Exhibit 10.8


EIGHTH AMENDMENT


TO


AMENDED AND
RESTATED PARTNERSHIP AGREEMENT


          THIS EIGHTH
AMENDMENT (the “Eighth Amendment”), dated as of January 15, 2007, to
the Amended and Restated Partnership Agreement, dated as of March 22, 1999, as
amended by the First Amendment dated as of November 15, 1999, the Second
Amendment dated as of November 18, 1999, the Third Amendment dated as of May 1,
2003, the Fourth Amendment dated as of January 27, 2004, the Fifth Amendment
dated as of February 15, 2005, the Sixth Amendment dated as of August 8, 2005,
and the Seventh Amendment dated as of December 12, 2006 (collectively, the
“Agreement”), of ACADIA REALTY LIMITED PARTNERSHIP, a Delaware limited
partnership (the “Partnership”). Capitalized terms used herein but not defined
herein shall have the meanings given such terms in the Agreement. 


BACKGROUND


          The
General Partner desires to establish and set forth the terms of a new class of
Partnership Interests designated as LTIP Units, and the LTIP Units shall have
the terms set forth in Annex C to this Eighth Amendment to the Agreement.


          Section
3.2(B) of the Agreement authorizes the General Partner to cause the Partnership
to issue additional interests in the Partnership to existing or newly-admitted Partners
in exchange for the contribution by a Partner of additional Capital
Contributions to the Partnership. Such additional Partnership Interests may be
issued in one or more classes, or one or more series of any of such classes,
with such designations, preferences and relative, participating, optional or
other special rights, powers and duties, which may be senior, pari passu or
junior to OP Units, all as shall be determined by the General Partner in its
sole and absolute discretion.


          Section
16(B) of the Agreement provides that the General Partner has the power, without
the consent of the Limited Partners of the Partnership, to amend the Agreement
as may be required to facilitate or implement the admission of Partners in
accordance with the Agreement and to set forth the designations, rights,
powers, duties, and preferences of the holders of any additional Partnership
Interests issued pursuant to Section 3.2.


          The General Partner has made the determination
pursuant to Section 16(B) of the Agreement that consent of the Limited Partners
of the Partnership is not required with respect to the matters set forth in
this Eighth Amendment to the Agreement.


          NOW,
THEREFORE, the parties hereto, for good and sufficient
consideration and intending to be legally bound, hereby amend the Agreement as
follows: 






            1.
Section 2 of the Agreement is amended by inserting the following definitions in
alphabetical order: 


	
 

	
 


	
 

	
“2006 LTIP Plan” has the meaning set forth in
 Section 3.B of Annex C to the Eighth Amendment to this Agreement.


	
 

	
 


	
 

	
“Constituent Person” has the meaning set
 forth in Section 7.G of Annex C to the Eighth Amendment to this Agreement.


	
 

	
 


	
 

	
“Economic Capital Account Balance” has the
 meaning set forth in Section 7.3(K).


	
 

	
 


	
 

	
“Interim Distribution Amount” means, with
 respect to an LTIP Unit, an amount equal to the distributions that would have
 been distributed to the holder of such LTIP Unit hereunder prior to the LTIP
 Unit Distribution Participation Date, had the LTIP Unit Distribution Participation
 Date been the date such Unit was granted.


	
 

	
 


	
 

	
“Liquidating Gains” has the meaning set forth
 in Section 7.3(K).


	
 

	
 


	
 

	
“Liquidating Losses” has the meaning set
 forth in Section 7.3(K).


	
 

	
 


	
 

	
“LTIP Unit Adjustment Events” has the meaning
 set forth in Section 5 of Annex C to the Eighth Amendment to this Agreement.


	
 

	
 


	
 

	
“LTIP Unit Capital Account Limitation” has
 the meaning set forth in Section 7.B of Annex C to the Eighth Amendment to
 this Agreement.


	
 

	
 


	
 

	
“LTIP Unit Conversion Date” has the meaning
 set forth in Section 7.C of Annex C to the Eighth Amendment to this
 Agreement.


	
 

	
 


	
 

	
“LTIP Unit Conversion Notice” has the meaning
 set forth in Section 7.C of Annex C to the Eighth Amendment to this
 Agreement.


	
 

	
 


	
 

	
“LTIP Unit Conversion Right” has the meaning
 set forth in Section 7.A of Annex C to the Eighth Amendment to this
 Agreement.


	
 

	
 


	
 

	
“LTIP Unit Distribution Participation Date”
 has the meaning set forth in Section 3.B of Annex C to the Eighth Amendment
 to this Agreement.


	
 

	
 


	
 

	
“LTIP Unit Distribution Payment Date” has the
 meaning set forth in Section 3.A of Annex C to the Eighth Amendment to this
 Agreement.


	
 

	
 


	
 

	
“LTIP Unit Forced Conversion” has the meaning
 set forth in Section 7.D of Annex C to the Eighth Amendment to this
 Agreement.


	
 

	
 


	
 

	
“LTIP Unit Forced Conversion Notice” has the
 meaning set forth in Section 7.D of Annex C to the Eighth Amendment to this
 Agreement.





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“LTIP Unit Limited Partner” means any Person
 holding LTIP Units, and named as a LTIP Unit Limited Partner in Annex A
 attached hereto, as such Annex may be amended from time to time.


	
 

	
 


	
 

	
“LTIP Units” means the Partnership Interests
 designated as such having the rights, powers, privileges, restrictions,
 qualifications and limitations set forth in Annex C to the Eighth Amendment
 to this Agreement.


	
 

	
 


	
 

	
“OP Unit Economic Balance” has the meaning
 set forth in Section 7.3(K).


	
 

	
 


	
 

	
“Partnership Record Date” means the record
 date established by the General Partner for the distribution of cash pursuant
 to Sections 8.1 and 8.2 hereof, which record date shall be the same as the
 record date established by the General Partner for the payment of dividends
 to holders of Common Shares of the General Partner on account of some or all
 of the General Partner’s share of such distribution by the Partnership.


	
 

	
 


	
 

	
“Transaction” has the meaning set forth in
 Section 7.G of Annex C to the Eighth Amendment to this Agreement.


	
 

	
 


	
 

	
“Unvested LTIP Units” has the meaning set
 forth in Section 2.A of Annex C to the Eighth Amendment to this Agreement.


	
 

	
 


	
 

	
“Vested LTIP Units” has the meaning set forth
 in Section 2.A of Annex C to the Eighth Amendment to this Agreement.


	
 

	
 


	
 

	
“Vesting Agreement” has the meaning set forth
 in Section 2.A of Annex C to the Eighth Amendment to this Agreement.





            2.
The following definitions contained in Section 2 of the Agreement are amended
as follows:


            (a)
Section (ii) of the definition of “Gross Asset Value” is hereby amended and
restated in its entirety as follows:


	
 

	
 


	
 

	
          (ii)
 the Gross Asset Value of all Partnership assets shall be adjusted to equal
 their respective gross fair market values, as determined by the General
 Partner, as of the following times: (a) 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) the acquisition of a
 more than de minimis additional interest in the Partnership by any new
 or existing Partner as consideration for the provision of services to or for
 the benefit of the Partnership in a partner capacity or in anticipation of
 becoming a partner; (c) any issuance of LTIP Units by the Partnership; (d)
 the distribution by the Partnership to a Partner of more than a de minimis
 amount of Partnership property as consideration for an interest in the
 Partnership; and (e) the liquidation of the Partnership within the meaning of
 Regulations Section 1.704-1(b)(2)(ii)(g); provided, 





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however, that adjustments pursuant to clauses (a),
 (b), (c) and (d) above shall be made only if the General Partner reasonably
 determines that such adjustments are necessary or appropriate to reflect the
 relative economic interests of the Partners in the Partnership.





            (b)
The definition of “Limited Partner” is hereby amended and restated in its entirety:


	
 

	
 


	
 

	
          “Limited
 Partner” shall mean the Persons listed as limited partners on Annex A or
 any Person (i) who becomes a Limited Partner pursuant to the terms and
 conditions of this Agreement, and (ii) who holds a Partnership Interest.
 “Limited Partners” means all such Persons and shall include, without
 limitation, holders of OP Units, holders of Preferred Units, and LTIP Unit
 Limited Partners.





            (c)
The definition of the term “Percentage Interest” is hereby amended by adding
the following sentence at the end thereof:


	
 

	
 


	
 

	
For purposes of calculations of Percentage Interests
 at any time, the Percentage Interest of any LTIP Unit Limited Partner and the
 total number of Partnership Interests shall exclude any LTIP Units for which
 the LTIP Unit Distribution Participation Date has not occurred as of such
 time.





            3.
Section 3.2 of the Agreement is hereby
supplemented by adding the following paragraph (F) to the end thereof: 


	
 

	
 


	
 

	
             F.
 Issuance of LTIP Units. From and after the date hereof the Partnership
 shall be authorized to issue LTIP Units. From time to time the General
 Partner may issue LTIP Units to Persons providing services to or for the
 benefit of the Partnership. LTIP Units are intended to qualify as profits
 interests in the Partnership. LTIP Units shall have the terms set forth in Annex
 C to the Eighth Amendment to this Agreement. 





            4.
Section 3.8 of the Agreement is hereby supplemented by adding the following
paragraph at the end of Section 3.8: 


	
 

	
 


	
 

	
             Holders
 of LTIP Units shall not be entitled to the rights of exchange or redemption
 provided for in Section 3.8 of this Agreement, unless and until such LTIP
 Units have been converted into OP Units (or any other class or series of
 Partnership Interests entitled to such rights of exchange or redemption).
 Notwithstanding the foregoing, and except as otherwise permitted by the
 award, plan or other agreement pursuant to which an LTIP Unit was issued, the
 rights of exchange or redemption shall not be exercisable with respect to any
 OP Unit issued upon conversion of an LTIP Unit until two years after the date
 on which the LTIP Unit was issued, provided however, that the foregoing
 restriction shall not apply if the right of redemption is exercised by an
 LTIP Unit Limited Partner in connection with a transaction that falls within
 the definition of a “change of 





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control” under the agreement or agreements pursuant
 to which the LTIP Units were issued to such holder.





            5.
Section 7.1 of the Agreement is hereby amended and restated in its entirety as
follows:


	
 

	
 


	
 

	
             7.1
 Profits. After giving effect to the special allocations set forth in
 Sections 7.3 and 7.4 hereof (including, without limitation, allocations to
 holders of Preferred Units pursuant to Section 7.3(H) and special allocations
 to holders of LTIP Units pursuant to Section 7.3(I)), Profits for any fiscal
 year shall be allocated among the Partners in proportion to their respective
 Percentage Interests. For purposes of determining allocations of Profits
 pursuant to this Section 7.1, to the extent that the LTIP Unit Distribution
 Participation Date with respect to an LTIP Unit has occurred, such LTIP Unit
 shall be treated as an OP Unit.





            6.
Section 7.2(A) of the Agreement is hereby amended and restated in its entirety
as follows:


	
 

	
 


	
 

	
             A.
 After giving effect to the special allocations set forth in Sections 7.3 and
 7.4 hereof, Losses for any fiscal year shall be allocated among the Partners
 in proportion to their respective Percentage Interests. For purposes of
 determining allocations of Losses pursuant to this Section 7.2(A), to the
 extent that the LTIP Unit Distribution Participation Date with respect to an
 LTIP Unit has occurred, such LTIP Unit shall be treated as an OP Unit.





            7.
Section 7.3 is hereby supplemented by adding the following paragraph (I) to the
end thereof:


	
 

	
 


	
 

	
             (I)
 Special Interim Allocations. All or a portion of the Profits for a
 taxable year, if any, shall be specially allocated to the holders of LTIP
 Units, with respect to which the LTIP Unit Distribution Participation Date
 has occurred, in proportion to and to the extent of the aggregate
 distributions with respect to an LTIP Unit made with respect to a taxable
 period pursuant to Section 8.6 hereof.





            8.
Section 7.3 is hereby supplemented by appending the following new paragraph
(J):


	
 

	
 


	
 

	
             J.
 Forfeiture Allocations. Upon a forfeiture of any unvested Partnership
 Interest by any Partner, gross items of income, gain, loss or deduction shall
 be allocated to such Partner if and to the extent required by final
 Regulations promulgated after the effective date of the Eighth Amendment to
 this Agreement to ensure that allocations made with respect to all unvested
 Partnership Interests are recognized under Code Section 704(b).





            9.
Section 7.3 is hereby supplemented by adding the following paragraph (K) to the
end thereof:


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             K.
 Special Allocations With Respect to LTIP Units. After giving effect to
 the special allocations set forth in Sections 7.3(A) through 7.3(J) hereof,
 and notwithstanding the provisions of Sections 7.1 and 7.2 above, but subject
 to the prior allocation of Profits under Section 7.1 above, any Liquidating
 Gains shall first be allocated to the holders of LTIP Units until the
 Economic Capital Account Balances of such holders, to the extent attributable
 to their ownership of LTIP Units, are equal to (i) the OP Unit Economic
 Balance, multiplied by (ii) the number of their LTIP Units; provided
 that no such Liquidating Gains will be allocated with respect to any
 particular LTIP Unit unless, and such allocations, if any, shall be made only
 to the extent that, such Liquidating Gains, when aggregated with other
 Liquidating Gains realized by holders of LTIP Units since the issuance of
 such LTIP Unit, exceed Liquidating Losses realized since the issuance of such
 LTIP Unit. After giving effect to the special allocations set forth in
 Sections 7.3(A) through 7.3(K) hereof, and notwithstanding the provisions of
 Sections 7.1 and 7.2 above, in the event that, due to distributions with
 respect to OP Units in which the LTIP Units do not participate or otherwise,
 the Economic Capital Account Balance of any present or former holder of LTIP
 Units, to the extent attributable to the holder’s ownership of LTIP Units,
 exceeds the target balance specified above, then Liquidating Losses shall be
 allocated to such holder to the extent necessary to reduce or eliminate the
 disparity. For this purpose, “Liquidating Gains” means any net gain
 realized in connection with the actual or hypothetical sale of all or
 substantially all of the assets of the Partnership (including upon the
 occurrence of any event of liquidation of the Partnership), including but not
 limited to net gain realized in connection with an adjustment to the Gross
 Asset Value of Partnership assets under the definition of Gross Asset Value
 in Section 2 of this Agreement. Similarly, “Liquidating Losses” means
 any net loss realized in connection with any such event. The “Economic
 Capital Account Balances” of the holders of LTIP Units will be equal to
 their Capital Account balances, plus the amount of their shares of any
 Partner Nonrecourse Debt 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 the General Partner, plus the amount of the General Partner’s
 share of any Partner Nonrecourse Debt Minimum Gain or Partnership Minimum
 Gain, in either case to the extent attributable to the General Partner’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 Section 7.3(K), divided by (ii) the number of the General
 Partner’s OP Units. Any such allocations shall be made among the holders of
 LTIP Units in proportion to the amounts required to be allocated to each
 under this Section 7.3(K). The parties agree that the intent of this Section
 7.3(K) is to make the Capital Account balance associated with each LTIP Unit
 economically equivalent to the Capital Account balance associated with the
 General Partner’s OP Units (on a per-unit basis), but only if the Partnership
 has sufficient cumulative net Liquidating Gains with respect to its assets
 since the issuance of the relevant LTIP Unit. The General Partner may 





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make additional or corrective allocations to the
 extent necessary to achieve this intent.





            10.
Section 7.4 of the Agreement is hereby amended and restated in its entirety as
follows:


	
 

	
 


	
 

	
             7.4
 Curative Allocations. The allocations set forth in Sections 7.2(B),
 7.3(A), 7.3(B), 7.3(C), 7.3 (D), 7.3(E), 7.3(F) and 7.3(G) hereof (the
 “Regulatory Allocations”) are intended to comply with certain requirements of
 the Regulations under Section 704(b) of the Code. It is the intent of the
 Partners that, to the extent possible, all Regulatory Allocations shall be
 offset either with other Regulatory Allocations or with special allocations
 of other items of Partnership income, gain, loss, or deduction pursuant to
 this Section 7.4. Therefore, notwithstanding any other provision of this
 Section 7 (other than Regulatory Allocations and Section 7.6), the General
 Partner shall make such offsetting special allocations of Partnership income,
 gain, loss, or deduction in whatever manner it determines appropriate so
 that, after such offsetting allocations are made, each Partner’s Capital
 Account balance is, to the extent possible, equal to the Capital Account
 balance such Partner would have had if the Regulatory Allocations were not
 part of the Agreement and all Partnership items were allocated pursuant to
 Sections 7.1, 7.2(A), 7.3(H) and 7.3(I). In exercising this discretion under
 this Section 7.4, the General Partner shall take into account future
 Regulatory Allocations under Sections 7.3(A) and 7.3(B) that, although not
 yet made, are likely to offset other Regulatory Allocations previously made
 under Sections 7.3(E) and 7.3(F).





            11.
The last sentence of Section 8.1 of the Agreement is hereby amended and
restated in its entirety as follows:


	
 

	
 


	
 

	
Subject to Section 8.6 below, Operating Cash Flow
 shall be distributed to or for the benefit of the Partners not less
 frequently than annually, and shall be distributed (i) first, to holders of
 any class of Preferred Units in accordance with their Percentage Interests in
 an amount equal to all preferential distributions on such Preferred Units as
 set forth in the Unit Certificate for such class and at the times set forth
 therein, and (ii) thereafter, to the extent of the remaining amount, to and
 among the other Partners in accordance with their respective Percentage
 Interests; or





            12.
The last sentence of Section 8.2 of the Agreement is hereby amended and
restated in its entirety as follows:


	
 

	
 


	
 

	
Subject to Sections 8.6 and 14.2 below, Capital Cash
 Flow shall be distributed to or for the benefit of the Partners not less
 frequently than annually, and in any event as provided in the Unit
 Certificate and shall be distributed first to the holders of Preferred Units
 in the order of their preference and next to the other Partners, in
 accordance with the respective Percentage Interests of the Partners on the
 date of such distribution.





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            13.
Section 8 of the Agreement is amended by appending the following new Section
8.6:


	
 

	
 


	
 

	
             8.6
 Distributions to LTIP Unit Limited Partners. For purposes of the
 foregoing calculations of Sections 8.1 and 8.2, issued and outstanding LTIP
 Units with an associated LTIP Unit Distribution Participation Date that falls
 on or before the Partnership Record Date for a particular distribution shall
 be treated as outstanding OP Units. LTIP Units for which the LTIP Unit Distribution
 Participation Date has not occurred as of the Partnership Record Date for a
 particular distribution shall not be entitled to any of such distribution.
 Notwithstanding the provisions of Section 8, but subject to distributions to
 holders of Preferred Units in accordance with clause (i) in each of Sections
 8.1 and 8.2, with respect to an LTIP Unit, upon the LTIP Unit Distribution
 Participation Date, Operating Cash Flow and Capital Cash Flow shall be
 distributed to the holder of such LTIP Unit in an amount equal to the Interim
 Distribution Amount; provided, however, the amount distributed shall not
 exceed the amount of Profits for such taxable period; and provided, further,
 that, to the extent the entire amount of the Interim Distribution Amount
 cannot be made in a taxable period, the remaining Interim Distribution Amount
 will be carried forward to the next taxable period and distributed to the
 extent of Profits in such following taxable period.





            14.
Article 11 of the Agreement is amended by appending the following new Section
11.7:


	
 

	
 


	
 

	
             11.7
 Safe Harbor Election. To the extent provided for in Regulations,
 revenue rulings, revenue procedures and/or other IRS guidance issued after
 the date hereof, the Partnership is hereby authorized to, and at the
 direction of the General Partner shall, elect a safe harbor under which the
 fair market value of any Partnership Interests issued after the effective
 date of such Regulations (or other guidance) will be treated as equal to the
 liquidation value of such Partnership Interests (i.e., a value equal to the
 total amount that would be distributed with respect to such interests if the
 Partnership sold all of its assets for their fair market value immediately
 after the issuance of such Partnership Interests, satisfied its liabilities
 (excluding any non-recourse liabilities to the extent the balance of such
 liabilities exceed the fair market value of the assets that secure them) and
 distributed the net proceeds to the Partners under the terms of this Agreement).
 In the event that the Partnership makes a safe harbor election as described
 in the preceding sentence, each Partner hereby agrees to comply with all safe
 harbor requirements with respect to transfers of such Partnership Interests
 while the safe harbor election remains effective.





            15.
In making distributions pursuant to Sections 8.1, 8.2 and 8.6 of the Agreement
and allocations pursuant to Sections 7.1, 7.2 and 7.3 of the Agreement, the
General Partner of the Partnership shall take into account the provisions of
Annex C to this Eighth Amendment to the Agreement. 


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          16.
The LTIP Units shall have the
terms set forth in Annex C to this Eighth Amendment to the Agreement.


          17.
Annex A of the Agreement is hereby amended and restated to reflect the
admission as Limited Partners on the date hereof the holders of LTIP Units,
each of whom shall have the number of LTIP Units as is set forth opposite such
holder’s name on Annex A. Annex B of the Agreement is hereby amended and restated
to reflect the Capital Contribution made by the holders of LTIP Units.


          18.
Except as expressly amended
hereby, the Agreement shall remain in full force and effect. 


          IN WITNESS
WHEREOF, this Eighth Amendment to the Partnership Agreement is
executed and delivered as of the date first written above. 


	
 

	
 

	
 


	
 

	
ACADIA
 REALTY TRUST, a Maryland Real
Estate Investment Trust


	
 

	
 

	
 


	
 

	
By:

	
/s/ Kenneth F. Bernstein


	
 

	
 

	



	
 

	
 

	
Kenneth F.
 Bernstein, President


	
 

	
 

	
 


	
 

	
ACADIA
 REALTY LIMITED PARTNERSHIP,
 a Delaware limited partnership


	
 

	
 

	
 


	
 

	
By:

	
Acadia Realty
 Trust, its General Partner


	
 

	
 

	
 


	
 

	
By:

	
/s/ Kenneth F. Bernstein


	
 

	
 

	



	
 

	
 

	
Kenneth F.
 Bernstein, President





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ANNEX A


As of January 15, 2007


A-1






ANNEX B


As of January 15, 2007


B-1






ANNEX C


LTIP Units


          The
following are the terms of the LTIP Units:


          1.
Designation. A class of Partnership Interests in the Partnership
designated as the “LTIP Units” is hereby established. LTIP Units are intended
to qualify as profits interests in the Partnership. The number of LTIP Units
that may be issued shall not be limited.


          2.
Vesting.


                    A.
Vesting, Generally. LTIP Units may, in the sole discretion of the
General Partner, be issued subject to vesting, forfeiture and additional
restrictions on transfer pursuant to the terms of an award, vesting or other
similar agreement (a “Vesting Agreement”). The terms of any Vesting
Agreement may be modified by the General Partner from time to time in its sole
discretion, subject to any restrictions on amendment imposed by the relevant
Vesting Agreement or by the terms of any plan pursuant to which the LTIP Units
are issued, if applicable. LTIP Units that have vested and are no longer
subject to forfeiture under the terms of a Vesting Agreement are referred to as
“Vested LTIP Units”; all other LTIP Units are referred to as “Unvested
LTIP Units.” Subject to the terms of any Vesting Agreement, a holder of
LTIP Units 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 12 of the Agreement.


                    B.
Forfeiture or Transfer of Unvested LTIP Units. Unless otherwise
specified in the relevant Vesting Agreement, upon the occurrence of any event
specified in a Vesting Agreement as resulting in either the forfeiture of any
LTIP Units, or the repurchase by the Partnership or the General Partner of LTIP
Units at a specified purchase price, then upon the occurrence of the
circumstances resulting in such forfeiture or repurchase by the Partnership or
the General Partner, the relevant LTIP Units shall immediately, and without any
further action, be treated as cancelled and no longer outstanding for any
purpose, or as transferred to the Partnership or General Partner, as
applicable. Unless otherwise specified in the Vesting Agreement, no
consideration or other payment shall be due with respect to any LTIP Units that
have been forfeited, other than any distributions declared with a record date
prior to the effective date of the forfeiture. In connection with any
forfeiture or repurchase of LTIP Units, the balance of the portion of the
Capital Account of the holder 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 7.3(K) of the Agreement, calculated with
respect to the holder’s remaining LTIP Units, if any.


                    C.
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 Vesting Agreement,
apply to the LTIP Unit.


C-1






          3.
Distributions.


                    A.
LTIP Distribution Amount. Commencing from and after the LTIP Unit
Distribution Participation Date established for any LTIP Units, such LTIP Units
shall be entitled to receive, if, when and as authorized by the General Partner
out of funds or other property legally available for the payment of
distributions, (i) to the extent of Profits for a taxable period, distributions
equal to the Interim Distribution Amount and (ii) regular, special,
extraordinary or other distributions (other than distributions representing
proceeds of a sale or other disposition of all or substantially all of the
assets of the Partnership) which may be made from time to time, in an amount
per unit equal to the amount of any such distributions that would have been
payable to such holders if the LTIP Units had been OP Units (if specified in the Vesting Agreement or
other documentation pursuant to which the LTIP Units are issued). For
purposes of clarification, distributions of the Interim Distribution Amount
shall be made to LTIP Unit holders to allow such holders to receive an amount
of distributions as if the LTIP Unit Distribution Participation Date had been
the date of grant of such LTIP Units, but only to the extent of Profits
realized in the taxable period in which the LTIP Unit Distribution
Participation Date occurs, or in subsequent taxable periods. LTIP Units shall
also be entitled to receive, if, when and as authorized by the General Partner
out of funds or other property legally available for the payment of
distributions, distributions representing proceeds of a sale or other
disposition of all or substantially all of the assets of the Partnership in an
amount per unit equal to the amount of any such distributions payable on the OP
Units, whether made prior to, on or after the LTIP Unit Distribution
Participation Date, provided that the amount of such distributions shall not
exceed the positive balances of the Capital Accounts of the holders of such
LTIP Units to the extent attributable to the ownership of such LTIP Units.
Distributions on the LTIP Units, if authorized, shall be payable on such dates
and in such manner as may be authorized by the General Partner (any such date,
a “LTIP Unit Distribution Payment Date”); provided that the LTIP Unit
Distribution Payment Date shall be the same as the corresponding date relating
to the corresponding distribution on the OP Units. The record date for
determining which holders of LTIP Units are entitled to receive a distribution
shall be the Partnership Record Date for that distribution. All distributions
paid with respect to LTIP Units prior to the date on which the determination is
made with respect to events resulting in the forfeiture of such LTIP Units or
the repurchase by the Partnership or the General Partner of such LTIP Units
shall be retained by the holder of such LTIP Units and not subject to
forfeiture or restitution in the event that Unvested LTIP Units fail to become
Vested LTIP Units. Following such date of determination, no further
distributions will be paid with respect to Unvested LTIP Units that have been
forfeited or are repurchased by the Partnership or the General Partner, other
than any distributions declared with a record date prior to the effective date
of the forfeiture or repurchase.


                    B.
LTIP Unit Distribution Participation Date. The “LTIP Unit
Distribution Participation Date” for each LTIP Unit will be with respect to
LTIP Units granted pursuant to the Acadia Realty Trust 2006 Long-Term Incentive
Plan (the “2006 LTIP Plan”), or with respect to other LTIP Units, such
date as may be specified in the Vesting Agreement or other documentation
pursuant to which such LTIP Units are issued.


C-2






          4.
Allocations.


          Commencing
with the portion of the taxable year of the Partnership that begins on the LTIP
Unit Distribution Participation Date established for any LTIP Units, such LTIP
Units shall be allocated (i) special allocations pursuant to Section 7.3(I) of
the Agreement, in an amount equal to the Interim Distribution Amount (limited
to the amount of Profits for the taxable period in which the LTIP Unit
Distribution Participation Date occurs, or in subsequent taxable periods) and
(ii) Profits and Losses in amounts per LTIP Unit equal to the amounts allocated
per OP Unit. The allocations provided by the preceding sentence shall be
subject to Sections 7.1 and 7.2 and in addition to any special allocations
required by Sections 7.3(A) through 7.3(K) (including, without limitation,
allocations to holders of Preferred Units pursuant to Section 7.3(H)). The
General Partner is authorized in its discretion to adjust the allocations made
under this Section 4 after the LTIP Unit Distribution Participation Date, so
that the ratio of (i) the total amount of Profits or Losses allocated with
respect to each LTIP Unit in the taxable year in which that LTIP Unit’s LTIP
Unit Distribution Participation Date falls (excluding special allocations under
Sections 7.3(I) and 7.3(K) of the Agreement), to (ii) the total amount
distributed to that LTIP Unit with respect to such period (excluding
distributions of the Interim Distribution Amount pursuant to Section 8.6 of the
Agreement), is more nearly equal to the ratio of (i) the Profits and Losses
allocated with respect to the General Partner’s OP Units in such taxable year
to (ii) the amounts distributed to the General Partner with respect to such OP
Units and such taxable year.


          5.
Adjustments.


          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; provided
that the foregoing is not intended to alter the LTIP Unit Capital Account
Limitation (as defined in Section 7.B), the special allocations pursuant to
Sections 7.3(I), 7.3(J) and (K) of the Agreement, differences between
distributions (other than distributions representing proceeds of a sale or
other disposition of all or substantially all of the assets of the Partnership)
to be made with respect to the LTIP Units and OP Units prior to the LTIP Unit
Distribution Participation Date for such LTIP Units, differences between
distributions (other than distributions representing proceeds of a sale or
other disposition of all or substantially all of the assets of the Partnership)
to be made with respect to the LTIP Units and OP Units pursuant to Section 14.2
of the Agreement or Section 3.A hereof in the event that the Capital Accounts
attributable to the LTIP Units are less than those attributable to the OP Units
due to insufficient special allocations pursuant to Section 7.3(K) of the
Agreement or related provisions. If an LTIP Unit Adjustment Event (as defined
below) occurs, then the General Partner shall make a corresponding adjustment
to the LTIP Units to maintain such one-for-one correspondence between OP Units
and LTIP Units. The following shall be “LTIP Unit Adjustment Events”:
(A) the Partnership makes a distribution on all outstanding OP Units in
Partnership Interests, (B) the Partnership subdivides the outstanding OP Units
into a greater number of units or combines the outstanding OP Units into a
smaller number of units, or (C) the Partnership issues any Partnership 


C-3






Interests in exchange for its outstanding OP Units by
way of a reclassification or recapitalization of its OP Units. If more than one
LTIP Unit Adjustment Event occurs, the adjustment to the LTIP Units need be
made only once using a single formula that takes into account each and every
LTIP Unit Adjustment Event as if all LTIP Unit Adjustment Events occurred
simultaneously. For the avoidance of doubt, the following shall not be LTIP
Unit Adjustment Events: (x) the issuance of Partnership Interests in a
financing, reorganization, acquisition or other similar business transaction,
(y) the issuance of Partnership Interests pursuant to any employee benefit or
compensation plan or distribution reinvestment plan, or (z) the issuance of any
Partnership Interests to the General Partner in respect of a Capital
Contribution to the Partnership of proceeds from the sale of securities by the
General Partner. If the Partnership takes an action affecting the OP Units
other than actions specifically described above as LTIP Unit 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 make such adjustment to the LTIP
Units, to the extent permitted by law and by the terms of any plan pursuant to
which the LTIP Units have been issued,
in such manner and at such time as the General Partner, in its sole discretion,
may determine to be appropriate under the circumstances. If an adjustment is
made to the LTIP Units as herein provided, the Partnership shall promptly file
in the books and records of the Partnership an officer’s certificate setting
forth such adjustment and a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the correctness
of such adjustment absent manifest error. Promptly after filing of such
certificate, the Partnership shall mail a notice to each holder of LTIP Units
setting forth the adjustment to his or her LTIP Units and the effective date of
such adjustment.


          6.
Ranking.


          The
LTIP Units shall rank on parity with the OP Units in all respects and junior to
all Preferred Units, with respect to distribution rights and rights upon
voluntary or involuntary liquidation, winding up or dissolution of the
Partnership, subject to the proviso in the first sentence of Section 5.


          7.
Right to Convert LTIP Units into OP Units.


                    A.
Conversion Right. A holder of LTIP Units shall have the right (the “LTIP
Unit 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. Holders of LTIP
Units shall not have the right to convert Unvested LTIP Units into OP Units
until they become Vested LTIP Units; provided, however, that when
a holder of LTIP Units is notified of the expected occurrence of an event that
will cause his or her Unvested LTIP Units to become Vested LTIP Units, such
Person may give the Partnership an LTIP Unit Conversion Notice conditioned upon
and effective as of the time of vesting, and such LTIP Unit Conversion Notice,
unless subsequently revoked by the holder of the LTIP Units, shall be accepted
by the Partnership subject to such condition. The General Partner shall have
the right at any time to cause a conversion of Vested LTIP Units into 


C-4






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 7.


                    B.
Number of Units Convertible. A holder of Vested LTIP Units may convert
such Vested LTIP Units into an equal number of fully paid and non-assessable OP
Units, giving effect to all adjustments (if any) made pursuant to
Section 5. 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 holder, 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 “LTIP
Unit Capital Account Limitation”).


                    C.
Notice. In order to exercise his or her Conversion Right, a holder of
LTIP Units shall deliver a notice (a “LTIP Unit Conversion Notice”) in
the form attached as Annex D to the Eighth Amendment not less than 10
nor more than 60 days prior to a date (the “LTIP Unit Conversion Date”)
specified in such LTIP Unit Conversion Notice. Each holder of LTIP Units
covenants and agrees with the Partnership that all Vested LTIP Units to be
converted pursuant to this Section 7 shall be free and clear of all liens.
Notwithstanding anything herein to the contrary (but subject to Section 3.8 of
the Agreement), a holder of LTIP Units may deliver a notice pursuant to Section
3.8 of the Agreement 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 LTIP
Unit Conversion Date; provided, however, that the exchange or redemption of
such OP Units by the Partnership shall in no event take place until the LTIP
Unit Conversion Date. For clarity, it is noted that the objective of this
paragraph is to put a holder of LTIP Units 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 exchanged or redeemed by the Partnership simultaneously with such
conversion, with the further consequence that, if in accordance with Section
3.8 of the Agreement the General Partner delivers to such holder Common Shares
(rather than cash), then such holder can have such Common 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 a holder of LTIP Units to
coordinate the timing of the different events described in the foregoing
sentence.


                    D.
Forced Conversion. The Partnership, at any time at the election of the
General Partner, may cause any number of Vested LTIP Units held by a holder of
LTIP Units to be converted (a “LTIP Unit Forced Conversion”) into an
equal number of OP Units, giving effect to all adjustments (if any) made
pursuant to Section 5; provided, that the Partnership may not cause an
LTIP Unit Forced Conversion of any LTIP Units that would not at the time be
eligible for conversion at the option of the holder of such LTIP Units pursuant
to Section 7.B. above (including taking into account the LTIP Unit Capital
Account Limitation). In order to exercise its right to cause an LTIP Unit
Forced Conversion, the Partnership shall deliver a notice (a “LTIP Unit
Forced Conversion Notice”) in the form attached as Annex E to the
Eighth Amendment to the applicable holder not less than 10 nor more than 60
days prior to the LTIP Unit Conversion Date specified in such LTIP Unit Forced
Conversion Notice. A Forced LTIP Unit Conversion Notice shall be provided in
the manner provided in Section 17.1 of the Agreement.


C-5






                    E.
Conversion Procedures. Subject to any exchange or redemption of OP Units
to be received upon the conversion of Vested LTIP Units, a conversion of Vested
LTIP Units for which the holder thereof has given an LTIP Unit Conversion
Notice or the Partnership has given a Forced LTIP Unit Conversion Notice shall
occur automatically after the close of business on the applicable LTIP Unit
Conversion Date without any action on the part of such holder of LTIP Units, as
of which time such holder of LTIP Units 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
holder of LTIP Units, 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 Person immediately after such conversion.


                    F.
Treatment of Capital Account. For purposes of making future allocations
under Section 7.3(K) of the Agreement and applying the LTIP Unit Capital
Account Limitation, the portion of the Economic Capital Account Balance of the
applicable holder of LTIP Units 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.
Mandatory Conversion in Connection with a Transaction. If the
Partnership or the General Partner 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 LTIP
Unit 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 OP Units shall
otherwise be entitled, to receive cash, securities or other property or any
combination thereof (each of the foregoing being referred to herein as a “Transaction”),
then the General Partner shall, immediately prior to the Transaction, exercise
its right to cause a LTIP Unit 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 Partnership
Interests in the context of the Transaction (in which case the LTIP Unit
Conversion Date shall be the effective date of the Transaction and the conversion
shall occur immediately prior to the effectiveness of the Transaction). 


          In
anticipation of such LTIP Unit Forced Conversion and the consummation of the
Transaction, the Partnership shall use commercially reasonable efforts to cause
each holder of LTIP Units 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 


C-6






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 the Transaction, prior to such Transaction the General
Partner shall give prompt written notice to each holder of LTIP Units of such
election, and shall use commercially reasonable efforts to afford such holders
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 a holder of LTIP
Units 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 a OP Unit would receive if such holder of OP Units failed to make
such an election.


          Subject
to the rights of the Partnership and the General Partner under any Vesting
Agreement and the terms of any plan under which LTIP Units are issued, the
Partnership shall use commercially reasonable efforts to cause the terms of any
Transaction to be consistent with the provisions of this Section 7 and to enter
into an agreement with the successor or purchasing entity, as the case may be,
for the benefit of any holders of LTIP Units 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 the
Agreement for the benefit of the holders of LTIP Units.


          8.
Redemption at the Option of the Partnership.


          LTIP
Units will not be redeemable at the option of the Partnership; provided,
however, that the foregoing shall not prohibit the Partnership from (i)
repurchasing LTIP Units from the holder thereof if and to the extent such
holder agrees to sell such LTIP Units or (ii) from exercising its LTIP Unit
Forced Conversion right.


          9.
Voting Rights.


                    A.
Voting with OP Units. Holders of LTIP Units shall have the right to vote
on all matters submitted to a vote of the holders of OP Units; holders of LTIP
Units and OP Units shall vote together as a single class, together with any
other class or series of Partnership Interests upon which like voting rights
have been conferred. In any matter in which the LTIP Units are entitled to
vote, including an action by written consent, each LTIP Unit shall be entitled
to vote a Percentage Interest equal on a per unit basis to the Percentage
Interest represented by each OP Unit. 


                    B.
Special Approval Rights. Except as provided in Section 9.A. above,
holders of LTIP Units shall only (a) have those voting rights required from
time to 


C-7






time by non-waivable provisions of applicable law, if
any, and (b) have the additional voting rights that are expressly set forth in
this Section 9.B. The General Partner and/or the Partnership shall not, without
the affirmative vote of holders of more than 50% of the then outstanding LTIP
Units affected thereby, given in person or by proxy, either in writing or at a
meeting (voting separately as a class), take any action that would materially
and adversely alter, change, modify or amend, whether by merger, consolidation
or otherwise, the rights, powers or privileges of such LTIP Units, subject to
the following exceptions:


                              (i)
no separate consent of the holders of LTIP Units will be required if and to the
extent that any such alteration, change, modification or amendment would
equally, ratably and proportionately alter, change, modify or amend the rights,
powers or privileges of the OP Units (in which event the holders of LTIP Units
shall only have such voting rights, if any, as provided for in the Agreement,
in accordance with Section 9.A above);


                              (ii)
with respect to any merger, consolidation or other business combination or
reorganization, so long as either (w) the LTIP Units are converted into OP
Units immediately prior to the effectiveness of the transaction, (x) the
holders of LTIP Units either will receive, or will have the right to elect to
receive, for each LTIP Unit an amount of cash, securities, or other property
equal to the greatest amount of cash, securities or other property paid to a
holder of one OP Unit in consideration of one OP Unit pursuant to the terms of
such transaction, (y) the LTIP Units remain outstanding with the terms thereof
materially unchanged, or (z) if the Partnership is not the surviving entity in
such transaction, the LTIP Units are exchanged for a security of the surviving
entity with terms that are materially the same with respect to rights to
allocations, distributions, redemption, conversion and voting as the LTIP Units
and without any income, gain or loss expected to be recognized by the holder
upon the exchange for federal income tax purposes (and with the terms of the OP
Units or such other securities into which the LTIP Units (or the substitute
security therefor) are convertible materially the same with respect to rights
to allocations, distributions, redemption, conversion and voting), such merger,
consolidation or other business combination or reorganization shall not be
deemed to materially and adversely alter, change, modify or amend the rights,
powers or privileges of the LTIP Units, provided further, that if some, but not
all, of the LTIP Units are converted into OP Units immediately prior to the
effectiveness of the transaction (and neither clause (y) or (z) above is
applicable), then the consent required pursuant to this Section will be the
consent of the holders of more than 50% of the LTIP Units to be outstanding
following such conversion;


                              (iii)
any creation or issuance of Partnership Interests (whether ranking junior to,
on a parity with or senior to the LTIP Units with respect to payment of
distributions, rights of exchange and redemption and the distribution of assets
upon liquidation, dissolution or winding up), which either (x) does not require
the consent of the holders of OP Units or (y) does require such consent and is
authorized by a vote of the holders of OP Units and LTIP Units voting together
as a single class pursuant to Section 9.A above, together with any other class
or series of units of limited partnership interest in the Partnership upon which
like voting rights have been conferred, shall not be 


C-8






deemed to materially and adversely alter, change,
modify or amend the rights, powers or privileges of the LTIP Units; and 


                              (iv)
any waiver by the Partnership of restrictions or limitations applicable to any
outstanding LTIP Units with respect to any holder or holders thereof shall not
be deemed to materially and adversely alter, change, modify or amend the
rights, powers or privileges of the LTIP Units with respect to other holders.


          The
foregoing voting provisions will not apply if, as of or prior to the time when
the action with respect to which such vote would otherwise be required will be
taken or be effective, all outstanding LTIP Units shall have been converted
and/or redeemed, or provision is made for such redemption and/or conversion to
occur as of or prior to such time.


[End of text]


C-9






ANNEX D


NOTICE
OF ELECTION BY PARTNER TO CONVERT

LTIP UNITS INTO OP UNITS


          The
undersigned holder of LTIP Units hereby irrevocably elects to convert the
number of Vested LTIP Units in Acadia Realty Limited Partnership (the
“Partnership”) set forth below into OP Units in accordance with the terms of
the Amended and Restated Limited Partnership Agreement of the Partnership, as
amended. 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 Holder: 

	
 


	
 

	
 

	



	
 

	
(Please Print: Exact
 Name as Registered with Partnership) 


	
 

	
 

	
 


	
Number of LTIP Units to be Converted: 


	
 

	
 

	
 

	



	
 

	
 

	
 


	
Conversion Date: 

	
 


	
 

	
 

	



	
 

	
 

	
 


	
 

	


	
 


	
 

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

	
 


	
 

	
 

	
 

	
 


	
 

	


	
 


	
 

	
(Street Address)

	
 


	
 

	
 

	
 

	
 


	
 

	


	
 


	
 

	
(City) 

	
(State)

	
(Zip Code)

	
 


	
 

	
 

	
 

	
 


	
 

	
Signature Guaranteed by:  

	
 


	
 

	
 

	
 

	


	
 





D-1






ANNEX E


NOTICE
OF ELECTION BY PARTNERSHIP TO FORCE CONVERSION

OF LTIP UNITS INTO OP UNITS


          Acadia
Realty Limited Partnership (the “Partnership”) hereby irrevocably elects to
cause the number of LTIP Units held by the holder of LTIP Units set forth below
to be converted into OP Units in accordance with the terms of the Amended and
Restated Limited Partnership Agreement of the Partnership, as amended. 


	
 

	
 

	
 

	
 

	
 


	
Name of Holder:


	
 

	



	
(Please Print: Exact
 Name as Registered with Partnership)           

	
 


	
 


	
Number of LTIP Units to be Converted: 


	
 

	


	
 


	
Conversion Date: 


	
 

	


	
 





E-1