general or limited power of attorney, of any
right, including the right to vote, appurtenant to any asset or investment held
by the Partnership;


 


(xvii)       the exercise of any of the powers of the
General Partner enumerated in this Agreement on behalf of or in connection with
any Subsidiary of the Partnership or any other Person in which the Partnership
has a direct or indirect interest, or jointly with any such Subsidiary or other
Person;


 


(xviii)      the exercise of any of the powers of the
General Partner enumerated in this Agreement on behalf of any Person in which
the Partnership does not have an interest pursuant to contractual or other
arrangements with such Person;


 


(xix)         the making, execution, delivery and performance of any and
all deeds, leases, notes, mortgages, deeds of trust, security agreements,
conveyances, contracts, guarantees, warranties, indemnities, waivers, releases
or legal instruments or agreements in writing necessary, appropriate or
convenient, in the judgment of the General Partner, for the accomplishment of
any of the powers of the General Partner enumerated in this Agreement;


 


(xx)          the issuance of additional OP Units and other partnership
interests, as appropriate, in connection with Capital Contributions by
Additional Limited Partners and additional Capital Contributions by Partners
pursuant to Article 4 hereof;


 


(xxi)         the taking of any action necessary or appropriate to enable
STAG REIT to qualify as a REIT;


 


(xxii)        the management, operation, leasing,
landscaping, repair, alteration, demolition, replacement or improvement of any
Property;


 


(xxiii)       an election to dissolve the Partnership
pursuant to Section 13.1(c) hereof;


 


30














 


(xxiv)                    the amendment and
restatement of Exhibit A hereto to reflect accurately at all times
the Capital Contributions and Percentage Interests of the Partners as the same
are adjusted from time to time to the extent necessary to reflect redemptions,
Capital Contributions, the issuance of OP Units, the admission of any
Additional Limited Partner or any Substituted Limited Partner or otherwise;


 


(xxv)                       the
registration of any class of securities of the Partnership under the Securities
Act or the Exchange Act, and the listing of any debt securities of the
Partnership on any exchange; and


 


(xxvi)                    the taking of any and all
acts necessary or prudent to ensure that the Partnership will not be classified
as a “publicly traded partnership” under Code Section 7704.


 


(b)                                 Each of the
Limited Partners agrees that the General Partner is authorized to execute,
deliver and perform the above-mentioned agreements and transactions on behalf
of the Partnership without any further act, approval or vote of the Partners,
notwithstanding any other provision of this Agreement (except as provided in Section 7.3),
the Act or any applicable law, rule or regulation, to the fullest extent
permitted under the Act or other applicable law, rule or regulation.  The execution, delivery or performance by the
General Partner or the Partnership of any agreement authorized or permitted
under this Agreement shall not constitute a breach by the General Partner of
any duty that the General Partner may owe the Partnership or the Limited
Partners or any other Persons under this Agreement or of any duty stated or
implied by law or equity.


 


(c)                                  At all times
from and after the date hereof, the General Partner may cause the Partnership
to establish and maintain working capital accounts and other cash or similar
balances in such amounts as the General Partner, in its sole and absolute
discretion, deems appropriate and reasonable from time to time.


 


(d)                                 In exercising
its authority under this Agreement, the General Partner may, but shall be under
no obligation to, take into account the tax consequences to any Partner of any
action taken by it.  The General Partner
and the Partnership shall not be liable to a Limited Partner under any
circumstances as a result of an income tax liability incurred by such Limited
Partner as a result of an action (or inaction) by the General Partner taken
pursuant to its authority under this Agreement and in accordance with the terms
of Section 7.3.


 


Section 7.2                                      Certificate of
Limited Partnership.


 


The
General Partner has filed the Certificate with the Secretary of State of the
State of Delaware as required by the Act. 
The General Partner shall use all reasonable efforts to cause to be
filed such other certificates or documents as may be reasonable and necessary
or appropriate for the formation, continuation, qualification and operation of
a limited partnership (or a partnership in which the limited partners have
limited liability) in the State of Delaware and any other state, or the
District of Columbia, in which the Partnership may elect to do business or own
property.  To the extent that such action
is determined by the General Partner to be reasonable and necessary or
appropriate or convenient, the General Partner shall file amendments to and restatements
of the Certificate and do all of the things to maintain the Partnership as a
limited 


 


31

















 


partnership
(or a partnership in which the limited partners have limited liability) under
the laws of the State of Delaware and each other state, or the District of
Columbia, in which the Partnership may elect to do business or own property.
Subject to the terms of Section 8.5(a)(iv) hereof, the General
Partner shall not be required, before or after filing, to deliver or mail a
copy of the Certificate or any amendment thereto or restatement thereof to any
Limited Partner.


 


Section 7.3                                      Restrictions on
General Partner Authority.


 


The
General Partner may not take any action in contravention of an express
prohibition or limitation of this Agreement without the written Consent of the
Limited Partners, or such other percentage of the Limited Partners as may be
specifically provided for under a provision of this Agreement.


 


Section 7.4                                      Reimbursement
of the General Partner.


 


(a)                                  Except as
provided in this Section 7.4 and elsewhere in this Agreement
(including the provisions of Articles 5 and 6 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)                                 The General
Partner and its Affiliates shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole and absolute
discretion, for all expenditures that each incurs relating to the ownership and
operation of, or for the benefit of, the Partnership; provided, that the
amount of any such reimbursement shall be reduced by any interest earned by the
General Partner with respect to bank accounts or other instruments or accounts
held by it on behalf of the Partnership; and provided, further,
that the General Partner and its Affiliates shall not be reimbursed for any (i) directors’
fees; (ii) income tax liabilities or (iii) filing or similar fees in
connection with maintaining the General Partner’s or any such Affiliate’s
continued existence that are incurred by the General Partner or an Affiliate,
but the Partners acknowledge that all other expenses of the General Partner and
its Affiliates are deemed to be for the benefit of the Partnership. Such
reimbursement shall be in addition to any reimbursement made as a result of
indemnification pursuant to Section 7.7 hereof.  Included among the expenditures for which the
General Partner shall be entitled to reimbursement hereunder shall be any
payments of debt service made by the General Partner, in its capacity as
General Partner, as guarantor or otherwise, with respect to indebtedness
encumbering any property held by the Partnership.


 


(c)                                  As set forth in
Section 4.3, STAG REIT shall be treated as having made a Capital
Contribution in the amount of all expenses that it incurs and pays relating to
the Initial Public Offering, any other REIT Share Offering and any other
issuance of REIT Shares, other securities or New Securities pursuant to Section 4.2,
the proceeds from the issuance of which are contributed to the Partnership.


 


(d)                                 In the event
that STAG REIT shall elect to purchase from its stockholders REIT Shares for
the purpose of delivering such REIT Shares to satisfy an obligation under any
distribution reinvestment program adopted by STAG REIT, any employee share
purchase plan adopted by STAG REIT or Management Company, or any similar
obligation or arrangement 


 


32

















 


undertaken by STAG REIT in the future, the purchase
price paid by STAG REIT for such REIT Shares and any other expenses incurred by
STAG REIT in connection with such purchase shall be considered expenses of the
Partnership and shall be reimbursed to the General Partner, subject to the
condition that: (i) if such REIT Shares subsequently are sold by STAG
REIT, the General Partner shall pay to the Partnership any proceeds received by
STAG REIT for such REIT Shares (which sales proceeds shall include the amount
of distributions reinvested under any distribution reinvestment or similar
program; provided, that a transfer of REIT Shares for OP Units pursuant
to Section 8.6 would not be considered a sale for such purposes);
and (ii) if such REIT Shares are not retransferred by STAG REIT within
thirty (30) days after the purchase thereof, the General Partner shall cause
the Partnership to cancel a number of OP Units held by STAG REIT equal to the
product obtained by multiplying the Conversion Factor by the number of such
REIT Shares (in which case such reimbursement shall be treated as a
distribution in redemption of OP Units held by the General Partner).


 


Section 7.5                                      Outside
Activities of the General Partner.


 


Neither
the General Partner nor STAG REIT shall directly or indirectly enter into or
conduct any business, other than in connection with, (a) the ownership,
acquisition and disposition of Partnership Interests, (b)  the management
of the business and affairs of the Partnership, (c) the operation of STAG
REIT as a reporting company with a class (or classes) of securities registered
under the Exchange Act, (d) the operations of STAG REIT as a REIT,
(e) the offering, sale, syndication, private placement or public offering
of stock, bonds, securities or other interests of STAG REIT or the Partnership,
(f) financing or refinancing of any type related to the Partnership or its
assets or activities, and (g) such activities as are incidental thereto; provided,
however, that the General Partner or STAG REIT may, in its sole and
absolute discretion, from time to time hold or acquire assets in its own name
or otherwise other than through the Partnership so long as the General Partner
or STAG REIT, as applicable, takes commercially reasonable measures to ensure
that the economic benefits and burdens of such Property are otherwise vested in
the Partnership, through assignment, mortgage loan or otherwise. Nothing
contained herein shall be deemed to prohibit the General Partner or STAG REIT
from executing guarantees of Partnership debt.


 


Section 7.6                                      Contracts with
Affiliates.


 


(a)                                  The Partnership
may lend or contribute funds or other assets to its, the General Partner’s or
STAG REIT’s Subsidiaries or other Persons in which it, the General Partner or
STAG REIT 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.


 


(b)                                 The Partnership
may transfer assets to joint ventures, other partnerships, limited liability
companies, real estate investment trusts, corporations or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions consistent with this Agreement and applicable law as
the General Partner, in its sole and absolute discretion, believes are
advisable.


 


33

















 


(c)                                  Except as
expressly permitted by this Agreement, neither the General Partner nor any of
its Affiliates shall sell, transfer or convey any property to, or purchase any
property from, the Partnership, directly or indirectly, except pursuant to
transactions that are determined by the General Partner in good faith to be
fair and reasonable.


 


(d)                                 The General
Partner, in its sole and absolute discretion, and without the approval of the
Limited Partners, may propose and adopt, on behalf of the Partnership, employee
benefit plans, share option plans, and similar plans (including without
limitation plans that contemplate the issuance of LTIP Units) funded by the
Partnership for the benefit of employees of Management Company, STAG REIT, the
General Partner, the Partnership, Subsidiaries of the Partnership or any
Affiliate of any of them in respect of services performed, directly or
indirectly, for the benefit of the Partnership, the General Partner, STAG REIT
or any Subsidiaries of the Partnership.


 


(e)                                  The General
Partner is expressly authorized to enter into, in the name and on behalf of the
Partnership, and without the approval of the Limited Partners, a right of first
opportunity arrangement and other conflict avoidance agreements with the
General Partner, STAG REIT, the Management Company and various Affiliates of
the Partnership, the General Partner, STAG REIT, the Management Company, on
such terms as the General Partner, in its sole and absolute discretion,
believes are advisable, including but not limited to, a co-investment and
allocation agreement.


 


(f)                                    The General
Partner is expressly authorized to enter into, in the name and on behalf of the
Partnership, any services agreement with Affiliates of any of the Partnership,
the General Partner, STAG REIT, on such terms as the General Partner, in its
sole and absolute discretion, believes are advisable.


 


Section 7.7                                      Indemnification.


 


(a)                                  To the fullest
extent permitted by Delaware law, the Partnership shall indemnify each
Indemnitee from and against any and all losses, claims, damages, liabilities,
joint or several, expenses (including, without limitation, attorneys’ fees and
other legal fees and expenses), judgments, fines, settlements, and other
amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that relate to
the operations of the Partnership or the General Partner as set forth in this
Agreement, in which such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise, except to the extent such Indemnitee acted
in bad faith, or with gross negligence or willful misconduct. Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty or otherwise for any indebtedness of
the Partnership or any Subsidiary of the Partnership (including without
limitation, any indebtedness which the Partnership or any Subsidiary of the
Partnership has assumed or taken subject to), and the General Partner is hereby
authorized and empowered, on behalf of the Partnership, to enter into one or
more indemnity agreements consistent with the provisions of this Section 7.7
in favor of any Indemnitee having or potentially having liability for any such
indebtedness. Any indemnification pursuant to this Section 7.7
shall be made only out of the assets of the Partnership, and neither the
General Partner nor any Limited Partner shall have any obligation to 


 


34

















 


contribute to the capital of the Partnership, or
otherwise provide funds, to enable the Partnership to fund its obligations
under this Section 7.7.


 


(b)                                 Reasonable
expenses incurred by an Indemnitee who is a party to a proceeding shall be paid
or reimbursed by the Partnership 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 Section 7.7(a) has
been met, and (ii) an undertaking by or on behalf of the Indemnitee to
repay such amount if it shall be determined that the Indemnitee is not entitled
to be indemnified as authorized in Section 7.7(a).


 


(c)                                  The
indemnification provided by this Section 7.7 shall be in addition
to any other rights to which an Indemnitee or any other Person may be entitled
under any agreement, pursuant to any vote of the Partners, as a matter of law
or otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity and shall inure to the benefit of the heirs, successors, assigns
and administrators of the Indemnitee unless otherwise provided in a written
agreement with such Indemnitee or in the writing pursuant to which such
Indemnitee is indemnified.


 


(d)                                 The Partnership
may, but shall not be obligated to, purchase and maintain insurance, on behalf
of the Indemnitees and such other Persons as the General Partner shall
determine, against any liability that may be asserted against or expenses that
may be incurred by such Person in connection with the Partnership’s activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.


 


(e)                                  Any liabilities
which an Indemnitee incurs as a result of acting on behalf of the Partnership,
the General Partner or STAG REIT (whether as a fiduciary or otherwise) in
connection with the operation, administration or maintenance of an employee
benefit plan or any related trust or funding mechanism (whether such
liabilities are in the form of excise taxes assessed by the IRS, penalties
assessed by the Department of Labor, restitutions to such a plan or trust or
other funding mechanism or to a participant or beneficiary of such plan, trust
or other funding mechanism, or otherwise) shall be treated as liabilities or
judgments or fines under this Section 7.7, unless such liabilities
arise as a result of (i) such Indemnitee’s intentional misconduct or
knowing violation of the law; (ii) any transaction in which such
Indemnitee received a personal benefit in violation or breach of any provision
of this Agreement or applicable law; or (iii) in the case of any criminal
proceeding, the Indemnitee had reasonable cause to believe that the act or
omission was unlawful.


 


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


 


(g)                                 An Indemnitee
shall not be denied indemnification in whole or in part under this Section 7.7
because the Indemnitee had an interest in the transaction with respect to which
the indemnification applies if the transaction was otherwise permitted by the
terms of this Agreement.


 


35

















 


(h)                                 The provisions
of this Section 7.7 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.  Any amendment, modification or repeal of this
Section 7.7 or any provision hereof shall be prospective only and
shall not in any way affect the Partnership’s liability to any Indemnitee under
this Section 7.7, as in effect immediately prior to such amendment,
modification, or repeal with respect to claims arising from or relating to
matters occurring, in whole or in part, prior to such amendment, modification
or repeal, regardless of when such claims may arise or be asserted.


 


Section 7.8                                      Liability of
the General Partner.


 


(a)                                  Notwithstanding
anything to the contrary set forth in this Agreement, none of the General
Partner, its Affiliates, or any of their respective officers, trustees,
directors, stockholders, partners, members, employees, representatives or
agents or any officer, employee, representative or agent of the Partnership and
its Affiliates (individually, a “Covered Person” and collectively, the “Covered
Persons”) shall be liable for monetary damages to the Partnership, any
Partners or any Assignees for losses sustained or liabilities incurred as a
result of errors in judgment or of any act or omission if the Covered Person’s
conduct did not constitute bad faith, gross negligence or willful misconduct.


 


(b)                                 The Limited
Partners expressly acknowledge that the General Partner is acting on behalf of
the Partnership and the stockholders of STAG REIT collectively, that the
General Partner is under no obligation to consider the separate interests of
the Limited Partners (except as otherwise provided herein) in deciding whether
to cause the Partnership to take (or decline to take) any actions, and that the
General Partner shall not be liable for monetary damages for losses sustained,
liabilities incurred, or benefits not derived by Limited Partners in connection
with such decisions; provided, that the General Partner has acted in
good faith.


 


(c)                                  The General
Partner may exercise any of the powers granted to it by this Agreement and
perform any of the duties imposed upon it hereunder either directly or by or
through its employees and agents.  The
General Partner shall not be responsible for any misconduct or negligence on
the part of any such employee or agent appointed by the General Partner in good
faith.


 


(d)                                 Any amendment,
modification or repeal of this Section 7.8 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on
the Covered Person’s liability to the Partnership and the Limited Partners
under this Section 7.8 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be
asserted.


 


(e)                                  To the extent
that, at law or in equity, a Covered Person has duties (including fiduciary
duties) and liabilities relating thereto to the Partnership or to the Partners,
any Covered Person acting under this Agreement or otherwise shall not be liable
to the Partnership or to any Partner for its good faith reliance on the
provisions of this Agreement.  The
provisions of this Agreement, to the extent that they restrict the duties and
liabilities of a 


 


36

















 


Covered Person otherwise existing at law or in
equity, are agreed by the Partners to replace such other duties and liabilities
of such Covered Person.


 


(f)                                    Whenever in
this Agreement the General Partner is permitted or required to make a decision (i) in
its “sole discretion” or “discretion,” or under a similar grant of authority or
latitude, the General Partner shall be entitled to consider such interests and
factors as it desires and may consider its own interests and the interests of
STAG REIT, and shall have no duty or obligation to give any consideration to
any interest of or factors affecting the Partnership or the Limited Partners;
or (ii) in its “good faith” or under another express standard, the General
Partner shall act under such express standard and shall not be subject to any
other or different standards imposed by this Agreement or by law or in equity
or any other agreement contemplated herein or otherwise.


 


Section 7.9                                      Other Matters
Concerning the General Partner.


 


(a)                                  The General
Partner may rely and shall be protected in acting, or refraining from acting,
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, or other paper or document
believed by it in good faith to be genuine and to have been signed or presented
by the proper party or parties.


 


(b)                                 The General
Partner may consult with legal counsel, accountants, appraisers, management
consultants, investment bankers, architects, engineers, environmental
consultants and other consultants and advisers selected by it, and any act
taken or omitted to be taken in reliance upon the opinion of such Persons as to
matters which the General Partner reasonably believes to be within such Person’s
professional or expert competence shall be conclusively presumed to have been
done or omitted in good faith and in accordance with such opinion.


 


(c)                                  The General
Partner shall have the right, in respect of any of its powers or obligations
hereunder, to act through any of its duly authorized officers and duly
appointed attorneys-in-fact.  Each such
attorney shall, to the extent provided by the General Partner in the power of attorney,
have full power and authority to do and perform each and every act and duty
which is permitted or required to be done by the General Partner hereunder.


 


(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 STAG REIT to continue to qualify as a REIT or (ii) to
avoid STAG REIT incurring any taxes under Section 337(d), 857, 1374 or
4981 of the Code, is expressly authorized under this Agreement and is deemed
approved by all of the Limited Partners.


 


Section 7.10                                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 


 


37

















 


Partnership,
the General Partner or one or more nominees, as the General Partner may
determine in its sole and absolute discretion, including Affiliates of the
General Partner.  The General Partner
hereby declares and warrants that any Partnership assets for which legal title
is held in the name of the General Partner or any nominee or Affiliate of the
General Partner shall be held by the General Partner for the use and benefit of
the Partnership in accordance with the provisions of this Agreement; provided,
however, that the General Partner shall use its best 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.


 


Section 7.11                                Reliance by
Third Parties.


 


Notwithstanding
anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the General Partner has full power
and authority, without consent or approval of any other Partner or Person, to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
take any and all actions on behalf of the Partnership and such Person shall be
entitled to deal with the General Partner as if the General Partner were the
Partnership’s sole party in interest, both legally and beneficially.  Each Limited Partner hereby waives any and
all defenses or other remedies which may be available against such Person to
contest, negate or disaffirm any action of the General Partner in connection
with any such dealing. In no event shall any Person dealing with the General
Partner or its representatives be obligated to ascertain that the terms of this
Agreement have been complied with or to inquire into the necessity or
expedience of any act or action of the General Partner or its
representatives.  Each and every certificate,
document or other instrument executed on behalf of the Partnership by the
General Partner or its representatives shall be conclusive evidence in favor of
any and every Person relying thereon or claiming thereunder that (i) at
the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect; (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership; and (iii) such
certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership.


 


ARTICLE 8


RIGHTS AND OBLIGATIONS OF
LIMITED PARTNERS


 


Section 8.1                                      Limitation of
Liability.


 


The
Limited Partners shall have no liability under this Agreement (other than for
breach thereof) except as expressly provided in this Agreement, including Section 10.5
hereof, or under the Act.


 


Section 8.2                                      Management of
Business.


 


No
Limited Partner or Assignee (other than the General Partner, any of its
Affiliates or any officer, trustee, director, member, employee or agent of the
General Partner, the Partnership 


 


38

















 


or
any of their Affiliates, in their capacity as such) shall take part in the
operation, management or control (within the meaning of the Act) of the
Partnership’s business, transact any business in the Partnership’s name or have
the power to sign documents for or otherwise bind the Partnership.  The transaction of any such business by the
General Partner, any of its Affiliates or any officer, trustee, director,
member, employee or agent of the General Partner, the Partnership or any of
their Affiliates, in their capacity as such, shall not affect, impair or
eliminate the limitations on the liability of the Limited Partners or Assignees
under this Agreement.


 


Section 8.3                                      Outside
Activities of Limited Partners.


 


Subject
to any agreements entered into pursuant to Section 7.6(e) hereof
and any other agreements entered into by a Limited Partner or its Affiliates
with the General Partner, the Partnership or any of its Subsidiaries or any
Affiliate thereof, any Limited Partner and any officer, trustee, director,
member, employee, agent, Affiliate or stockholder of any Limited Partner shall
be entitled to and may have business interests and engage in business
activities in addition to those relating to the Partnership, including business
interests and activities that are in direct competition with the Partnership or
that are enhanced by the activities of the Partnership. Neither the Partnership
nor any Partners shall have any rights by virtue of this Agreement in any
business ventures of any Limited Partner or Assignee.  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 business ventures of any other Person
(other than the General Partner, to the extent expressly provided herein) and
such Person shall have no obligation pursuant to this Agreement, subject to the
provisions of any other written agreements entered into by a Limited Partner or
its Affiliates with the General Partner, the Partnership or a Subsidiary, to
offer any interest in any such business ventures to the Partnership, any
Limited Partner, the General Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Limited Partner, the General Partner or such other Person, could be taken by
such Person.


 


Section 8.4                                      Return of
Capital.


 


Except
pursuant to the right of redemption set forth in Section 8.6, no
Limited Partner shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent of distributions made pursuant to this
Agreement or upon termination of the Partnership as provided herein.  Except to the extent provided by Exhibit C
hereof or as otherwise expressly provided in this Agreement, no Limited Partner
or Assignee shall have priority over any other Limited Partner or Assignee,
either as to the return of Capital Contributions or as to profits, losses or
distributions.


 


Section 8.5                                      Rights of
Limited Partners Relating to the Partnership.


 


(a)                                  In addition to
the other rights provided by this Agreement or by the Act, and except as
limited by Section 8.5(c) hereof, each Limited Partner shall
have the right, for a purpose reasonably related to such Limited Partner’s
interest as a limited partner in the Partnership, upon written demand with a
statement of the purpose of such demand and at such Limited Partner’s own
expense (including such copying and administrative charges as the General
Partner may establish from time to time):


 


39

















 


(i)                                     to obtain a
copy of the most recent annual and quarterly reports prepared by STAG REIT and
distributed to its stockholders, including annual and quarterly reports filed
with the Securities and Exchange Commission by STAG REIT pursuant to the
Exchange Act;


 


(ii)                                  to obtain a
copy of the Partnership’s federal, state and local income tax returns for each
Partnership Year;


 


(iii)                               to obtain a
current list of the name and last known business, residence or mailing address
of each Partner; and


 


(iv)                              to obtain a
copy of this Agreement and the Certificate and all amendments thereto, together
with executed copies of all powers of attorney pursuant to which this
Agreement, the Certificate and all amendments thereto have been executed.


 


(b)                                 The Partnership
shall notify the requesting Limited Partner, upon the written request of such
Limited Partner, of the then current Conversion Factor.


 


(c)                                  Notwithstanding
any other provision of this Section 8.5, the General Partner may
keep confidential from the Limited Partners, for such period of time as the
General Partner determines in its sole and absolute discretion to be
reasonable, any information that (i) the General Partner reasonably
believes to be in the nature of trade secrets or other information, the
disclosure of which the General Partner in good faith believes is not in the
best interests of the Partnership or could damage the Partnership or its
business; or (ii) the Partnership is required by law or by agreements with
an unaffiliated third party to keep confidential.


 


Section 8.6                                      Redemption Right.


 


(a)                                  On or after the
date that is one year from the date of the issuance of an OP Unit or Units to a
Limited Partner, subject to Sections 8.6(b) and 8.6(c) hereof
and any separate agreement entered into between the Partnership and a Limited
Partner, such Limited Partner shall have the right (the “Redemption Right”)
to require the Partnership to redeem on a Specified Redemption Date all or a
portion of the OP Units (provided, that such OP Units constitute Common
Units) held by such Limited Partner at a redemption price per OP Unit equal to
and in the form of the Cash Amount to be paid by the Partnership; provided that
the foregoing limitation shall not affect the Limited Partner’s rights under Section 11.2(b) hereof.  The Redemption Right shall be exercised
pursuant to a Notice of Redemption delivered to the Partnership (with a copy to
the General Partner) by the Limited Partner who is exercising the redemption
right (the “Redeeming Partner”); provided, however, that
the Partnership shall not be obligated to satisfy such Redemption Right if the
STAG REIT elects to purchase the OP Units subject to the Notice of Redemption
pursuant to Section 8.6(b). 
A Limited Partner may not exercise the Redemption Right for less than
one thousand (1,000) OP Units at any one time or, if such Limited Partner holds
less than one thousand (1,000) OP Units, all of the OP Units held by such
Partner.  The Redeeming Partner shall
have no right, with respect to any OP Units so redeemed, to receive any
distributions with a Partnership Record Date on or after the Specified
Redemption Date.  The Assignee of any
Limited Partner may exercise the rights of such Limited Partner pursuant to
this Section 8.6, and such Limited Partner shall be deemed to have
assigned 


 


40

















 


such rights to such Assignee and shall be bound by
the exercise of such rights by such Assignee. 
In connection with any exercise of such rights by an Assignee on behalf
of a Limited Partner, the Cash Amount shall be paid by the Partnership directly
to such Assignee and not to such Limited Partner.  Any OP Units redeemed by the Partnership
pursuant to this Section 8.6(a) shall be cancelled upon such
redemption.


 


(b)                                 Notwithstanding
the provisions of Section 8.6(a), a Limited Partner that exercises
the Redemption Right shall be deemed to have offered to sell the OP Units
described in the Notice of Redemption to STAG REIT, and STAG REIT may, in its
sole and absolute discretion, elect to purchase directly and acquire such OP
Units by paying to the Redeeming Partner the REIT Shares Amount on the
Specified Redemption Date, whereupon STAG REIT shall acquire the OP Units
offered for redemption by the Redeeming Partner and shall be treated for all
purposes of this Agreement as the owner of such OP Units.  If STAG REIT shall elect to exercise its
right to purchase OP Units under this Section 8.6(b) with
respect to a Notice of Redemption, it shall so notify the Redeeming Partner
within five (5) Business Days after the receipt by it of such Notice of
Redemption.  Unless STAG REIT (in its
sole and absolute discretion) shall exercise its right to purchase OP Units
from the Redeeming Partner pursuant to this Section 8.6(b), STAG
REIT shall not have any obligation to the Redeeming Partner or the Partnership
with respect to the Redeeming Partner’s exercise of the Redemption Right.  In the event STAG REIT shall exercise its
right to purchase OP Units with respect to the exercise of a Redemption Right
in the manner described in the first sentence of this Section 8.6(b),
the Partnership shall have no obligation to pay any amount to the Redeeming
Partner with respect to such Redeeming Partner’s exercise of such Redemption
Right, and each of the Redeeming Partner, the Partnership, the General Partner,
and STAG REIT shall treat the transaction between STAG REIT and the Redeeming
Partner, for federal income tax purposes, as a sale of the Redeeming Partner’s
OP Units to STAG REIT. Each Redeeming Partner agrees to execute such documents
as the General Partner may reasonably require in connection with the issuance
of REIT Shares upon exercise of the Redemption Right, including, if STAG REIT
is relying upon the exemption from registration under the Securities Act
provided by Regulation D promulgated under the Securities Act, or any successor
rule, a document pursuant to which the Redeeming Partner makes a representation
that it is an accredited investor; provided, however, that if the
Redeeming Partner cannot make such representation, then the Redeeming Partner shall
have no right to exercise its Redemption Right. 
In case of any reclassification of the REIT Shares (including, but not
limited to, any reclassification upon a consolidation or merger in which STAG
REIT is the continuing corporation) into securities other than REIT Shares, for
purposes of this Section 8.6(b), STAG REIT may thereafter exercise
its right to purchase OP Units for the kind and amount of shares of such
securities receivable upon such reclassification by a holder of the number of
REIT Shares for which such OP Units could be purchased pursuant to this Section immediately
prior to such reclassification.  Any REIT
Shares issued to a Redeeming Partner upon the exercise by STAG REIT of its
right to purchase OP Units under this Section 8.6(b), shall not be
required to be registered under the Securities Act, unless subject to a
separate agreement between STAG REIT and the Redeeming Partner.


 


(c)                                  Notwithstanding
the provisions of Section 8.6(a) and Section 8.6(b),
a Partner shall not be entitled, except as otherwise provided in a written
agreement between the Partner and the Partnership, to exercise the Redemption
Right pursuant to Section 8.6(a) to the extent that the
delivery of REIT Shares to such Partner on the Specified Redemption Date by 


 


41

















 


STAG REIT pursuant to Section 8.6(b) (regardless
of whether or not STAG REIT would in fact exercise its rights under Section 8.6(b))
would (i) be prohibited under the Charter; (ii) require registration
under the Securities Act; (iii) cause STAG REIT to no longer qualify as a
REIT under the Code; or (iv) otherwise violate any applicable laws or
regulations.


 


Section 8.7                                      Conversion of
LTIP Units.


 


(a)                                  An LTIP
Unitholder shall have the right (the “Conversion Right”), at his or her
option, at any time to convert all or a portion of his or her Vested LTIP Units
into OP Units; provided, however, that a holder may not exercise the
Conversion Right for less than one hundred (100) Vested LTIP Units or, if such
holder holds less than one hundred (100) Vested LTIP Units, all of the Vested
LTIP Units held by such holder. 
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 OP Unit Economic Balance,
in each case as determined as of the effective date of conversion (the “Capital
Account Limitation”).  LTIP Unitholders
shall not have the right to convert Unvested LTIP Units into OP Units until
they become Vested LTIP Units; provided, however, that when an LTIP Unitholder is
notified of the expected occurrence of an event that will cause his or her
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.  Subject to Section 8.7(c),
the General Partner shall have the right at any time to cause a conversion of
Vested LTIP Units into OP Units.  In all
cases, the conversion of any LTIP Units into OP Units shall be subject to the
conditions and procedures set forth in this Section 8.7.


 


(b)                                 Subject to the
Capital Account Limitation, a holder of Vested LTIP Units may convert such
Units into an equal number of fully paid and non-assessable OP Units, giving
effect to all adjustments (if any) made pursuant to Section 4.6(a).  In order to exercise his or her Conversion
Right, an LTIP Unitholder shall deliver a notice (a “Conversion Notice”)
in the form attached as Exhibit F to the Partnership (with a copy
to the General Partner) not less than ten (10) nor more than sixty (60)
days prior to a date (the “Conversion Date”) specified in such
Conversion Notice;  provided, however, that
if the General Partner has not given the LTIP Unitholders notice of a proposed
or upcoming Transaction at least thirty (30) days prior to the effective date
of such Transaction, then LTIP Unitholders shall have the right to deliver a
Conversion Notice until the earlier of (x) the tenth (10th) day after such
notice from the General Partner of a Transaction or (y) the third (3rd)
Business Day immediately preceding the effective date of such Transaction. A
Conversion Notice shall be provided in the manner provided in Section 15.1.  Each LTIP Unitholder covenants and agrees
with the Partnership that all Vested LTIP Units to be converted pursuant to
this Section 8.7(b) shall be free and clear of all liens.  Notwithstanding anything herein to the
contrary, a holder of LTIP Units may deliver a Redemption Notice pursuant to Section 8.6(a) hereof
relating to those OP Units that will be issued to such holder upon conversion
of such LTIP Units into OP Units in advance of the Conversion Date; provided,
however, that the redemption of such OP 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 he or
she so wishes, the OP Units into which his or her Vested LTIP Units will be
converted can be redeemed 


 


42

















 


by the Partnership simultaneously with such
conversion, with the further consequence that, if the STAG REIT elects to
assume the Partnership’s redemption obligation with respect to such OP Units
under Section 8.6(b) hereof by delivering to such holder REIT
Shares rather than cash, then such holder can have such REIT Shares issued to
him or her simultaneously with the conversion of his or her Vested LTIP Units
into OP Units. The General Partner shall cooperate with an LTIP Unitholder to
coordinate the timing of the different events described in the foregoing
sentence.


 


(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 OP Units, giving effect to all
adjustments (if any) made pursuant to Section 4.6(a); provided,
however, that the Partnership may not cause a 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 8.7(b).


 


(d)                                 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 G
to the applicable LTIP Unitholder not less than ten (10) nor more than
sixty (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 15.1.


 


(e)                                  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 OP
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 OP Units and remaining LTIP Units, if any, held by such LTIP Unitholder
immediately after such conversion.  The
Assignee of any Limited Partner pursuant to Article 11 hereof may
exercise the rights of such Limited Partner pursuant to this Section 8.7
and such Limited Partner shall be bound by the exercise of such rights by the
Assignee.


 


(f)                                    For purposes of
making future allocations under Section 6.1(c) 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 OP Unit Economic Balance.


 


(g)                                 If the
Partnership, the General Partner or STAG REIT shall be a party to any
transaction (including without limitation a merger, consolidation, unit
exchange, self tender offer for all or substantially all OP Units or other
business combination or reorganization, or sale of all or substantially all of
the Partnership’s assets, but excluding any transaction which constitutes an
Adjustment Event) in each case as a result of which OP Units shall be exchanged
for or converted into the right, or the holders of such OP Units shall
otherwise be entitled, to receive cash, securities or other property or any combination
thereof (each of the foregoing being 


 


43

















 


referred to herein as a “Transaction”), then
the General Partner shall, immediately prior to the Transaction, exercise 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 Transaction or that would occur in connection with
the Transaction if the assets of the Partnership were sold at the Transaction
price or, if applicable, at a value determined by the General Partner in good
faith using the value attributed to the OP Units in the context of the
Transaction (in which case the Conversion Date shall be the effective date of
the Transaction). In anticipation of such Forced Conversion and the
consummation of the Transaction, the Partnership shall use commercially
reasonable efforts to cause each LTIP Unitholder to be afforded the right to
receive in connection with such Transaction in consideration for the OP Units
into which his or her 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 Transaction by a holder of the same number of OP
Units, assuming such holder of OP 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 OP Units have the opportunity to elect the
form or type of consideration to be received upon consummation of a
Transaction, prior to such 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 OP Units in connection with such 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 him or her (or by any of his
or her transferees) the same kind and amount of consideration that a holder of
an OP Unit would receive if such OP Unit holder failed to make such an
election.  Subject to the rights of the
Partnership and the General Partner under any LTIP Unit Agreement and the Plan,
the Partnership shall use commercially reasonable efforts to cause the terms of
any Transaction to be consistent with the provisions of this Section 8.7(g) 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 OP Units in connection with the Transaction that will (i) contain
provisions enabling the holders of LTIP Units that remain outstanding after
such Transaction to convert their LTIP Units into securities as comparable as
reasonably possible under the circumstances to the OP 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.


 


Section 8.8                                      Voting Rights
of LTIP Units.


 


LTIP
Unitholders shall have (a) those voting rights required from time to time
by applicable law, if any, (b) the same voting rights as a holder of OP
Units, with the LTIP Units voting as a single class with the OP Units and
having one vote per LTIP Unit; and (c) 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 at least a majority of the 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 


 


44

















 


materially
and adversely affect 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 OP Units; but subject, in any event, to the following
provisions: (i) with respect to any Transaction, so long as the LTIP Units
are treated in accordance with Section 8.7(g) hereof, the
consummation of such 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 OP Units or of any class or series of Partnership Interest,
including, without limitation, additional OP 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 OP Units.


 


ARTICLE 9


BOOKS, RECORDS, ACCOUNTING
AND REPORTS


 


Section 9.1                                      Records and
Accounting.


 


The
General Partner shall keep or cause to be kept at the principal office of the
Partnership those records and documents required to be maintained by the Act
and other books and records deemed by the General Partner to be appropriate
with respect to the Partnership’s business, including, without limitation, all
books and records necessary to provide to the Limited Partners any information,
lists and copies of documents required to be provided pursuant to Section 9.3
hereof.  Any records maintained by or on
behalf of the Partnership in the regular course of its business may be kept on,
or be in the form of, punch cards, magnetic tape, photographs, micrographics or
any other information storage device; provided, that the records so
maintained are convertible into clearly legible written form within a
reasonable period of time.  The books of
the Partnership shall be maintained, for financial and tax reporting purposes,
on an accrual basis in accordance with GAAP, or such other basis as the General
Partner determines to be necessary or appropriate.


 


Section 9.2                                      Fiscal Year.


 


The
fiscal year of the Partnership shall be the calendar year.


 


Section 9.3                                      Reports.


 


(a)                                  As soon as
practicable, but in no event later than the date on which STAG REIT mails its
annual report to its stockholders, the General Partner shall cause to be mailed
to each Limited Partner as of the close of the Partnership Year, an annual
report containing financial statements of the Partnership, or of STAG REIT if
such statements are prepared solely on a consolidated basis with STAG REIT, for
such Partnership Year, presented in accordance with GAAP, such statements to be
audited by a nationally recognized firm of independent public accountants
selected by the General Partner.


 


45














 


(b)                                 As soon as practicable, but
in no event later than the date on which STAG REIT mails its quarterly report
to its stockholders, the General Partner shall cause to be mailed to each
Limited Partner as of the last day of the calendar quarter (except the last
calendar quarter of each year), a report containing unaudited financial
statements of the Partnership, or of STAG REIT if such statements are prepared
solely on a consolidated basis with STAG REIT, and such other information as
may be required by applicable law or regulation, or as the General Partner
determines to be appropriate.


 


(c)                                  The Partnership shall also
cause to be prepared such reports and/or information as are necessary for STAG
REIT to determine its qualification as a REIT and its compliance with the
requirements for REITs pursuant to the Code and Regulations.


 


ARTICLE 10

TAX MATTERS


 


Section 10.1                                Preparation of Tax Returns.


 


The
General Partner shall arrange for the preparation and timely filing of all
returns of Partnership income, gains, deductions, losses and other items
required of the Partnership for federal and state income tax purposes and shall
use all reasonable efforts to furnish, within ninety (90) days of the close of
each taxable year, the tax information reasonably required by Limited Partners
for federal and state income tax reporting purposes.


 


Section 10.2                                Tax Elections.


 


Except
as otherwise provided herein, the General Partner shall, in its sole and
absolute discretion, determine whether to make any available election pursuant
to the Code.  Notwithstanding the above,
in making any such tax election the General Partner may, but shall be under no
obligation to, take into account the tax consequences to the Limited Partners
resulting from any such election.


 


The
General Partner shall make such tax elections on behalf of the Partnership as
the Limited Partners holding a majority of the Percentage Interests of the
Limited Partners request; provided, that the General Partner believes
that such election is not adverse to the interests of STAG REIT, including its
interest in preserving its qualification as a REIT under the Code.  The General Partner can elect to use any
method permitted by Code Section 704(c) and the Regulations
thereunder to take into account any variation between the adjusted basis of any
property of the Partnership (including any property contributed to the
Partnership by any Partner after the date hereof) and such property’s Carrying
Value.  The General Partner shall have
the right to seek to revoke any tax election it makes (including, without
limitation, an election under Section 754 of the Code) upon the General
Partner’s determination, in its sole and absolute discretion, that such
revocation is in the best interests of the Partners.


 


Section 10.3                                Tax Matters Partner.


 


(a)                                  The General Partner shall be
the “tax matters partner” of the Partnership for federal income tax
purposes.  Pursuant to Section 6230(e) of
the Code, upon receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, 


 


46

















 


the tax matters partner shall furnish the IRS with
the name, address, taxpayer identification number, and profit interest of each
of the Limited Partners and the Assignees; provided, however,
that such information is provided to the Partnership by the Limited Partners
and the Assignees.


 


(b)                                 The tax matters partner is
authorized, but not required:


 


(i)                                     to enter into any settlement
with the IRS with respect to any administrative or judicial proceedings for the
adjustment of Partnership items required to be taken into account by a Partner
for income tax purposes (such administrative proceedings being referred to as a
“tax audit” and such judicial proceedings being referred to as “judicial review”),
and in the settlement agreement the tax matters partner may expressly state
that such agreement shall bind all Partners, except that such settlement
agreement shall not bind any Partner (i) who (within the time prescribed
pursuant to the Code and Regulations) files a statement with the IRS providing
that the tax matters partner shall not have the authority to enter into a
settlement agreement on behalf of such Partner; or (ii) who is a “notice
partner” (as defined in Section 6231(a)(8) of the Code) or a member
of a “notice group” (as defined in Section 6223(b)(2) of the Code);


 


(ii)                                  in the event that a notice
of a final administrative adjustment at the Partnership level of any item
required to be taken into account by a Partner for tax purposes (a “final
adjustment”) is mailed to the tax matters partner, to seek judicial review
of such final adjustment, including the filing of a petition for readjustment
with the Tax Court or the filing of a complaint for refund with the United
States Claims Court or the District Court of the United States for the district
in which the Partnership’s principal place of business is located;


 


(iii)                               to intervene in any action
brought by any other Partner for judicial review of a final adjustment;


 


(iv)                              to file a request for an
administrative adjustment with the IRS and, if any part of such request is not
allowed by the IRS, to file an appropriate pleading (petition or complaint) for
judicial review with respect to such request;


 


(v)                                 to enter into an agreement
with the IRS to extend the period for assessing any tax which is attributable
to any item required to be taken account of by a Partner for tax purposes, or
an item affected by such item; and


 


(vi)                              to take any other action on
behalf of the Partners or the Partnership in connection with any tax audit or
judicial review proceeding to the extent permitted by applicable law or
regulations.


 


The
taking of any action and the incurring of any expense by the tax matters
partner in connection with any such proceeding, except to the extent required
by law, is a matter in the sole and absolute discretion of the tax matters
partner, and the provisions relating to indemnification or liability of the
General Partner set forth in Section 7.7 and Section 7.8,
respectively, of this Agreement shall be fully applicable to the tax matters
partner in its capacity as such.


 


47

















 


(c)                                  The tax matters partner
shall receive no compensation for its services. 
All third party costs and expenses incurred by the tax matters partner
in performing its duties as such (including legal and accounting fees and
expenses) shall be borne by the Partnership. 
Nothing herein shall be construed to restrict the Partnership from
engaging an accounting and/or law firm to assist the tax matters partner in
discharging its duties hereunder, so long as the compensation paid by the
Partnership for such services is reasonable.


 


Section 10.4                                Organizational Expenses.


 


The
Partnership shall elect to deduct expenses, if any, incurred by it in forming
the Partnership ratably over a one-hundred eighty (180) month period as
provided in Section 709 of the Code.


 


Section 10.5                                Withholding.


 


Each
Limited Partner hereby authorizes the Partnership to withhold from, or pay on
behalf of or with respect to, such Limited Partner any amount of federal,
state, local or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Section 1441, 1442, 1445, or 1446 of the Code. Any
amount paid on behalf of or with respect to a Limited Partner shall constitute
a loan by the Partnership to such Limited Partner, which loan shall be repaid
by such Limited Partner within fifteen (15) days after notice from the General
Partner that such payment must be made unless (i) the Partnership
withholds such payment from a distribution which would otherwise be made to the
Limited Partner, (ii) the General Partner determines, in its sole and
absolute discretion, that such payment may be satisfied out of the available
funds of the Partnership which would, but for such payment, be distributed to
the Limited Partner or (iii) treatment as a loan would jeopardize the STAG
REIT’s status as a REIT (in which case such Limited Partner shall pay such
amount to the Partnership on or before the date the Partnership pays such amount
on behalf of such Limited Partner). Any amounts withheld pursuant to the
foregoing clause (i) or (ii) shall be treated as having been
distributed to such Limited Partner unless, in the case of amounts governed by
clause (iii), the Limited Partner timely pays the amount withheld to the
Partnership.  Each Limited Partner hereby
unconditionally and irrevocably grants to the Partnership a security interest
in such Limited Partner’s obligation to pay to the Partnership any amounts
required to be paid pursuant to this Section 10.5.  In the event that a Limited Partner fails to
pay any amounts owed to the Partnership pursuant to this Section 10.5
when due, the General Partner may, in its sole and absolute discretion, elect
to make the payment to the Partnership on behalf of such defaulting Limited
Partner, and in such event shall be deemed to have loaned such amount to such
defaulting Limited Partner and shall succeed to all rights and remedies of the
Partnership as against such defaulting Limited Partner.  Without limitation, in such event the General
Partner shall have the right to receive distributions that would otherwise be
distributable to such defaulting Limited Partner until such time as such loan,
together with all interest thereon, has been paid in full, and any such
distributions so received by the General Partner shall be treated as having
been distributed to the defaulting Limited Partner and immediately paid by the
defaulting Limited Partner to the General Partner in repayment of such loan.
Any amounts payable by a Limited Partner hereunder shall bear interest at the
lesser of (A) the base rate on corporate loans 


 


48

















 


at
large United States money center commercial banks, as published from time to
time in The Wall Street Journal, plus four (4) percentage points,
or (B) the maximum lawful rate of interest on such obligation, such
interest to accrue from the date such amount is due (i.e., fifteen (15) days
after demand) until such amount is paid in full.  Each Limited Partner shall take such actions
as the Partnership or the General Partner shall request in order to (i) perfect
or enforce the security interest created hereunder and (ii) cause any loan
arising hereunder to be treated as a real estate asset for purposes of Section 856(c)(4)(A) of
the Code.  Upon a Limited Partner’s
complete withdrawal from the Partnership, such Limited Partner shall be
required to restore funds to the Partnership to the extent that the cumulative
amount of taxes withheld from or paid on behalf of, or with respect to, such
Limited Partner exceeds the sum of such amounts (i) repaid to the
Partnership by such Limited Partner; (ii) withheld from distributions to
such Limited Partner; and (iii) paid by the General Partner on behalf of
such Limited Partner.


 


ARTICLE 11

TRANSFERS AND WITHDRAWALS


 


Section 11.1                                Transfer.


 


(a)                                  The term “transfer,” when
used in this Article 11 with respect to an OP Unit, shall be deemed
to refer to a transaction by which the General Partner purports to assign all
or any part of its General Partner Interest to another Person or by which a
Limited Partner purports to assign all or any part of its Limited Partner
Interest to another Person, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other disposition by law
or otherwise.  The term “transfer” when
used in this Article 11 does not include (i) any redemption of
Partnership Interests by the Partnership from a Limited Partner; (ii) any
acquisition of OP Units from a Limited Partner by the General Partner pursuant
to Section 8.6(b); or (iii) any distribution of OP Units by a
Limited Partner to its beneficial owners.


 


(b)                                 No Partnership Interest
shall be transferred, in whole or in part, except in accordance with the terms
and conditions set forth in this Article 11.  Any transfer or purported transfer of a
Partnership Interest not made in accordance with this Article 11
shall be null and void.


 


(c)                                  Notwithstanding the other
provisions of this Article 11, the General Partner may transfer all
of its Partnership Interests at any time to any Person that is, at the time of
such transfer, an Affiliate of the General Partner, including any “qualified
REIT subsidiary” (within the meaning of Code Section 856(i)(2)), without
the Consent of any Limited Partners. The provisions of Sections 11.2(c),
11.3, 11.4(a) and 11.5 hereof shall not apply to any
transfer permitted by this Section 11.1(c).


 


(d)                                 No part of the interest of a
Partner shall be subject to the claims of any creditor, to any spouse for
alimony or support, or to legal process, and may not be voluntarily or
involuntarily alienated or encumbered except as may be specifically provided
for in this Agreement.


 


49

















 


Section 11.2                                Transfer of General Partner’s
Partnership Interest.


 


(a)                                  The General Partner may not
transfer any of its General Partner Interest or withdraw as General Partner,
except as provided in Sections 11.l(c) or 11.2(b) hereof.


 


(b)                                 The General Partner and STAG
REIT may, with the Consent of the Limited Partners (excluding the Percentage
Interests held directly or indirectly by STAG REIT), engage in, or transfer all
of their respective Partnership Interest in connection with, (i) a merger,
consolidation or other combination of their assets with another entity, (ii) a
sale of all or substantially all of their assets, whether or not in the
ordinary course, or (iii) a reclassification, recapitalization or change
of any outstanding shares of STAG REIT’s stock or other outstanding equity
interests (each, a “Termination Transaction”).  In addition, the General Partner and STAG
REIT may, without the Consent of the Limited Partners, engage in, or transfer
all of their respective Partnership Interest in connection with, a Termination
Transaction if:


 


(i)                                     in connection with such
Termination Transaction, all of the Limited Partners will receive, or will have
the right to elect to receive, for each Common Unit an amount of cash,
securities or other property equal to the product of the Conversion Factor and
the greatest amount of cash, securities or other property paid to a holder of
one REIT Share in consideration of one REIT Share pursuant to the terms of such
Termination Transaction; provided, that if, in connection with such Termination
Transaction, a purchase, tender or exchange offer shall have been made to and
accepted by the holders of the outstanding REIT Shares, each holder of Common
Units shall receive, or shall have the right to elect to receive, the greatest
amount of cash, securities or other property which such holder of Common Units
would have received had it exercised its right to Redemption pursuant to Section 8.6
hereof and received REIT Shares in exchange for its Common Units immediately
prior to the expiration of such purchase, tender or exchange offer and had
thereupon accepted such purchase, tender or exchange offer and then such
Termination Transaction shall have been consummated; or


 


(ii)                                  all of the following
conditions are met:  (A) substantially
all of the assets directly or indirectly owned by the surviving entity are
owned directly or indirectly by the Partnership or another limited partnership
or limited liability company which is the survivor of a merger, consolidation
or combination of assets with the Partnership (in each case, the “Surviving
Partnership”); (B) the Persons who were Limited Partners immediately
prior to the consummation of such Termination Transaction own a percentage
interest of the Surviving Partnership based on the relative fair market value
of the net assets of the Partnership and the other net assets of the Surviving
Partnership immediately prior to the consummation of such transaction; (C) the
rights, preferences and privileges in the Surviving Partnership of such Limited
Partners are at least as favorable in all material respects as those in effect
immediately prior to the consummation of such transaction and as those
applicable to any other limited partners or non-managing members of the
Surviving Partnership; and (D) the rights of such Limited Partners include
at least one of the following: (1) the right to redeem their interests in
the Surviving Partnership for the consideration available to such Persons
pursuant to Section 11.2(b)(i) or (2) the right to redeem
their interests in the Surviving Partnership for cash on terms substantially
equivalent to those in effect with respect to their OP Units immediately prior
to the consummation of such transaction, or, if the ultimate controlling Person
of the Surviving Partnership has publicly traded common equity securities, such
common equity securities, with an exchange ratio based on the determination of
relative fair market value of such securities and the REIT Shares.


 


50

















 


(c)                                  Except as set forth in Section 11.1(c) or
11.2(b), the General Partner shall not withdraw from the Partnership and
shall not transfer all or any portion of its Partnership Interest (whether by
sale, disposition, statutory merger or consolidation, liquidation or otherwise).  Upon any transfer of the General Partner’s
Partnership Interest in accordance with the provisions of this Article 11,
the transferee shall become a successor General Partner for all purposes
herein, and shall be vested with the powers and rights of the transferor
General Partner, and shall be liable for all obligations and responsible for
all duties of the General Partner, once such transferee has executed such
instruments as may be necessary to effectuate such admission and to confirm the
agreement of such transferee to be bound by all the terms and provisions of
this Agreement with respect to the Partnership Interest so acquired. It is a
condition to any transfer by the General Partner otherwise permitted hereunder
that the transferee assumes, by operation of law or express agreement, all of
the obligations of the transferor General Partner under this Agreement with
respect to such transferred Partnership Interest, and such transfer shall
relieve the transferor General Partner of its obligations under this
Agreement.  In the event that the General
Partner withdraws from the Partnership, in violation of this Agreement or
otherwise, or otherwise dissolves or terminates, or upon an Event of Bankruptcy
of the General Partner, as described in Section 13.1(g) hereof,
the remaining Partners may agree in writing to continue the business of the
Partnership by selecting a successor General Partner in accordance with the
Act.


 


Section 11.3                                Transfer of Limited Partners’
Partnership Interests.


 


(a)                                  Except as provided in Section 11.3(b),
no Limited Partner shall transfer all or any portion of its Partnership
Interest to any transferee without the written consent of the General Partner,
which consent may be withheld in its sole and absolute discretion; provided,
however, that if a Limited Partner is subject to Incapacity, such
Incapacitated Limited Partner may transfer all or any portion of its
Partnership Interest.


 


(b)                                 Notwithstanding any other
provision of this Article 11 (but in all cases subject to the other
provisions of this Section 11.3), a Limited Partner may transfer
all or any portion of its Partnership Interest to any of its Affiliates and
such transferee shall be admitted as a Substituted Limited Partner, all without
obtaining the consent of the General Partner.


 


(c)                                  If a Limited Partner is
subject to Incapacity, the executor, administrator, trustee, committee,
guardian, conservator or receiver of such Limited Partner’s estate shall have
all of the rights of a Limited Partner, but not more rights than those enjoyed
by other Limited Partners, for the purpose of settling or managing the estate
and such power as the Incapacitated Limited Partner possessed to transfer all
or any part of his or its interest in the Partnership.  The Incapacity of a Limited Partner, in and
of itself, shall not dissolve or terminate the Partnership.


 


(d)                                 Without limiting the
generality of Section 11.3(a) hereof, the General Partner may
prohibit any transfer by a Limited Partner of its Partnership Interest if, in
the opinion of legal counsel to the Partnership, such transfer would require
filing of a registration statement under the Securities Act or would otherwise
violate any federal or state securities laws or regulations applicable to the
Partnership or the OP Units.


 


(e)                                  No transfer by a Limited
Partner of its OP Units may be made to any Person if (i) in the opinion of
legal counsel for the Partnership, it could reasonably be expected to 


 


51

















 


cause the Partnership to be treated as an
association taxable as a corporation or a publicly traded partnership within
the meaning of either Code Section 469(k)(2) or 7704(b) or to
fail to qualify for any safe harbor from treatment as a publicly traded
partnership; (ii) 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; (iii) such
transfer would cause the Partnership to become, with respect to any employee
benefit plan subject to Title I of ERISA or to Section 4975 of the Code, a
“party-in-interest” (as defined in Section 3(14) of ERISA) or a “disqualified
person” (as defined in Section 4975(e)(2) of the Code); (iv) such
transfer would, in the opinion of legal counsel for the Partnership, cause any
portion of the assets of the Partnership to constitute assets of any employee
benefit plan pursuant to Department of Labor Regulations Section 2510.3-101;
(v) such transfer would subject the Partnership to be regulated under the
Investment Company Act of 1940, as amended, the Investment Advisers Act of
1940, as amended, or the fiduciary responsibility provisions of ERISA; or (vi) such
transfer would cause the Partnership to be terminated for federal income tax
purposes pursuant to Code Section 708.


 


(f)                                    No transfer of any OP Units
may be made to a lender to the Partnership or any Person who is related (within
the meaning of Section 1.752-4(b) of the Regulations) to any lender
to the Partnership whose loan constitutes a Nonrecourse Liability, without the
consent of the General Partner, in its sole and absolute discretion.


 


(g)                                 The General Partner shall
keep a register for the Partnership on which the transfer, pledge or release of
OP Units shall be shown and pursuant to which entries shall be made to effect
all transfers, pledges or releases as required by the applicable sections of Article 8
of the Uniform Commercial Code, as amended, in effect in the Commonwealth of
Massachusetts and the State of Delaware; provided, however, that
if there is any conflict between such requirements, the provisions of the
Delaware Uniform Commercial Code shall govern. The General Partner shall (i) place
proper entries in such register clearly showing each transfer and each pledge
and grant of security interest and the transfer and assignment pursuant
thereto, such entries to be endorsed by the General Partner; and (ii) maintain
the register and make the register available for inspection by all of the
Partners and their pledgees at all times during the term of this
Agreement.  Nothing herein shall be
deemed a consent to any pledge or transfer otherwise prohibited under this
Agreement.


 


Section 11.4                                Substituted Limited Partners.


 


(a)                                  A transferee of the interest
of a Limited Partner pursuant to a transfer consented to by the General Partner
pursuant to Section 11.3(a) may be admitted as a Substituted
Limited Partner 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.  The General Partner’s failure or refusal to
permit a transferee of any such interests to become a Substituted Limited
Partner shall not give rise to any cause of action against the Partnership or
the General Partner.  A Person shall be admitted
to the Partnership as a Substituted Limited Partner only upon the
aforementioned consent of the General Partner and the furnishing to the General
Partner of (i) evidence of acceptance, in form and substance satisfactory
to the General Partner, of all of the terms and conditions of this Agreement,
including, without limitation, the power of attorney granted in Section 2.4
hereof; (ii) a counterpart signature page to this Agreement executed
by such Person; and (iii) such other documents and instruments as may be required
or advisable, in 


 


52

















 


the sole and absolute discretion of the General
Partner, to effect such Person’s admission as a Substituted Limited Partner.
The admission of any Person as a Substituted Limited Partner shall become
effective on the date upon which the name of such Person is recorded on the
books and records of the Partnership, following the consent of the General
Partner to such admission.


 


(b)                                 A transferee who has been
admitted as a Substituted Limited Partner in accordance with this Article 11
shall have all the rights and powers and be subject to all the restrictions and
liabilities of a Limited Partner under this Agreement.


 


(c)                                  Concurrently with, and as
evidence of, the admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name, address, number
of OP Units and Percentage Interest (as applicable) of such Substituted Limited
Partner and to eliminate or adjust, if necessary, the name, address and interest
of the predecessor of such Substituted Limited Partner.


 


Section 11.5                                Assignees.


 


If
the General Partner, in its sole and absolute discretion, does not consent to
the admission of any permitted transferee as a Substituted Limited Partner, as
described in Section 11.4, such transferee shall be considered an
Assignee for purposes of this Agreement. 
An Assignee shall be entitled to all the rights of an assignee of a
limited partnership interest under the Act, including the right to receive
distributions from the Partnership and the share of Net Income, Net Losses,
Recapture Income and any other items of gain, loss, deduction and credit of the
Partnership attributable to the Partnership Interest assigned to such
transferee, but shall not be deemed to be a holder of a Partnership Interest
for any other purpose under this Agreement, and shall not be entitled to
request a redemption of its interest or to vote such Partnership Interest in
any matter presented to the Limited Partners for a vote (such right to vote
fully remaining with the transferor Limited Partner). In the event any such
transferee desires to make a further assignment of any such Partnership
Interest, such transferee shall be subject to all of the provisions of this Article 11
to the same extent and in the same manner as any Limited Partner desiring to
make an assignment of his or its Partnership Interest.


 


Section 11.6                                General Provisions.


 


(a)                                  No Limited Partner may
withdraw from the Partnership other than as a result of a permitted transfer of
all of such Limited Partner’s Partnership Interest in accordance with this Article 11
or pursuant to redemption of all of its OP Units, or the acquisition thereof by
the General Partner, under Section 8.6.


 


(b)                                 Any Limited Partner who
shall transfer all of its Partnership Interest in a transfer permitted pursuant
to this Article 11 shall cease to be a Limited Partner upon the
admission of all Assignees of such Partnership Interest as Substituted Limited
Partners.  Similarly, any Limited Partner
who shall transfer all of its OP Units pursuant to a redemption of all of its
OP Units, or the acquisition thereof by the General Partner, under Section 8.6
shall cease to be a Limited Partner.


 


(c)                                  If any Partnership Interest
is transferred or assigned in compliance with the provisions of this Article 11
or redeemed or transferred pursuant to Section 8.6 on any day 


 


53

















 


other than the first day of a Partnership Year, then
Net Income, Net Losses, each item thereof and all other items attributable to
such interest for such Partnership Year shall be divided and allocated between
the transferor Partner and the transferee Partner by taking into account their
varying interests during the Partnership Year in accordance with Section 706(d) of
the Code, using the interim closing of the books method or another permissible
method selected by the General Partner it is sole and absolute discretion.  Solely for purposes of making such
allocations, unless the General Partner decides in its sole and absolute
discretion to use another method permitted under the Code, each of such items
for the calendar month in which a Transfer occurs shall be allocated to the
transferee Partner and none of such items for the calendar month in which a Transfer
or a Redemption occurs shall be allocated to the transferor Partner, or the
Tendering Party (as the case may be) if such Transfer occurs on or before the
fifteenth (15th) day of the month, otherwise such items shall be allocated to
the transferor.  All distributions of
Available Cash attributable to such Partnership Interest with respect to which
the Partnership Record Date is before the date of such transfer, assignment, or
redemption shall be made to the transferor Partner or the Redeeming Partner, as
the case may be, and in the case of a transfer or assignment other than a
redemption, all distributions of Available Cash thereafter attributable to such
Partnership Interest shall be made to the transferee Partner.


 


ARTICLE 12

ADMISSION OF PARTNERS


 


Section 12.1                                Admission of Successor
General Partner.


 


A
successor to all of the General Partner Interest pursuant to Section 11.1(c) or
11.2 hereof who is proposed to be admitted as a successor General
Partner shall be admitted to the Partnership as the General Partner, effective
immediately upon such transfer.  Upon any
such Transfer and the admission of any such transferee as a successor General
Partner in accordance with this Section 12.1, the transferor
General Partner shall be relieved of its obligations under this Agreement and
shall cease to be a general partner of the Partnership without any separate
Consent of the Limited Partners or the consent or approval of any other
Partners.  Any such transferee shall carry
on the business of the Partnership without dissolution.  In each case, the admission shall be subject
to the successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect the admission.  Concurrently with, and as evidence of, the
admission of a successor General Partner, the General Partner shall amend Exhibit A
and the books and records of the Partnership to reflect the name, address and
number and classes and/or series of Partnership Units of such successor General
Partner.  In the case of such admission
on any day other than the first day of a Partnership Year, all items
attributable to the General Partner Interest for such Partnership Year shall be
allocated between the transferring General Partner and such successor as
provided in Section 11.6(c) hereof.


 


Section 12.2                                Admission of Additional
Limited Partners.


 


(a)                                  A Person who makes a Capital
Contribution to the Partnership in accordance with this Agreement shall be
admitted to the Partnership as an Additional Limited Partner only upon
furnishing to the General Partner (i) evidence of acceptance, in form and
substance satisfactory to the General Partner, of all of the terms and
conditions of this 


 


54

















 


Agreement, including, without limitation, the power
of attorney granted in Section 2.4 hereof; (ii) a counterpart
signature page to this Agreement executed by such Person; and (iii) such
other documents or instruments as may be required in the discretion of the
General Partner in order to effect such Person’s admission as an Additional
Limited Partner.  Concurrently with, and
as evidence of, the admission of an Additional Limited Partner, the General
Partner shall amend Exhibit A and the books and records of the
Partnership to reflect the name, address and number and classes and/or series
of Partnership Units of such Additional Limited Partner.


 


(b)                                 Notwithstanding anything to
the contrary in this Section 12.2, no Person shall be admitted as
an Additional Limited Partner without the consent of the General Partner, which
consent may be given or withheld in the General Partner’s sole and absolute
discretion.  The admission of any Person
as an Additional Limited Partner shall become effective on the date upon which
the name of such Person is recorded on the books and records of the
Partnership, following the consent of the General Partner to such admission.


 


(c)                                  If any Additional Limited
Partner is admitted to the Partnership on any day other than the first day of a
Partnership Year, then Net Income, Net Losses, each item thereof and all other
items allocable among Partners and Assignees for such Partnership Year shall be
allocated among such Additional Limited Partner and all other Partners and
Assignees by taking into account their varying interests during the Partnership
Year in accordance with Section 706(d) of the Code, using the interim
closing of the books method. All distributions of Available Cash with respect
to which the Partnership Record Date is before the date of such admission shall
be made solely to Partners and Assignees, other than such Additional Limited
Partner, and all distributions of Available Cash thereafter shall be made to
all of the Partners and Assignees, including such Additional Limited Partner.


 


Section 12.3                                Amendment of Agreement and
Certificate of Limited Partnership.


 


For
the admission to the Partnership of any Partner, the General Partner shall take
all steps necessary and appropriate under the Act to amend the records of the
Partnership and, if necessary, to prepare as soon as practical an amendment of
this Agreement (including an amendment of Exhibit A) and, if
required by law, shall prepare and file an amendment to the Certificate and may
for this purpose exercise the power of attorney granted pursuant to Section 2.4
hereof.


 


Section 12.4                                Limit on Number of Partners.  Unless otherwise permitted by the General
Partner in its sole and absolute discretion, no Person shall be admitted to the
Partnership as an Additional Limited Partner if the effect of such admission
would be to cause the Partnership to have a number of Partners that would cause
the Partnership to become a reporting company under the Exchange Act.


 


ARTICLE 13

DISSOLUTION, LIQUIDATION AND TERMINATION


 


Section 13.1                                Dissolution.


 


The
Partnership shall not be dissolved by the admission of Substituted Limited
Partners or Additional Limited Partners or by the admission of a successor
General Partner in accordance 


 


55

















 


with
the terms of this Agreement.  Upon the
withdrawal of the General Partner, any successor General Partner shall continue
the business of the Partnership without dissolution.  The Partnership shall dissolve, and its
affairs shall be wound up, only upon the first to occur of any of the following
(“Liquidating Events”):


 


(a)                                  the redemption (or
acquisition by the General Partner) of all OP Units other than OP Units held by
the General Partner;


 


(b)                                 an event of withdrawal of
the General Partner, as defined in the Act, other than an event of bankruptcy
as defined in the Act, unless; (i) at the time of the occurrence of such
event there is at least one remaining general partner of the Partnership who is
hereby authorized to and does carry on the business of the Partnership; or (ii) within
ninety (90) days after such event of withdrawal not less than a majority of the
Percentage Interests of the remaining Partners (or such greater Percentage
Interest as may be required by the Act and determined in accordance with the
Act), determined, in case the withdrawing General Partner continues as a
Limited Partner, by both excluding and including Limited Partner Interests
continuing to be held by the withdrawing General Partner, agrees in writing to
continue the business of the Partnership and to the appointment, effective as
of the date of withdrawal, of a successor General Partner;


 


(c)                                  an election to dissolve the
Partnership made by the General Partner in its sole and absolute discretion;


 


(d)                                 entry of a decree of
judicial dissolution of the Partnership pursuant to the provisions of the Act;


 


(e)                                  the occurrence of a
Terminating Capital Transaction; or


 


(f)                                    a final and non-appealable
judgment is entered by a court of competent jurisdiction ruling that the
General Partner is bankrupt or insolvent, or a final and non-appealable order
for relief is entered by a court with appropriate jurisdiction against the
General Partner, in each case under any federal or state bankruptcy or insolvency
laws as now or hereafter in effect (hereinafter referred to as an “Event of
Bankruptcy,” and such term as used herein is intended and shall be deemed
to supersede and replace the events of withdrawal described in Section 17-402(a)(4) and
(5) of the Act), unless prior to the entry of such order or judgment a
majority of the remaining Partners by Percentage Interest agree in writing to
continue the business of the Partnership and to the appointment, effective as
of a date prior to the date of such order or judgment, of a substitute General
Partner.


 


Section 13.2                                Winding Up.


 


(a)                                  Upon the occurrence of a
Liquidating Event, the Partnership shall continue solely for the purposes of
winding up its affairs in an orderly manner, liquidating its assets, and
satisfying the claims of its creditors and Partners.  No Partner shall take any action that is
inconsistent with, or not necessary to or appropriate for, the winding up of
the Partnership’s business and affairs. 
The General Partner, or, in the event there is no remaining General
Partner, any Person elected by a majority of the Percentage Interests of the
Limited Partners (the General Partner or such other Person being referred to
herein as the “Liquidator”), shall be responsible for overseeing the
winding up and dissolution of the Partnership and shall take full account of
the 


 


56

















 


Partnership’s liabilities and property and the
Partnership property shall be liquidated as promptly as is consistent with
obtaining the fair value thereof, and the proceeds therefrom (which may, to the
extent determined by the General Partner, include REIT Shares) shall be applied
and distributed in the following order:


 


(i)                                     First, in satisfaction of
all of the Partnership’s debts and liabilities to creditors other than the
Partners (whether by payment or the making of reasonable provision for payment
thereof);


 


(ii)                                  Second, to the payment and
discharge of all of the Partnership’s debts and liabilities to the General
Partner;


 


(iii)                               Third, to the payment and
discharge of all of the Partnership’s debts and liabilities to the other
Partners; and


 


(iv)                              The balance, if any, to the
General Partner and Limited Partners in accordance with their Capital Accounts,
after giving effect to all contributions, distributions, and allocations for
all periods.


 


The
General Partner shall not receive any additional compensation for any services
performed pursuant to this Article 13.


 


(b)                                 Notwithstanding the
provisions of Section 13.2(a) hereof which require liquidation
of the assets of the Partnership, but subject to the order of priorities set
forth therein, if prior to or upon dissolution of the Partnership the
Liquidator determines that an immediate sale of part or all of the Partnership’s
assets would be impractical or would cause undue loss to the Partners, the
Liquidator may, in its sole and absolute discretion, defer for a reasonable
time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors)
and/or distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2(a) hereof,
undivided interests in such Partnership assets as the Liquidator deems not
suitable for liquidation. Any such distributions in kind shall be made only if,
in the good faith judgment of the Liquidator, such distributions in kind are in
the best interest of the Partners, and shall be subject to such conditions
relating to the disposition and management of such properties as the Liquidator
deems reasonable and equitable and to any agreements governing the operation of
such properties at such time.  The
Liquidator shall determine the fair market value of any property distributed in
kind using such reasonable method of valuation as it may adopt.


 


(c)                                  In the discretion of the
Liquidator, a pro rata portion of the distributions that would otherwise be
made to the General Partner and Limited Partners pursuant to this Article 13
may be:


 


(i)                                     distributed to a trust established
for the benefit of the General Partner and Limited Partners for the purposes of
liquidating Partnership assets, collecting amounts owed to the Partnership, and
paying any contingent or unforeseen liabilities or obligations of the
Partnership or the General Partner arising out of or in connection with the
Partnership.  The assets of any such
trust shall be distributed to the General Partner and Limited Partners from
time to time, in the reasonable discretion of the Liquidator, in the same
proportions 


 


57

















 


as the amount distributed to such trust by the
Partnership would otherwise have been distributed to the General Partner and
Limited Partners pursuant to this Agreement; or


 


(ii)                                  withheld or escrowed to
provide a reasonable reserve for Partnership liabilities (contingent or
otherwise) and to reflect the unrealized portion of any installment obligations
owed to the Partnership; provided, that such withheld or escrowed
amounts shall be distributed to the General Partner and Limited Partners in the
manner and order of priority set forth in Section 13.2(a) as
soon as practicable.


 


Section 13.3                                Compliance with Timing
Requirements of Regulations.


 


In
the event the Partnership is “liquidated” within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g),
distributions shall be made pursuant to this Article 13 to the
General Partner and Limited Partners who have positive Capital Accounts in
compliance with Regulations Section 1.704-l(b)(2)(ii)(b)(2).  If any Partner has a deficit balance in his
or its Capital Account (after giving effect to all contributions, distributions
and allocations for all taxable years, including the year during which such
liquidation occurs), such Partner shall have no obligation to make any
contribution to the capital of the Partnership with respect to such deficit,
and such deficit shall not be considered a debt owed to the Partnership or to
any other Person for any purpose whatsoever.


 


Section 13.4                                Deemed Contribution and
Distribution.


 


Notwithstanding
any other provision of this Article 13, in the event the
Partnership is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g),
but no Liquidating Event has occurred, the Partnership’s property shall not be
liquidated, the Partnership’s liabilities shall not be paid or discharged, and
the Partnership’s affairs shall not be wound up.  Instead, for federal income tax purposes and
for purposes of maintaining Capital Accounts pursuant to Exhibit B
hereto, the Partnership shall be deemed to have contributed all Partnership
property and liabilities to a new limited partnership in exchange for an
interest in such new limited partnership and, immediately thereafter, the
Partnership will be deemed to liquidate by distributing interests in the new
limited partnership to the Partners.


 


Section 13.5                                Rights of Limited Partners.


 


Except
as otherwise provided in this Agreement, each Limited Partner shall look solely
to the assets of the Partnership for the return of its Capital Contributions
and shall have no right or power to demand or receive property other than cash
from the Partnership.  Except as
otherwise provided in this Agreement, no Limited Partner shall have priority
over any other Partner as to the return of its Capital Contributions,
distributions, or allocations.


 


Section 13.6                                Notice of Dissolution.


 


In
the event a Liquidating Event occurs or an event occurs that would, but for the
provisions of an election by one or more Partners pursuant to Section 13.1,
result in a dissolution of the Partnership, the General Partner shall, within
thirty (30) days thereafter, provide written notice thereof to each of the
Partners.


 


58














 


Section 13.7                                Termination of
Partnership and Cancellation of Certificate of Limited Partnership.


 


Upon
the completion of the winding up of the Partnership and liquidation of its
assets, as provided in Section 13.2 hereof, the Partnership shall
be terminated by filing a certificate of cancellation with the Secretary of
State of the State of Delaware, canceling all qualifications of the Partnership
as a foreign limited partnership in jurisdictions other than the State of
Delaware and taking such other actions as may be necessary to terminate the
Partnership.


 


Section 13.8                                Reasonable Time
for Winding Up.


 


A
reasonable time shall be allowed for the orderly winding-up of the business and
affairs of the Partnership and the liquidation of its assets pursuant to Section 13.2
hereof, in order to minimize any losses otherwise attendant upon such winding
up, and the provisions of this Agreement shall remain in effect among the
Partners during the period of liquidation.


 


Section 13.9                                Waiver of
Partition.


 


Each
Partner hereby waives any right to partition of the Partnership property.


 


ARTICLE 14

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS


 


Section 14.1                                Amendment of
Partnership Agreement.


 


(a)                                  Amendments to
this Agreement may be proposed by the General Partner or by Limited Partners
holding twenty-five percent (25%) or more of the Partnership Interests.  Following such proposal, the General Partner
shall submit any proposed amendment to the Limited Partners.  The General Partner shall seek the written
vote of the Partners on the proposed amendment or shall call a meeting to vote
thereon and to transact any other business that it may deem appropriate.  For purposes of obtaining a written vote, the
General Partner may require a response within a reasonable specified time, but not
less than fifteen (15) days, and failure to respond in such time period shall
constitute a vote which is consistent with the General Partner’s recommendation
with respect to the proposal.  Except as
otherwise provided in this Agreement, a proposed amendment shall be adopted and
be effective as an amendment hereto if it is approved by the General Partner
and it receives the Consent of the Partners holding a majority of the
Percentage Interests of the Partners.


 


(b)                                 Notwithstanding
Section 14.1(a), the General Partner shall have the power, without
the consent of the Limited Partners, to amend this Agreement as may be required
to facilitate or implement any of the following purposes:


 


(i)                                     to add to the
obligations of the General Partner or surrender any right or power granted to
the General Partner or any Affiliate of the General Partner for the benefit of
the Limited Partners;


 


(ii)                                  to reflect the
admission, substitution, termination, or withdrawal of Partners in accordance
with this Agreement;


 


59

















 


(iii)                               to set forth
the designations, rights (including redemption rights that differ from those
specified in Section 8.6), powers, duties, and preferences of OP
Units or other Partnership Interests issued pursuant to Section 4.2(a) hereof;


 


(iv)                              to reflect a
change that does not adversely affect the rights of the Limited Partners
hereunder in any material respect, or to cure any ambiguity, correct or
supplement any provision in this Agreement not inconsistent with law or with
other provisions, or make other changes with respect to matters arising under
this Agreement that will not be inconsistent with law or with the provisions of
this Agreement;


 


(v)                                 to modify the
manner in which capital accounts are computed;


 


(vi)                              to include
provisions referenced in future federal income tax guidance relating to
compensatory partnership interests that the General Partner believes are
reasonably necessary in respect of such guidance, including as provided in Section 4.6(c);
and


 


(vii)                           to satisfy any
requirements, conditions, or guidelines contained in any order, directive,
opinion, ruling or regulation of a federal or state agency or contained in
federal or state law.


 


The
General Partner shall provide notice to the Limited Partners when any action
under this Section 14.1(b) is taken.


 


(c)                                  Notwithstanding
Section 14.1(a) and 14.1(b) hereof, this Agreement
shall not be amended without the consent of each Partner (or Assignee who is a
bona fide financial institution that loans money or otherwise extends credit to
a Limited Partner) whose rights hereunder are adversely affected if such
amendment would (i) convert a Limited Partner’s interest in the
Partnership into a General Partner Interest; (ii) modify the limited
liability of a Limited Partner; (iii) alter rights of such Partner to
receive distributions pursuant to Article 5 or Article 13,
or the allocations specified in Article 6 (except as permitted
pursuant to Section 4.2 and Section 14.1(b)(iii) hereof)
in a manner adverse to such Partner; (iv) materially alter or modify the
Redemption Right and REIT Shares Amount as set forth in Section 8.6,
and the related definitions; (v) amend this Section 14.1(c).


 


(d)                                 Notwithstanding
Section 14.1(a) or Section 14.1(b) hereof,
the General Partner shall not amend Sections 4.2, 4.3, 7.3,
7.5, 7.6, 7.8, 8.5, 11.2 or 14.2
without the Consent of the Limited Partners (excluding the Percentage Interests
held directly or indirectly by STAG REIT).


 


Section 14.2                                Meetings of the
Partners.


 


(a)                                  Meetings of the
Partners may be called by the General Partner and shall be called upon the
receipt by the General Partner of a written request by Limited Partners holding
twenty percent (20%) or more of the Partnership Interests.  The request shall state the nature of the
business to be transacted.  Notice of any
such meeting shall be given to all Partners not less than seven (7) days
nor more than thirty (30) days prior to the date of such meeting.  Partners may vote in person or by proxy at
such meeting.  Whenever the vote or “Consent
of the Limited Partners” is permitted or required under this Agreement, such
vote or Consent may be given at a 


 


60

















 


meeting of the Partners or may be given in
accordance with the procedure prescribed in Section 14.2(b) hereof.  Except as otherwise expressly provided in
this Agreement, the Consent of holders of a majority of the Percentage
Interests held by Limited Partners shall be deemed “Consent” and “Consent of
the Limited Partners”.


 


(b)                                 Any action
required or permitted to be taken at a meeting of the Partners may be taken
without a meeting if a written consent setting forth the action so taken is
signed by a majority of the Percentage Interests of the Partners (or such other
percentage as is expressly required by this Agreement).  Such consent may be in one instrument or in
several instruments, and shall have the same force and effect as a vote of a
majority of the Percentage Interests of the Partners (or such other percentage
as is expressly required by this Agreement). 
Such consent shall be filed with the General Partner.  An action so taken shall be deemed to have
been taken at a meeting held on the effective date so certified.


 


(c)                                  Each Limited
Partner may authorize any Person or Persons to act for him by proxy on all
matters in which a Limited Partner is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting.  Every proxy must be signed by the Limited
Partner or his or its attorney-in-fact. 
No proxy shall be valid after the expiration of eleven (11) months from
the date thereof unless otherwise provided in the proxy.  Every proxy shall be revocable at the
pleasure of the Limited Partner executing it, such revocation to be effective
upon the Partnership’s receipt of written notice of such revocation from the
Limited Partner executing such proxy.


 


(d)                                 The General
Partner may set, in advance, a record date for the purpose of determining the
Partners (i) entitled to consent to any action, (ii) entitled to
receive notice of or vote at any meeting of the Partners or (iii) in order
to make a determination of Partners for any other proper purpose.  Such date, in any case, shall not be prior to
the close of business on the day the record date is fixed and shall be not more
than ninety (90) days and, in the case of a meeting of the Partners, not less
than five (5) days, before the date on which the meeting is to be
held.  If no record date is fixed, the
record date for the determination of Partners entitled to notice of or to vote
at a meeting of the Partners shall be at the close of business on the day on
which the notice of the meeting is sent, and the record date for any other
determination of Partners shall be the effective date of such Partner action,
distribution or other event.  When a
determination of the Partners entitled to vote at any meeting of the Partners
has been made as provided in this section, such determination shall apply to
any adjournment thereof.


 


(e)                                  Each meeting of
the Partners shall be conducted by the General Partner or such other Person as
the General Partner may appoint pursuant to such rules for the conduct of
the meeting as the General Partner or such other Person deems appropriate.  Without limitation, meetings of Partners may
be conducted in the same manner as meetings of the stockholders of STAG REIT
and may be held at the same time, and as part of, meetings of the stockholders
of STAG REIT.


 


(f)                                    On matters on
which Limited Partners are entitled to vote, each Limited Partner holding OP
Units shall have a vote equal to the number of OP Units held.


 


61

















 


ARTICLE 15

GENERAL PROVISIONS


 


Section 15.1                                Addresses and
Notice.


 


Any
notice, demand, request or report required or permitted to be given or made to
a Partner or Assignee under this Agreement shall be in writing and shall be
deemed given or made when delivered in person or when sent by first class
United States mail or by other means of written or electronic communication
(including by telecopy, facsimile, electronic mail or commercial courier
service) to such Partner or Assignee at the address set forth in Exhibit A
or such other address of which such Partner shall notify the General Partner in
writing.


 


Section 15.2                                Titles and
Captions.


 


All
article or section titles or captions in this Agreement are for convenience
only.  They shall not be deemed part of
this Agreement and in no way define, limit, extend or describe the scope or
intent of any provisions hereof.  Except
as specifically provided otherwise, references to “Articles” and “Sections” are
to Articles and Sections of this Agreement.


 


Section 15.3                                Pronouns and
Plurals.


 


Whenever
the context may require, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns, pronouns and verbs shall include the plural and vice versa.


 


Section 15.4                                Further Action.


 


The
parties shall execute and deliver all documents, provide all information and
take or refrain from taking action as may be necessary or appropriate to
achieve the purposes of this Agreement.


 


Section 15.5                                Binding Effect.


 


This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their heirs, executors, administrators, successors, legal representatives
and permitted assigns.


 


Section 15.6                                Creditors.


 


Other
than as expressly set forth herein with respect to the Indemnitees, none of the
provisions of this Agreement shall be for the benefit of, or shall be
enforceable by, any creditor of the Partnership.


 


Section 15.7                                Waiver.


 


(a)                                  No failure by
any party to insist upon the strict performance of any covenant, duty,
agreement or condition of this Agreement or to exercise any right or remedy
consequent upon a breach thereof shall constitute a waiver of any such breach
or any other covenant, duty, agreement or condition.


 


62

















 


(b)                                 The
restrictions, conditions and other limitations on the rights and benefits of
the Limited Partners contained in this Agreement, and the duties, covenants and
other requirements of performance or notice by the Limited Partners, are for
the benefit of the Partnership and, except for an obligation to pay money to
the Partnership, may be waived or relinquished by the General Partner, in its
sole and absolute discretion, on behalf of the Partnership in one or more
instances from time to time and at any time; provided, however,
that any such waiver or relinquishment may not be made if it would have the effect
of (i) creating liability for any other Limited Partner, (ii) causing
the Partnership to cease to qualify as a limited partnership,
(iii) reducing the amount of cash otherwise distributable to the Limited
Partners (other than any such reduction that affects all of the Limited
Partners holding the same class or series of Partnership Units on a uniform or
pro rata basis, if approved by a majority of the Limited Partners holding such
class or series of OP Units), (iv) resulting in the classification of the
Partnership as an association or publicly traded partnership taxable as a
corporation or causing the Partnership to fail to qualify for a safe harbor
necessary for the Partnership to avoid being treated as a publicly traded
partnership taxable as a corporation or (v) violating the Securities Act,
the Exchange Act or any state “blue sky” or other securities laws; and provided,
further, that any waiver relating to compliance with the ownership
limits or other restrictions in the Charter shall be made and shall be
effective only as provided in the Charter.


 


Section 15.8                                Counterparts.


 


This
Agreement may be executed in counterparts, all of which together shall
constitute one agreement binding on all of the parties hereto, notwithstanding
that all such parties are not signatories to the original or the same
counterpart.  Each party shall become
bound by this Agreement immediately upon affixing his or its signature hereto.


 


Section 15.9                                Applicable Law.


 


This
Agreement shall be construed and enforced in accordance with and governed by
the laws of the State of Delaware, without regard to the principles of conflict
of laws.


 


Section 15.10                          Invalidity of
Provisions.


 


If
any provision of this Agreement is or becomes invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.


 


Section 15.11                          Entire
Agreement.


 


This
Agreement contains the entire understanding and agreement among the Partners
with respect to the subject matter hereof and supersedes the Original Agreement
and any other prior written or oral understandings or agreements among them
with respect thereto.


 


Section 15.12                          No Rights as
Stockholders of STAG REIT.


 


Nothing
contained in this Agreement shall be construed as conferring upon the holders
of OP Units any rights whatsoever as stockholders of STAG REIT, including,
without limitation, any right to receive dividends or other distributions made
to stockholders of STAG REIT or to 


 


63

















 


vote
or to consent or receive notice as stockholders in respect of any meeting of
the stockholders of STAG REIT for the election of directors or any other
matter.


 


[signature
page follows]


 


64














 


IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.


 


	
   

  	
  GENERAL
  PARTNER:

  
	
   

  	
   

  
	
   

  	
  STAG
  Industrial GP, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  STAG
  Industrial, Inc., its member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INITIAL
  LIMITED PARTNERS:

  
	
   

  	
   

  
	
   

  	
  STAG
  Industrial, Inc., a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STAG
  Investments III, LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  STAG
  Manager III, LLC, its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Benjamin
  S. Butcher

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Manager

  



 


Amended
and Restated Agreement of Limited Partnership of


STAG
Industrial Operating Partnership, L.P.


 

















 


STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.


 


Limited Partner Signature Page


 


The
undersigned, desiring to become a Limited Partner of STAG Industrial Operating
Partnership, L.P., a Delaware limited partnership (the “Partnership”),
hereby becomes a party to the Amended and Restated Agreement of Limited
Partnership, as amended and in effect from time to time (the “Partnership
Agreement”), to which STAG Industrial GP, LLC, a Delaware limited liability
company, is a party as the general partner and to which STAG Industrial, Inc.,
a Maryland corporation, and STAG Investments III, LLC, a Delaware limited
liability company, are parties as limited partners.  The undersigned hereby agrees to all of the
provisions of the Partnership Agreement and agrees that this signature page may
be attached to any counterpart copy of the Partnership Agreement.


 


 


	
   

  	
  STAG
  GI Investments, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  STAG
  Capital Partners, LLC, its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Date:
                  ,
  2010

  	
   

  	
   

  



 


Amended
and Restated Agreement of Limited Partnership of


STAG
Industrial Operating Partnership, L.P.


 

















 


STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.


 


Limited Partner Signature Page


 


The
undersigned, desiring to become a Limited Partner of STAG Industrial Operating
Partnership, L.P., a Delaware limited partnership (the “Partnership”),
hereby becomes a party to the Amended and Restated Agreement of Limited
Partnership, as amended and in effect from time to time (the “Partnership
Agreement”), to which STAG Industrial GP, LLC, a Delaware limited liability
company, is a party as the general partner and to which STAG Industrial, Inc.,
a Maryland corporation, and STAG Investments III, LLC, a Delaware limited
liability company, are parties as limited partners.  The undersigned hereby agrees to all of the
provisions of the Partnership Agreement and agrees that this signature page may
be attached to any counterpart copy of the Partnership Agreement.


 


	
   

  	
  STAG
  Investments IV, LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  STAG
  Manager IV, LLC, its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Date:
                  ,
  2010

  	
   

  	
   

  



 


Amended
and Restated Agreement of Limited Partnership of


STAG
Industrial Operating Partnership, L.P.


 

















 


STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.


 


Limited Partner Signature Page


 


The
undersigned, desiring to become a Limited Partner of STAG Industrial Operating
Partnership, L.P., a Delaware limited partnership (the “Partnership”),
hereby becomes a party to the Amended and Restated Agreement of Limited
Partnership, as amended and in effect from time to time (the “Partnership
Agreement”), to which STAG Industrial GP, LLC, a Delaware limited liability
company, is a party as the general partner and to which STAG Industrial, Inc.,
a Maryland corporation, and STAG Investments III, LLC, a Delaware limited
liability company, are parties as limited partners.  The undersigned hereby agrees to all of the
provisions of the Partnership Agreement and agrees that this signature page may
be attached to any counterpart copy of the Partnership Agreement.


 


	
   

  	
  Net
  Lease Aggregation Funds, LLC, a Massachusetts limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Benjamin
  S. Butcher

  
	
   

  	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:
                  ,
  2010

  	
   

  	
   

  	
   

  



 


Amended
and Restated Agreement of Limited Partnership of


STAG Industrial Operating
Partnership, L.P.


 

















 


STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.


 


Limited Partner Signature Page


 


The
undersigned, desiring to become a Limited Partner of STAG Industrial Operating
Partnership, L.P., a Delaware limited partnership (the “Partnership”),
hereby becomes a party to the Amended and Restated Agreement of Limited
Partnership, as amended and in effect from time to time (the “Partnership
Agreement”), to which STAG Industrial GP, LLC, a Delaware limited liability
company, is a party as the general partner and to which STAG Industrial, Inc.,
a Maryland corporation, and STAG Investments III, LLC, a Delaware limited
liability company, are parties as limited partners.  The undersigned hereby agrees to all of the
provisions of the Partnership Agreement and agrees that this signature page may
be attached to any counterpart copy of the Partnership Agreement.


 


	
   

  	
  BSB
  STAG III, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Benjamin S. Butcher

  
	
   

  	
   

  	
  Title:  Manager

  
	
   

  	
   

  	
   

  
	
  Date:
                  ,
  2010

  	
   

  	
   

  



 


Amended
and Restated Agreement of Limited Partnership of


STAG Industrial Operating Partnership, L.P.


 

















 


STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.


 


Limited Partner Signature Page


 


The
undersigned, desiring to become a Limited Partner of STAG Industrial Operating
Partnership, L.P., a Delaware limited partnership (the “Partnership”),
hereby becomes a party to the Amended and Restated Agreement of Limited
Partnership, as amended and in effect from time to time (the “Partnership
Agreement”), to which STAG Industrial GP, LLC, a Delaware limited liability
company, is a party as the general partner and to which STAG Industrial, Inc.,
a Maryland corporation, and STAG Investments III, LLC, a Delaware limited
liability company, are parties as limited partners.  The undersigned hereby agrees to all of the
provisions of the Partnership Agreement and agrees that this signature page may
be attached to any counterpart copy of the Partnership Agreement.


 


	
   

  	
  STAG
  III Employees, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  BSB
  STAG III, LLC, its Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:
  Benjamin S. Butcher

  
	
   

  	
   

  	
   

  	
  Title:
  Manager

  
	
   

  	
   

  	
   

  
	
  Date:
                  ,
  2010

  	
   

  	
   

  



 


Amended
and Restated Agreement of Limited Partnership of


STAG Industrial Operating Partnership, L.P.


 

















 


STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.


 


Limited Partner Signature Page


 


The
undersigned, desiring to become a Limited Partner of STAG Industrial Operating
Partnership, L.P., a Delaware limited partnership (the “Partnership”),
hereby becomes a party to the Amended and Restated Agreement of Limited
Partnership, as amended and in effect from time to time (the “Partnership
Agreement”), to which STAG Industrial GP, LLC, a Delaware limited liability
company, is a party as the general partner and to which STAG Industrial, Inc.,
a Maryland corporation, and STAG Investments III, LLC, a Delaware limited
liability company, are parties as limited partners.  The undersigned hereby agrees to all of the
provisions of the Partnership Agreement and agrees that this signature page may
be attached to any counterpart copy of the Partnership Agreement.


 


 


	
   

  	
   

  
	
   

  	
  Benjamin S. Butcher

  
	
   

  	
   

  
	
  Date:
                  ,
  2010

  	
   

  



 


Amended
and Restated Agreement of Limited Partnership of


STAG Industrial Operating Partnership, L.P.


 

















 


STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.


 


Limited Partner Signature Page


 


The
undersigned, desiring to become a Limited Partner of STAG Industrial Operating
Partnership, L.P., a Delaware limited partnership (the “Partnership”),
hereby becomes a party to the Amended and Restated Agreement of Limited
Partnership, as amended and in effect from time to time (the “Partnership
Agreement”), to which STAG Industrial GP, LLC, a Delaware limited liability
company, is a party as the general partner and to which STAG Industrial, Inc.,
a Maryland corporation, and STAG Investments III, LLC, a Delaware limited
liability company, are parties as limited partners.  The undersigned hereby agrees to all of the
provisions of the Partnership Agreement and agrees that this signature page may
be attached to any counterpart copy of the Partnership Agreement.


 


	
   

  	
  Innovative
  Promotions, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  Date:
                  ,
  2010

  	
   

  



 


Amended
and Restated Agreement of Limited Partnership of


STAG Industrial Operating Partnership, L.P.


 

















 


STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.


 


Limited Partner Signature Page


 


The
undersigned, desiring to become a Limited Partner of STAG Industrial Operating
Partnership, L.P., a Delaware limited partnership (the “Partnership”),
hereby becomes a party to the Amended and Restated Agreement of Limited
Partnership, as amended and in effect from time to time (the “Partnership
Agreement”), to which STAG Industrial GP, LLC, a Delaware limited liability
company, is a party as the general partner and to which STAG Industrial, Inc.,
a Maryland corporation, and STAG Investments III, LLC, a Delaware limited
liability company, are parties as limited partners.  The undersigned hereby agrees to all of the
provisions of the Partnership Agreement and agrees that this signature page may
be attached to any counterpart copy of the Partnership Agreement.


 


	
   

  	
  NED
  STAG III Residual LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  Stephen R. Karp

  
	
   

  	
   

  	
  Title:
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  Stephen S. Fischman

  
	
   

  	
   

  	
  Title:
  Manager

  
	
   

  	
   

  	
   

  
	
  Date:
                  ,
  2010

  	
   

  	
   

  



 


Amended
and Restated Agreement of Limited Partnership of


STAG Industrial Operating Partnership, L.P.


 

















 


STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.


 


Limited Partner Signature Page


 


The
undersigned, desiring to become a Limited Partner of STAG Industrial Operating
Partnership, L.P., a Delaware limited partnership (the “Partnership”),
hereby becomes a party to the Amended and Restated Agreement of Limited
Partnership, as amended and in effect from time to time (the “Partnership
Agreement”), to which STAG Industrial GP, LLC, a Delaware limited liability
company, is a party as the general partner and to which STAG Industrial, Inc.,
a Maryland corporation, and STAG Investments III, LLC, a Delaware limited
liability company, are parties as limited partners.  The undersigned hereby agrees to all of the
provisions of the Partnership Agreement and agrees that this signature page may
be attached to any counterpart copy of the Partnership Agreement.


 


	
   

  	
  Roseview
  Capital Partners, LLC, a Massachusetts limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  Date:
                  ,
  2010

  	
   

  



 


Amended
and Restated Agreement of Limited Partnership of


STAG Industrial Operating Partnership, L.P.


 

















 


STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.


 


Limited Partner Signature Page


 


The
undersigned, desiring to become a Limited Partner of STAG Industrial Operating
Partnership, L.P., a Delaware limited partnership (the “Partnership”),
hereby becomes a party to the Amended and Restated Agreement of Limited
Partnership, as amended and in effect from time to time (the “Partnership
Agreement”), to which STAG Industrial GP, LLC, a Delaware limited liability
company, is a party as the general partner and to which STAG Industrial, Inc.,
a Maryland corporation, and STAG Investments III, LLC, a Delaware limited
liability company, are parties as limited partners.  The undersigned hereby agrees to all of the
provisions of the Partnership Agreement and agrees that this signature page may
be attached to any counterpart copy of the Partnership Agreement.


 


 


	
   

  	
   

  
	
   

  	
  Gregory
  W. Sullivan

  
	
   

  	
   

  
	
  Date:
                  ,
  2010

  	
   

  



 


Amended
and Restated Agreement of Limited Partnership of


STAG
Industrial Operating Partnership, L.P.


 






 










 


Exhibit A


 


PARTNERS’
CONTRIBUTIONS AND PARTNERSHIP INTERESTS


 


[to
be attached]


 


A-1

















 


Exhibit B


 


CAPITAL
ACCOUNT MAINTENANCE


 


1.                                       Capital
Accounts of the Partners


 


(a)                                  The Partnership
shall maintain for each Partner a separate Capital Account in accordance with
the rules of Regulations Section 1.704-l(b)(2)(iv).  Such Capital Account shall be increased by (i) the
amount of all Capital Contributions and any other deemed contributions made by
such Partner to the Partnership pursuant to this Agreement; and (ii) all
items of Partnership income and gain (including income and gain exempt from
tax) computed in accordance with Section l(b) herein and
allocated to such Partner pursuant to Section 6.1 of the Agreement and
Exhibit C hereof, and decreased by (x) the amount of cash or
Agreed Value of all actual and deemed distributions of cash or property made to
such Partner pursuant to the Agreement, and (y) all items of Partnership
deduction and loss computed in accordance with Section l(b) herein
and allocated to such Partner pursuant to Section 6.1 of the
Agreement and Exhibit C hereof.


 


(b)                                 For purposes of
computing the amount of any item of income, gain, deduction or loss to be
reflected in the Partners’ Capital Accounts, unless otherwise specified in the
Agreement, the determination, recognition and classification of any such item
shall be the same as its determination, recognition and classification for
federal income tax purposes determined in accordance with Section 703(a) of
the Code (for this purpose all items of income, gain, loss or deduction
required to be stated separately pursuant to Section 703(a)(1) of the
Code shall be included in taxable income or loss), with the following
adjustments:


 


(i)                                     Except as otherwise
provided in Regulations Section 1.704-l(b)(2)(iv)(m), the computation of
all items of income, gain, loss and deduction shall be made without regard to
any election under Section 754 of the Code which may be made by the
Partnership; provided, that the amounts of any adjustments to the
adjusted bases of the assets of the Partnership made pursuant to Section 734
of the Code as a result of the distribution of property by the Partnership to a
Partner (to the extent that such adjustments have not previously been reflected
in the Partners’ Capital Accounts) shall be reflected in the Capital Accounts
of the Partners in the manner and subject to the limitations prescribed in
Regulations Section 1.704-l(b)(2)(iv)(m)(4).


 


(ii)                                  The computation
of all items of income, gain, and deduction shall be made without regard to the
fact that items described in Section 705(a)(1)(B) or 705(a)(2)(B) of
the Code are not includable in gross income or are neither currently deductible
nor capitalized for federal income tax purposes.


 


(iii)                               Any income,
gain or loss attributable to the taxable disposition of any Partnership
property shall be determined as if the adjusted basis of such property as of
such date of disposition were equal in amount to the Partnership’s Carrying
Value with respect to such property as of such date.


 


B-1

















 


(iv)                              In lieu of the
depreciation, amortization, and other cost recovery deductions taken into
account in computing such taxable income or loss, there shall be taken into
account Depreciation for such fiscal year.


 


(v)                                 In the event
the Carrying Value of any Partnership asset is adjusted pursuant to Section 1(d) herein,
the amount of any such adjustment shall be taken into account as gain or loss
from the disposition of such asset.


 


(vi)                              Notwithstanding
any other provision of this Section 1(b), any items that are
specially allocated pursuant to Exhibit C or Section 6.1(c) of
the Agreement shall not be taken into account for purposes of computing Net
Income or Net Loss.


 


The
amounts of the items of Partnership income, gain, loss or deduction available
to be specially allocated pursuant to Exhibit C or Section 6.1(c) of
the Agreement shall be determined by applying rules analogous to those set
forth in Sections l(b)(i) through l(b)(v) above.


 


(c)                                  Generally, a
transferee (including an Assignee) of an OP Unit shall succeed to a pro rata
portion of the Capital Account of the transferor.


 


(d)                                 (i)                                     Consistent with
the provisions of Regulations Section 1.704-l(b)(2)(iv)(f), and as
provided in Section l(d)(ii), the Carrying Value of all Partnership assets
shall be adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property, as of the times of
the adjustments provided in Section 1 (d)(ii), as if such Unrealized Gain
or Unrealized Loss had been recognized on an actual sale of each such property
and allocated pursuant to Section 6.1 of the Agreement.


 


(ii)                                  Such
adjustments shall be made as of the following times: (A) immediately prior
to the acquisition of an additional interest in the Partnership by any new or
existing Partner in exchange for more than a de minimis Capital Contribution; (B) immediately
prior to the distribution by the Partnership to a Partner of more than a de
minimis amount of property as consideration for an interest in the Partnership;
(C) in connection with the grant of an interest (including LTIP Units) in
the Partnership (other than a de minimis interest), as consideration for the
provision of services to or for the benefit of the Partnership by an existing
Partner acting in a partner capacity or by a new partner acting in a partner
capacity or in anticipation of being a partner; and (D) immediately prior
to the liquidation of the Partnership within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g);
provided, however, that adjustments pursuant to clauses (A), (B) and
(C) above shall be made only if the General Partner determines that such
adjustments are necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership.


 


(iii)                               In accordance
with Regulations Section 1.704-l(b)(2)(iv)(e), the Carrying Value of
Partnership assets distributed in kind shall be adjusted upward or downward to
reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership
property, as of the time any such asset is distributed.


 


(iv)                              The Carrying
Value of Partnership assets shall be increased (or decreased) to reflect any
adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or
Code Section 743(b), but only to the extent that such adjustments are
taken 


 


B-2

















 


into
account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and
Section l(b)(i) hereof or Section l(f) of Exhibit C:
provided, however, that Carrying Values shall not be adjusted
pursuant to this Section 1(d)(iv) to the extent that an adjustment
pursuant to Section 1(d)(ii) is required in connection with a
transaction that would otherwise result in an adjustment pursuant to this Section 1(d)(iv).


 


(v)                                 In determining
Unrealized Gain or Unrealized Loss for purposes of this Exhibit B,
the aggregate cash amount and fair market value of all Partnership assets (including
cash or cash equivalents) shall be determined by the General Partner using such
reasonable method of valuation as it may adopt, or in the case of a liquidating
distribution pursuant to Article 13 of the Agreement, shall be
determined and allocated by the Liquidator using such reasonable method of
valuation as it may adopt.  The General
Partner, or the Liquidator, as the case may be, shall allocate such aggregate
value among the assets of the Partnership (in such manner as it determines in
its sole and absolute discretion to arrive at a fair market value for
individual properties).


 


If
the Carrying Value of an asset has been determined or adjusted pursuant to Section l(b)(ii) or
Section l(b)(iv), such Carrying Value shall thereafter be adjusted
by the Depreciation taken into account with respect to such asset, for purposes
of computing Net Income and Net Loss.


 


(e)                                  The provisions
of the Agreement (including this Exhibit B and other Exhibits to
the Agreement) relating to the maintenance of Capital Accounts are intended to
comply with Regulations Section 1.704-1(b), and shall be interpreted and
applied in a manner consistent with such Regulations.  In the event the General Partner shall
determine that it is prudent to modify (i) the manner in which the Capital
Accounts or any debits or credits thereto (including, without limitation,
debits or credits relating to liabilities which are secured by contributed or
distributed property or which are assumed by the Partnership, the General
Partner, or the Limited Partners) are computed; or (ii) the manner in
which items are allocated among the Partners for federal income tax purposes,
in order to comply with such Regulations or to comply with Section 704(c) of
the Code, the General Partner may make such modification without regard to Article 14
of the Agreement; provided, that it is not likely to have a material
effect on the amounts distributable to any Person pursuant to Article 13
of the Agreement upon the dissolution of the Partnership.  The General Partner also shall (i) make
any adjustments that are necessary or appropriate to maintain equality between
the Capital Accounts of the Partners and the amount of Partnership capital
reflected on the Partnership’s balance sheet, as computed for book purposes, in
accordance with Regulations Section 1.704-l(b)(2)(iv)(q); and (ii) make
any appropriate modifications in the event unanticipated events might otherwise
cause the Agreement not to comply with Regulations Section 1.704-l(b).  In addition, the General Partner may adopt
and employ such methods and procedures for (i) the maintenance of book and
tax capital accounts; (ii) the determination and allocation of adjustments
under Sections 704(c), 734 and 743 of the Code; (iii) the determination of
Net Income, Net Loss, taxable income, taxable loss and items thereof under the
Agreement and pursuant to the Code; (iv) the adoption of reasonable
conventions and methods for the valuation of assets and the determination of
tax basis; (v) the allocation of asset value and tax basis; and (vi) conventions
for the determination of cost recovery, depreciation and amortization
deductions, as it determines in its sole discretion are 


 


B-3

















 


necessary
or appropriate to execute the provisions of the Agreement, to comply with
federal and state tax laws, and are in the best interest of the Partners.


 


2.                                       No Interest


 


No
interest shall be paid by the Partnership on Capital Contributions or on
balances in Partners’ Capital Accounts.


 


3.                                       No Withdrawal


 


No
Partner shall be entitled to withdraw any part of his or its Capital
Contribution or his or its Capital Account or to receive any distribution from
the Partnership, except as provided in Articles 4, 5 and 13
of the Agreement.


 


B-4

















 


Exhibit C


 


SPECIAL
ALLOCATION RULES


 


1.                                       Special
Allocation Rules


 


Notwithstanding
any other provision of the Agreement or this Exhibit C, the
following special allocations shall be made in the following order:


 


(a)                                  Minimum Gain
Chargeback. 
Notwithstanding the provisions of Section 6.1 of the Agreement or
any other provisions of this Exhibit C, if there is a net decrease
in Partnership Minimum Gain during any Partnership taxable year, then, subject
to the exceptions set forth in Regulations Sections 1.704-2(f)(2)-(5), each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner’s share of the net decrease in Partnership Minimum Gain, as determined
under Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto. 
The items to be so allocated shall be determined in accordance with
Regulations Section 1.704-2(f)(6). 
This Section l(a) is intended to comply with the
minimum gain chargeback requirements in Regulations Section 1.704-2(f) and
shall be interpreted consistently therewith. 
Solely for purposes of this Section 1(a), each Partner’s
Adjusted Capital Account Deficit shall be determined prior to any other
allocations pursuant to Section 6.1 of the Agreement of Partner
Minimum Gain during such Partnership taxable year.


 


(b)                                 Partner Minimum
Gain Chargeback. 
Notwithstanding any other provision of Section 6.1 of the Agreement
or any other provisions of this Exhibit C (except Section 1(a) hereof),
if there is a net decrease in Partner Minimum Gain attributable to a Partner
Nonrecourse Debt during any Partnership taxable year, then, subject to the
exceptions referred to in Regulations Section 1.704-2(i)(4), each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5),
shall be specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such Partner’s
share of the net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(5).
Allocations pursuant to the previous sentence shall be made in proportion to
the respective amounts required to be allocated to each Partner pursuant
thereto.  The items to be so allocated
shall be determined in accordance with Regulations Section 1.704-2(i)(4).  This Section 1(b) is
intended to comply with the minimum gain chargeback requirement in such Section of
the Regulations and shall be interpreted consistently therewith.  Solely for purposes of this Section 1(b),
each Partner’s Adjusted Capital Account Deficit shall be determined prior to
any other allocations pursuant to Section 6.1 of the Agreement or this Exhibit with
respect to such Partnership taxable year, other than allocations pursuant to Section 1(a) hereof.


 


(c)                                  Qualified
Income Offset.  In the
event any Partner unexpectedly receives any adjustments, allocations or
distributions described in Regulations Section 1.704-l(b)(2)(ii)(d)(4),
1.704-1 (b)(2)(ii)(d)(5), or 1.704-l(b)(2)(ii)(d)(6), and after giving effect
to the 


 


C-1

















 


allocations
required under Sections 1(a) and 1(b) hereof, such
Partner has an Adjusted Capital Account Deficit, items of Partnership income
and gain (consisting of a pro rata portion of each item of Partnership income,
including gross income and gain for the Partnership taxable year) shall be
specially allocated to such Partner in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, its Adjusted Capital
Account Deficit created by such adjustments, allocations or distributions as
quickly as possible. This Section l(c) is intended to
constitute a qualified income offset under Regulations Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith.


 


(d)                                 Nonrecourse
Deductions.  Nonrecourse
Deductions for any Partnership taxable year shall be allocated to the Partners
in accordance with their respective Percentage Interests.  If the General Partner determines in its good
faith discretion that the Partnership’s Nonrecourse Deductions must be
allocated in a different ratio to satisfy the safe harbor requirements of the
Regulations promulgated under Section 704(b) of the Code, the General
Partner is authorized, upon notice to the Limited Partners, to revise the
prescribed ratio to the numerically closest ratio for such Partnership taxable
year which would satisfy such requirements.


 


(e)                                  Partner
Nonrecourse Deductions.  Any
Partner Nonrecourse Deductions for any Partnership taxable year shall be
specially allocated to the Partner who bears the economic risk of loss with
respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable in accordance with Regulations Section 1.704-2(i).


 


(f)                                    Code Section 754
Adjustments.  To the
extent an adjustment to the adjusted tax basis of any Partnership asset
pursuant to Section 734(b) or 743(b) of the Code is required,
pursuant to Regulations Section 1.704-l(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such item of gain or loss shall be specially allocated to the
Partners in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such Section of the Regulations.


 


(g)                                 Curative
Allocations.  The
allocations set forth in Section 1(a) through l(f) of
this Exhibit C (the “Regulatory Allocations”) are intended
to comply with certain requirements of the Regulations under Section 704(b) of
the Code.  The Regulatory Allocations may
not be consistent with the manner in which the Partners intend to divide
Partnership distributions.  Accordingly,
the General Partner is hereby authorized to divide other allocations of income,
gain, deduction and loss among the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided among the Partners.  In
general, the Partners anticipate that, if necessary, this will be accomplished
by specially allocating other items of income, gain, loss and deduction among
the Partners so that the net amount of the Regulatory Allocations and such
special allocations to each person is zero. 
However, the General Partner will have discretion to accomplish this
result in any reasonable manner; provided, however, that no
allocation pursuant to this Section l(g) shall cause the
Partnership to fail to comply with the requirements of Regulations Section 1.704-l(b)(2)(ii)(d),
-2(e) or -2(i).


 


C-2

















 


2.                                       Allocations for
Tax Purposes


 


(h)                                 Except as otherwise
provided in this Section 2, for federal income tax purposes, each item of
income, gain, loss and deduction shall be allocated among the Partners in the
same manner as its correlative item of “book” income, gain, loss or deduction
is allocated pursuant to Section 6.1 of the Agreement and Section 1
of this Exhibit C.


 


(i)                                     In an attempt
to eliminate Book-Tax Disparities attributable to a Contributed Property or
Adjusted Property, items of income, gain, loss, and deduction shall be
allocated for federal income tax purposes among the Partners as follows:


 


(i)                                                 (A)                              In the case of
a Contributed Property, such items attributable thereto shall be allocated
among the Partners, consistent with the principles of Section 704(c) of
the Code and the Regulations thereunder, and with the procedures and methods
described in Section 10.2 of the Agreement, to take into account
the variation between the 704(c) Value of such property and its adjusted
basis at the time of contribution; and


 


(B)                                any item of
Residual Gain or Residual Loss attributable to a Contributed Property shall be
allocated among the Partners in the same manner as its correlative item of “book”
gain or loss is allocated pursuant to Section 6.1 of the Agreement
and Section 1 of this Exhibit C.


 


(ii)                                  (A)                              In the case of
an Adjusted Property, such items shall:


 


(I)                                    first, be
allocated among the Partners in a manner consistent with the principles of Section 704(c) of
the Code and the Regulations thereunder to take into account the Unrealized
Gain or Unrealized Loss attributable to such property and the allocations
thereof pursuant to Exhibit B; and


 


(II)                                second, in the
event such property was originally a Contributed Property, be allocated among
the Partners in a manner consistent with Section 2(b)(i) of
this Exhibit C; and


 


(B)                                any item of
Residual Gain or Residual Loss attributable to an Adjusted Property shall be
allocated among the Partners in the same manner as its correlative item of “book”
gain or loss is allocated pursuant to Section 6.1 of the Agreement
and Section 1 of this Exhibit C.


 


(j)                                     To the extent
that the Treasury Regulations promulgated pursuant to Section 704(c) of
the Code permit the Partnership to utilize alternative methods to eliminate the
disparities between the Carrying Value of property and its adjusted basis, the
General Partner shall have the authority to elect the method to be used by the
Partnership and such election shall be binding on all Partners.


 


C-3

















 


3.                                       No Withdrawal


 


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 provided in Articles 4, 5 and 13 of the Agreement.


 


C-4














 


Exhibit D


 


NOTICE OF
REDEMPTION


 


The
undersigned Limited Partner hereby irrevocably requests STAG Industrial
Operating Partnership, L.P., a Delaware limited partnership (the “Partnership”),
to redeem
                  
OP Units in the Partnership in accordance with the terms of the Amended and
Restated Agreement of Limited Partnership of the Partnership (the “Agreement”)
and the Redemption Right referred to therein; and the undersigned Limited
Partner irrevocably (i) surrenders such OP Units and all right, title and
interest therein; and (ii) directs that the Cash Amount or REIT Shares Amount
(as determined by the General Partner) deliverable upon exercise of the
Redemption Right be delivered to the address specified below, and if REIT
Shares 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 marketable and
unencumbered title to such OP Units, free and clear of the rights or interests
of any other Person; (b) has the full right, power, and authority to request
such redemption and surrender such OP Units as provided herein; and (c) has
obtained the consent or approval of all Persons, if any, having the right to
consent or approve such redemption and surrender of such OP Units.  The undersigned Limited Partner further
agrees that, in the event that any state or local property tax is payable as a
result of the transfer of its OP Units to the Partnership or STAG REIT, the
undersigned Limited Partner shall assume and pay such transfer tax.


 


All
capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Agreement.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Please
  Print Name of Limited Partner)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature
  of Limited Partner)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Street
  Address)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (City)
  (State) (Zip Code)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature
  Guaranteed by:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If
  REIT Shares are to be issued, issue to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Social security or identifying number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					



 


D-1

















 


Exhibit E


 


CONSTRUCTIVE
OWNERSHIP DEFINITION


 


The
term “Constructively Owns” means ownership determined through the
application of the constructive ownership rules of Section 318 of the Code, as
modified by Section 856(d)(5) of the Code. 
Generally, as of the date of the Agreement, these rules provide the
following:


 


a.                                       an individual
is considered as owning the Ownership Interest that is owned, actually or
constructively, by or for his spouse, his children, his grandchildren, and his
parents;


 


b.                                      an Ownership
Interest that is owned, actually or constructively, by or for a partnership,
limited liability company or estate is considered as owned proportionately by
its partners or beneficiaries;


 


c.                                       an Ownership
Interest that is owned, actually or constructively, by or for a trust is
considered as owned by its beneficiaries in proportion to the actuarial
interest of such beneficiaries (provided, however, that in the
case of a “grantor trust” the Ownership Interest will be considered as owned by
the grantors);


 


d.                                      if ten percent
(10%) or more in value of the stock in a corporation is owned, actually or
constructively, by or for any Person, such Person shall be considered as owning
the Ownership Interest that is owned, actually or constructively, by or for
such corporation in that proportion which the value of the stock which such
Person so owns bears to the value of all the stock in such corporation;


 


e.                                       an Ownership
Interest that is owned, actually or constructively, by or for a partner or
member which actually or constructively owns a 25% or greater capital interest
or profits interest in a partnership or limited liability company, or by or to
or for a beneficiary of an estate or trust shall be considered as owned by the
partnership, limited liability company, estate, or trust (or, in the case of a
grantor trust, the grantors);


 


f.                                         if ten percent
(10%) or more in value of the stock in a corporation is owned, actually or
constructively, by or for any Person, such corporation shall be considered as
owning the Ownership Interest that is owned, actually or constructively, by or
for such Person;


 


g.                                      if any Person
has an option to acquire an Ownership Interest (including an option to acquire
an option or any one of a series of such options), such Ownership Interest
shall be considered as owned by such Person;


 


h.                                      an Ownership
Interest that is constructively owned by a Person by reason of the application
of the rules described in paragraphs (a) through (g) above shall, for purposes
of applying paragraphs (a) through (g), be considered as actually owned by such
Person; provided, however, that (i) an Ownership Interest
constructively owned by an individual by reason of paragraph (a) shall not be
considered as owned by him for purposes of again applying paragraph (a) in
order to make another Person the constructive owner of such Ownership Interest;
(ii) an Ownership Interest constructively owned by a partnership, estate,
trust, or corporation by reason 


 


E-1

















 


of
the application of paragraphs (e) or (f) shall not be considered as owned by it
for purposes of applying paragraphs (b), (c), or (d) in order to make another
Person the constructive owner of such Ownership Interest; (iii) if an Ownership
Interest may be considered as owned by an individual under paragraph (a) or
(g), it shall be considered as owned by him under paragraph (g), and (iv) for
purposes of the above described rules, an S corporation shall be treated as a
partnership and any stockholder of the S corporation shall be treated as a
partner of such partnership except that this rule shall not apply for purposes
of determining whether stock in the S corporation is constructively owned by
any Person.


 


i.                                          For purposes of
the above summary of the constructive ownership rules, the term “Ownership
Interest” means the ownership of stock with respect to a corporation and,
with respect to any other type of entity, the ownership of an interest in
either its assets or net profits.


 


E-2

















 


Exhibit F


 


NOTICE OF
CONVERSION


 


The
undersigned LTIP Unitholder hereby irrevocably (i) elects to convert the number
of LTIP Units in STAG Industrial Operating Partnership, L.P. (the “Partnership”)
set forth below into OP Units in accordance with the terms of the Amended and
Restated Agreement of Limited Partnership of the Partnership, as it may be
amended, supplemented or restated from time to time; and (ii) directs that any cash
in lieu of OP 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; (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 or approval of all persons or entities, if any, having the right to
consent or approve such conversion.


 


	
  Name
  of LTIP Unitholder:

  	
   

  	
   

  
	
   

  	
  (Please
  Print Exact Name as Registered with Partnership)

  	
   

  
	
   

  	
   

  
	
  Number
  of LTIP Units to be Converted:

  	
   

  	
   

  
	
   

  	
   

  
	
  Date
  of this Notice:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

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

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Street
  Address)

  	
  (City) (State) (Zip Code)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature
  Guaranteed by:

  	
   

  	
   

  
						



 


F-1

















 


Exhibit G


 


NOTICE OF
FORCED CONVERSION


 


STAG
Industrial Operating Partnership, L.P. (the “Partnership”) hereby
irrevocably elects to cause the number of LTIP Units held by the LTIP
Unitholder set forth below to be converted into OP Units in accordance with the
terms of the Amended and Restated Agreement of Limited Partnership of the
Partnership, as it may be amended, supplemented and restated from time to time.


 


	
  Name
  of LTIP Unitholder: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Number
  of LTIP Units to be Converted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  of this Notice:

  	
   

  	
   

  
					



 


G-1

















 


Exhibit H


 


SCHEDULE OF
PARTNERS’ OWNERSHIP

WITH RESPECT TO TENANTS


 


[None.]


 


H-1