Document:

Loan
Agreement

    

    Party
A(Borrower):Harbin Humankind
Biology Technology Co., Limited

    

    Party
B(Lender):Xin
Sun

    ID
Number:23010219660523161X

    

    On the
basis of equality, voluntariness and negotiation, both Party A and Party B enter
into this agreement about the loan.

    

    
      I. Party
B loans RMB 16,000 to Party A and provides the loan before March 1,
2009.

    

    II. Interest: No Interest.

    III. Life
of Loan: No fixed terms of repayment.

    IV. Date
and Method of Payments: Party A will make the repayments in cash according to
the operation of its company.

    V. Settlements
of Diputes: apply for arbitration in local arbitration committee.

    VI. This
contract is taken into effect since signing date. This contract is executed in
two copies with the same legal effect. Both parties hold one copy
respectively.

    

      
        
          
            
              
                	
                        Party
      A(Seal):

                      	
                        Party
      B:

                      
	
                        Harbin
      Humankind Biology

                      	 
      
	
                        Technology
      Co. Limited

                      	
                        /s/
      Xin Sun

                      
	 
      	 
      
	
                        Date:

                      	
                        Date:
      February 28,
2009Loan
Agreement

    

    Party
A(Borrower):Harbin Humankind
Biology Technology Co., Limited

    

    Party
B(Lender):Xin
Sun

    ID
Number:23010219660523161X

    

    On the
basis of equality, voluntariness and negotiation, both Party A and Party B enter
into this agreement about the loan.

    

    
      I. Party
B loans USD 28,500 to Party A and provides the loan before May 25,
2009.

    

    II. Interest: No Interest.

    III. Life
of Loan: No fixed terms of repayment.

    IV. Date
and Method of Payments: Party A will make the repayments in cash according to
the operation of its company.

    V. Settlements
of Diputes: apply for arbitration in local arbitration committee.

    VI. This
contract is taken into effect since signing date. This contract is executed in
two copies with the same legal effect. Both parties hold one copy
respectively.

    

    
      
        
          	
                  Party
      A(Seal):

                	
                  Party
      B:

                
	
                  Harbin
      Humankind Biology

                	 
      
	
                  Technology
      Co. Limited

                	
                  /s/
      Xin Sun

                
	 
      	 
      
	
                  Date:

                	
                  Date:
      May 24, 2009Loan
Agreement

    

    Party
A(Borrower):Harbin Humankind
Biology Technology Co., Limited

    

    Party
B(Lender):Xin
Sun

    ID
Number:23010219660523161X

    

    On the
basis of equality, voluntariness and negotiation, both Party A and Party B enter
into this agreement about the loan.

    

    
      I. Party
B loans RMB 700,000 to Party A and provides the loan before June 18,
2009.

    

    II. Interest: No Interest.

    III. Life
of Loan: No fixed terms of repayment.

    IV. Date
and Method of Payments: Party A will make the repayments in cash according to
the operation of its company.

    V. Settlements
of Diputes: apply for arbitration in local arbitration committee.

    VI. This
contract is taken into effect since signing date. This contract is executed in
two copies with the same legal effect. Both parties hold one copy
respectively.

    

    
      
        
          	
                  Party
      A(Seal):

                	
                  Party
      B:

                
	
                  Harbin
      Humankind Biology

                	 
      
	
                  Technology
      Co. Limited

                	
                  /s/
      Xin Sun

                
	 
      	 
      
	
                  Date:

                	
                  Date:
      June 17, 2009Unassociated Document

    AMENDED
AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

    

    OF

    

    PREFERRED
APARTMENT COMMUNITIES OPERATING PARTNERSHIP, L.P.

     

    
      
        

      

    

    

    Date as
of
[                ],
2010

    

    
      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    

    
      
        
          
            	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      
	
                    ARTICLE 1
      DEFINED TERMS

                  	
                    1

                  
	 
      	 
      
	
                    ARTICLE 2
      ORGANIZATIONAL MATTERS

                  	
                    16

                  
	
                    2.1

                  	
                    Formation

                  	
                    16

                  
	
                    2.2

                  	
                    Name

                  	
                    17

                  
	
                    2.3

                  	
                    Registered
      Office and Agent; Principal Office

                  	
                    17

                  
	
                    2.4

                  	
                    Power
      of Attorney

                  	
                    17

                  
	
                    2.5

                  	
                    Term

                  	
                    19

                  
	 
      	 
      
	
                    Article
      3 PURPOSE

                  	
                    19

                  
	
                    3.1

                  	
                    Purpose
      and Business

                  	
                    19

                  
	
                    3.2

                  	
                    Powers

                  	
                    19

                  
	 
      	 
      
	
                    ARTICLE 4
      CAPITAL CONTRIBUTIONS

                  	
                    20

                  
	
                    4.1

                  	
                    Capital
      Contributions of the Partners

                  	
                    20

                  
	
                    4.2

                  	
                    Additional
      Funds; Restrictions on the General Partner

                  	
                    21

                  
	
                    4.3

                  	
                    Issuance
      of Additional Partnership Interests; Admission of Additional Limited
      Partners

                  	
                    23

                  
	
                    4.4

                  	
                    Contribution
      of Proceeds of Issuance of Class A Common Stock

                  	
                    24

                  
	
                    4.5

                  	
                    Repurchase
      of Class A Common Stock; Shares-In-Trust

                  	
                    24

                  
	
                    4.6

                  	
                    No
      Third-Party Beneficiary

                  	
                    25

                  
	
                    4.7

                  	
                    No
      Interest; No Return

                  	
                    25

                  
	
                    4.8

                  	
                    No
      Preemptive Rights

                  	
                    25

                  
	 
      	 
      
	
                    ARTICLE 5
      DISTRIBUTIONS

                  	
                    26

                  
	
                    5.1

                  	
                    Distributions

                  	
                    26

                  
	
                    5.2

                  	
                    Qualification
      as a REIT

                  	
                    27

                  
	
                    5.3

                  	
                    Withholding

                  	
                    27

                  
	
                    5.4

                  	
                    Additional
      Partnership Interests

                  	
                    27

                  
	 
      	 
      
	
                    ARTICLE 6
      ALLOCATIONS

                  	
                    28

                  
	
                    6.1

                  	
                    Allocations

                  	
                    28

                  
	
                    6.2

                  	
                    Revisions
      to Allocations to Reflect Issuance of Partnership
Interests

                  	
                    28

                  
	 
      	 
      
	
                    ARTICLE 7
      MANAGEMENT AND OPERATIONS OF BUSINESS

                  	
                    28

                  
	
                    7.1

                  	
                    Management

                  	
                    28

                  
	
                    7.2

                  	
                    Certificate
      of Limited Partnership

                  	
                    33

                  
	
                    7.3

                  	
                    Reimbursement
      of the General Partner

                  	
                    34

                  
	
                    7.4

                  	
                    Outside
      Activities of the General Partner

                  	
                    35

                  
	
                    7.5

                  	
                    Contracts
      with Affiliates

                  	
                    36

                  
	
                    7.6

                  	
                    Indemnification

                  	
                    36

                  
	
                    7.7

                  	
                    Liability
      of the General Partner

                  	
                    39

                  
	
                    7.8

                  	
                    Other
      Matters Concerning the General Partner

                  	
                    40

                  
	
                    7.9

                  	
                    Title
      to Partnership Assets

                  	
                    40

                  

          

        

      

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  7.10

                	
                  Reliance
      by Third Parties

                	
                  41

                
	
                  7.11

                	
                  Loans
      By Third Parties

                	
                  42

                
	 
      	 
      
	
                  ARTICLE 8
      RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

                	
                  42

                
	
                  8.1

                	
                  Limitation
      of Liability

                	
                  42

                
	
                  8.2

                	
                  Management
      of Business

                	
                  42

                
	
                  8.3

                	
                  Outside
      Activities of Limited Partners

                	
                  42

                
	
                  8.4

                	
                  Return
      of Capital

                	
                  43

                
	
                  8.5

                	
                  Rights
      of Limited Partners Relating to the Partnership

                	
                  43

                
	
                  8.6

                	
                  Exchange
      Rights Agreements

                	
                  44

                
	 
      	 
      
	
                  ARTICLE 9
      BOOKS, RECORDS, ACCOUNTING AND REPORTS

                	
                  44

                
	
                  9.1

                	
                  Records
      and Accounting

                	
                  44

                
	
                  9.2

                	
                  Fiscal
      Year

                	
                  44

                
	
                  9.3

                	
                  Reports

                	
                  44

                
	 
      	 
      
	
                  ARTICLE 10
      TAX MATTERS

                	
                  45

                
	
                  10.1

                	
                  Preparation
      of Tax Returns

                	
                  45

                
	
                  10.2

                	
                  Tax
      Elections

                	
                  45

                
	
                  10.3

                	
                  Tax
      Matters Partner

                	
                  46

                
	
                  10.4

                	
                  Organizational
      Expenses

                	
                  47

                
	
                  10.5

                	
                  Withholding

                	
                  47

                
	 
      	 
      
	
                  ARTICLE 11
      TRANSFERS AND WITHDRAWALS

                	
                  49

                
	
                  11.1

                	
                  Transfer

                	
                  49

                
	
                  11.2

                	
                  Transfer
      of the General Partner’s General Partner Interest

                	
                  49

                
	
                  11.3

                	
                  Limited
      Partners’ Rights to Transfer

                	
                  51

                
	
                  11.4

                	
                  Substituted
      Limited Partners

                	
                  53

                
	
                  11.5

                	
                  Assignees

                	
                  53

                
	
                  11.6

                	
                  General
      Provisions

                	
                  54

                
	 
      	 
      
	
                  ARTICLE 12
      ADMISSION OF PARTNERS

                	
                  56

                
	
                  12.1

                	
                  Admission
      of Successor General Partner

                	
                  56

                
	
                  12.2

                	
                  Admission
      of Additional Limited Partners

                	
                  57

                
	
                  12.3

                	
                  Amendment
      of Agreement and Certificate of Limited Partnership

                	
                  58

                
	 
      	 
      
	
                  ARTICLE 13
      DISSOLUTION, LIQUIDATION AND TERMINATION

                	
                  58

                
	
                  13.1

                	
                  Dissolution

                	
                  59

                
	
                  13.2

                	
                  Winding
      Up

                	
                  59

                
	
                  13.3

                	
                  No
      Obligation to Contribute Deficit

                	
                  61

                
	
                  13.4

                	
                  Rights
      of Limited Partners

                	
                  61

                
	
                  13.5

                	
                  Notice
      of Dissolution

                	
                  61

                
	
                  13.6

                	
                  Termination
      of Partnership and Cancellation of Certificate of Limited
      Partnership

                	
                  61

                
	
                  13.7

                	
                  Reasonable
      Time for Winding-Up

                	
                  61

                
	
                  13.8

                	
                  Waiver
      of Partition

                	
                  62

                

        

      

    

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    
 

    
      
        
          
            
              
                
                  
                    
                      	
                              ARTICLE 14
      AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

                            	
                              62

                            
	
                              14.1

                            	
                              Amendments

                            	
                              62

                            
	
                              14.2

                            	
                              Meetings
      of the Partners

                            	
                              63

                            
	 
      	 
      
	
                              ARTICLE 15
      GENERAL PROVISIONS

                            	
                              64

                            
	
                              15.1

                            	
                              Addresses
      and Notice

                            	
                              64

                            
	
                              15.2

                            	
                              Titles
      and Captions

                            	
                              64

                            
	
                              15.3

                            	
                              Pronouns
      and Plurals

                            	
                              64

                            
	
                              15.4

                            	
                              Further
      Action

                            	
                              64

                            
	
                              15.5

                            	
                              Binding
      Effect

                            	
                              65

                            
	
                              15.6

                            	
                              Creditors

                            	
                              65

                            
	
                              15.7

                            	
                              Waiver

                            	
                              65

                            
	
                              15.8

                            	
                              Counterparts

                            	
                              65

                            
	
                              15.9

                            	
                              Applicable
      Law

                            	
                              65

                            
	
                              15.10

                            	
                              Invalidity
      of Provisions

                            	
                              65

                            
	
                              15.11

                            	
                              Entire
      Agreement

                            	
                              65

                            
	
                              15.12

                            	
                              Merger

                            	
                              65

                            
	
                              15.13

                            	
                              No
      Rights as Stockholders

                            	
                              66

                            
	 
      	 
      	 
      
	
                              EXHIBITS

                            	 
      
	 
      	 
      
	
                              Exhibit
      A   –   Partners’
      Contributions and Partnership Interests

                            	  
	
                              Exhibit
      B   –   Allocations

                            	 
      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    AMENDED
AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

    OF

    PREFERRED
APARTMENT COMMUNITIES OPERATING PARTNERSHIP, L.P.

     

    THIS
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF PREFERRED APARTMENT
COMMUNITIES OPERATING PARTNERSHIP, L.P. dated as of                 , 2010, is entered into
among PREFERRED APARTMENT COMMUNITIES, INC., a Maryland corporation, as General
Partner, and PREFERRED APARTMENT ADVISORS, LLC, a Delaware limited liability
company, as the Initial Limited Partner and as the Special Limited Partner, and
the Limited Partners party hereto from time to time.

     

    WHEREAS,
the General Partner formed Preferred Apartment Communities Operating
Partnership, L.P. as a limited partnership on May 13, 2010 pursuant to the
Revised Uniform Limited Partnership Act of the State of Delaware and filed a
certificate of limited partnership with the Secretary of State of the State of
Delaware (the “Certificate”).

     

    WHEREAS,
the General Partner and the Initial Limited Partner entered into the Agreement
of Limited Partnership on May 13, 2010 (the “Original
Agreement”).

     

    WHEREAS,
the General Partner and the Initial Limited Partner have agreed to make certain
amendments and desire to amend and restate the Original Agreement.

     

    NOW
THEREFORE, in consideration of the mutual covenants herein contained, and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties do hereby agree that the Original Agreement
hereby is amended and restated in its entirety to read 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.

     

    “Act”
means the Delaware Revised Uniform Limited Partnership Act, as amended from time
to time, and any successor to such statute.

     

    “Additional
Limited Partner” means a Person that has executed and delivered an
additional limited partner signature page in the form attached hereto, has been
admitted to the Partnership as a Limited Partner pursuant to Section 4.3 and that
is shown as such on the books and records of the Partnership.

     

    “Adjusted
Capital Account Deficit” means, with respect to any Partner, the negative
balance, if any, in such Partner’s Capital Account as of the end of any relevant
fiscal year, determined after giving effect to the following
adjustments:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (a)           credit
to such Capital Account any portion of such negative balance which such Partner
(i) is treated as obligated to restore to the Partnership pursuant to the
provisions of Section 1.704-1(b)(2)(ii)(c) of the Regulations, or (ii) is deemed
to be obligated to restore to the Partnership pursuant to the penultimate
sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations;
and

     

    (b)           debit
to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4),
(5) and (6) of the Regulations.

     

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

     

    “Affected
Gain” has the meaning set forth in Paragraph 3(b) of Exhibit
B.

     

    “Affiliate”
means,

     

    (a)        
  with respect to any individual Person, any member of the Immediate
Family of such Person or a trust established for the benefit of such member,
or

     

    (b)          with
respect to any Entity, any Person which, directly or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control
with, any such Entity. For purposes of this definition, “control,” when used
with respect to a any Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

     

    “Agreement”
means this Amended and Restated Agreement of Limited Partnership, as originally
executed and as amended, supplemented or restated from time to time, as the
context requires.

     

    “Allocable
Capital Contributions” means, as determined as of the Distribution Date
with respect to any Real Estate Asset, the amount of Capital Contributions of
each Partner allocable to funding such Real Estate Asset, as reasonably
determined by the General Partner.

     

    “Allocable
Expenses” means, as determined as of the Distribution Date, a
proportionate share of the Expenses, which shall be determined by multiplying
total Expenses with respect to which a distribution was not previously made to
the Partners by the Apportionment Percentage.

     

    “Apportionment
Percentage” means as of each Distribution Date, a fraction, the numerator
of which is the aggregate Allocable Capital Contributions used to fund the Real
Estate Asset giving rise to any distribution as of such date and the denominator
of which is the aggregate Allocable Capital Contributions used to fund all Real
Estate Assets for which Allocable Capital Contributions have not been returned
pursuant to Section
5.1(a)(i) and 5.1(a)(ii).

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Articles
of Incorporation” means the General Partner’s Articles of Incorporation,
filed with the Maryland State Department of Assessments and Taxation, or other
organizational document governing the General Partner, as amended, supplemented
or restated from time to time.

     

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

     

    “Available
Cash” means, with respect to the applicable period of measurement (i.e., any period
(other than the first period in which this calculation of Available Cash is
being made) beginning on the first day of the fiscal year, quarter or other
period commencing immediately after the last day of the fiscal year, quarter or
other applicable period for purposes of the prior calculation of Available Cash
for or with respect to which a distribution has been made, and ending on the
last day of the fiscal year, quarter or other applicable period immediately
preceding the date of the calculation), the excess, if any, as of such date,
of

     

    (a)           the
gross cash receipts of the Partnership for such period from all sources
whatsoever, including the following:

     

    (i)       
    all rents, revenues, income and proceeds derived by the
Partnership from its operations, including distributions received by the
Partnership from any Entity in which the Partnership has an
interest;

     

    (ii)           all
proceeds and revenues received by the Partnership on account of any sales or
redemptions of any Partnership Real Estate Assets or as a refinancing of or
payment of principal, interest, costs, fees, penalties or otherwise on account
of any borrowings or loans made by the Partnership or financings or refinancings
of any Real Estate Assets or property of the Partnership, but not including any
proceeds from a sale transaction if such proceeds are reinvested by the
Partnership in one or more Real Estate Assets within 180 days
thereafter;

     

    (iii)          the
amount of any insurance proceeds and condemnation awards received by the
Partnership;

     

    (iv)          all
Capital Contributions and loans received by the Partnership from its
Partners;

     

    (v)           all
cash amounts previously reserved by the Partnership, to the extent such amounts
are no longer needed for the specific purposes for which such amounts were
reserved; and

     

    (vi)          the
proceeds of liquidation of the Partnership’s property in accordance with this
Agreement;

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    over

     

    (b)          the
sum of the following:

     

    (i)
           all
operating costs and expenses, including taxes and other expenses of the assets
directly and indirectly held by the Partnership and capital expenditures made
during such period (without deduction, however, for any capital expenditures,
charges for Depreciation or other expenses not paid in cash or expenditures from
reserves described in clause (viii) below);

     

    (ii)           all
costs and expenses expended or paid during such period in connection with the
sale or other disposition, or financing or refinancing, of the property directly
or indirectly held by the Partnership or the recovery of insurance or
condemnation proceeds;

     

    (iii)          all
fees provided for under this Agreement;

     

    (iv)          all
debt service, including principal and interest, paid during such period on all
indebtedness (including under any line of credit) of the
Partnership;

     

    (v)           all
capital contributions, advances, reimbursements, loans or similar payments made
to any Person in which the Partnership has an interest;

     

    (vi)          all
loans made by the Partnership in accordance with the terms of this
Agreement;

     

    (vii)         all
reimbursements to the General Partner or its Affiliates during such period;
and

     

    (viii)        the
amount of any new reserve or reserves or increase in reserves established during
such period which the General Partner determines is necessary or appropriate in
its sole and absolute discretion.

     

    Notwithstanding
the foregoing, Available Cash shall not include any cash received or reductions
in reserves, or take into account any disbursements made or reserves
established, after commencement of the dissolution and liquidation of the
Partnership.

     

    “Business
Combination” has the meaning set forth in Section
7.1(a)(iii)(C).

     

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

     

    “Capital
Account” means with respect to any Partner, the Capital Account
maintained for such Partner in accordance with the following
provisions:

     

    (a)           to
each Partner’s Capital Account there shall be credited:

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (i) 
          such Partner’s
Capital Contributions;

     

    (ii)           such
Partner’s distributive share of Net Income and any items in the nature of income
or gain which are specially allocated to such Partner pursuant to Paragraphs 1
and 2 of Exhibit
B; and

     

    (iii)          the
amount of any Partnership liabilities assumed by such Partner or which are
secured by any asset distributed to such Partner;

     

    (b)          to
each Partner’s Capital Account there shall be debited:

     

    (i)           
the amount of cash and the Gross Asset Value of any property distributed to such
Partner pursuant to any provision of this Agreement;

     

    (ii)           such
Partner’s distributive share of Net Losses and any items in the nature of
expenses or losses which are specially allocated to such Partner pursuant to
Paragraphs 1 and 2 of Exhibit B;
and

     

    (iii)          the
amount of any liabilities of such Partner assumed by the Partnership or which
are secured by any asset contributed by such Partner to the Partnership;
and

     

    (c)           if
all or a portion of a Partnership Interest is transferred in accordance with the
terms of this Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent it relates to the transferred Partnership
Interest.

     

    The
foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Sections 1.704-1(b)
and 1.704-2 of the Regulations, and shall be interpreted and applied in a manner
consistent with such Regulations. If the General Partner shall reasonably
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including debits or credits relating to
liabilities which are secured by contributed or distributed assets or which are
assumed by the Partnership, the General Partner or any Limited Partner) are
computed in order to comply with such Regulations, the General Partner may make
such modification; provided, however, that all
allocations of Partnership income, gain, loss and deduction continue to have
“substantial economic effect” within the meaning of Section 704(b) of the Code
and that no Limited Partner is materially adversely affected by any such
modification.

     

    “Capital
Contribution” means, with respect to any Partner, any cash, cash
equivalents or the Gross Asset Value of property (net of any liabilities secured
by contributed property that the Partnership is considered to assume or take
subject to under Section 752 of the Code) which such Partner contributes or is
deemed to contribute to the Partnership pursuant to Article
4.

     

    “Capital
Transaction” means (a) any sale, or other disposition (other than a
deemed disposition pursuant to Section 708(b)(1)(B) of the Code and the
Regulations thereunder) of (i) a Real Estate Asset of the Partnership, (ii) all
or substantially all of the Real Estate Assets and other assets and properties
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 Real
Estate Assets and other assets and properties of the Partnership, or (iii) all
or substantially all the interests in the Partnership; (b) any merger of the
Partnership, or any subsidiary or joint venture through which the Partnership
owns unimproved or improved real property, with or into another person, or (c)
any other transaction or series of transactions determined to be a Capital
Transaction in the reasonable discretion of General Partner.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    “Cash
Amount” means an amount of cash per Partnership Unit equal to the value
of one share of Common Stock as determined under the applicable Exchange Rights
Agreement on the Valuation Date of the Class A Common Stock Amount.

     

    “Cash
Available for Distribution” means the Available Cash including Available
Cash attributable to a Capital Transaction.

     

    “Certificate”
has the meaning set forth in the Recitals.

     

    “Claims”
has the meaning set forth in the Section
7.6(a)(i).

     

    “Class A
Common Stock” means the Class A Common Stock of the General Partner, $.01
par value per share.

     

    “Class A
Common Stock Amount” means that number of shares of Class A Common Stock
equal to the product of (a) the number of Partnership Units offered for exchange
by an exchanging Partner, multiplied by (b) the
Exchange Factor as of the Valuation Date; provided, however, that if the General Partner
or the Partnership issues to all holders of Class A Common Stock rights,
options, warrants or convertible, exercisable or exchangeable securities
entitling the Stockholders to subscribe for or purchase Class A Common Stock or
any other securities or property (collectively, the “rights”), then the
Class A Common Stock Amount shall also include the rights that a holder of that
number of shares of Class A Common Stock would be entitled to receive, to the
extent such rights have not expired as of the Valuation Date.

     

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

     

    “Common
Stock” means the common stock of the General Partner, $.01 par value per
share. Common Stock may be issued in one or more classes or series in accordance
with the terms of the Articles of Incorporation. If there is more than one class
or series of Common Stock, the term “Common Stock” shall, as the context
requires, be deemed to refer to the class or series of Common Stock that
correspond to the class or series of Partnership Interests for which the
reference to Common Stock is made.

     

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

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    “Consent
of the Limited Partners” means the Consent of Limited Partners (excluding
for this purpose any Partnership Interests held by the General Partner, any
other Person of which the General Partner owns or controls more than 66 2/3% of
the voting interests and any Person directly or indirectly owning or controlling
more than 66 2/3% of the outstanding voting interests of the General Partner)
holding Percentage Interests that are greater than 50% of the aggregate
Percentage Interests of all Limited Partners who are not excluded for the
purposes hereof.

     

    “Contributed
Property” means each property, partnership interest, contract right or
other asset, in such form as may be permitted by the Act, contributed or deemed
contributed to the Partnership by any Partner, including any interest in any
successor partnership occurring as a result of a termination of the Partnership
pursuant to Section 708 of Code.

     

    “Debt”
means, as to any Person, as of any date of determination and without
duplication, (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services; (b) all amounts owed by
such Person to banks or other Persons in respect of reimbursement obligations
under letters of credit, surety bonds and other similar instruments guaranteeing
payment or other performance of obligations by such Person; (c) 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 (d) obligations of
such Person incurred in connection with entering into a lease which, in
accordance with GAAP, should be capitalized.

     

    “Depreciation”
means, with respect to any asset of the Partnership for any fiscal year or other
period, the depreciation, depletion, amortization or other cost recovery
deduction, as the case may be, allowed or allowable for federal income tax
purposes in respect of such asset for such fiscal year or other period; provided, however, that except
as otherwise provided in Section 1.704-2 of the Regulations, if there is a
difference between the Gross Asset Value (including the Gross Asset Value, as
increased pursuant to paragraph (d) of the definition of Gross Asset Value) and
the adjusted tax basis of such asset at the beginning of such fiscal year or
other period, Depreciation for such asset shall be an amount that bears the same
ratio to the beginning Gross Asset Value of such asset as the federal income tax
depreciation, depletion, amortization or other cost recovery deduction for such
fiscal year or other period bears to the beginning adjusted tax basis of such
asset; provided
further, however, that if the
federal income tax depreciation, depletion, amortization or other cost recovery
deduction for such asset for such fiscal year or other period is zero,
Depreciation of such asset shall be determined with reference to the beginning
Gross Asset Value of such asset using any reasonable method selected by the
General Partner.

     

    “Distribution
Date” has the meaning set forth in Section
5.1(a).

     

    “Effective
Date” means the date upon which the Registration Statement relating to
the General Partner’s public offering of Class A Common Stock has been declared
effective by the Securities and Exchange Commission.

     

    “Entity”
means any general partnership, limited partnership, corporation, joint venture,
trust, business trust, real estate investment trust, limited liability company,
limited liability partnership, cooperative or association.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time (or any corresponding provisions of succeeding laws).

     

    “Exchange
Factor” means 1.0; provided, however, that if the General
Partner:  (a) declares or pays a dividend on its outstanding
Class A Common Stock in Class A Common Stock or makes a distribution to all
holders of its outstanding Class A Common Stock in Class A Common Stock; (b)
subdivides its outstanding Class A Common Stock; or (c) combines its outstanding
Class A Common Stock into a smaller number of shares of Class A Common Stock,
the Exchange Factor shall be adjusted by multiplying the Exchange Factor by a
fraction, the numerator of which shall be the number of shares of Class A Common
Stock issued and outstanding on the record date for such dividend, contribution,
subdivision or combination (assuming for such purpose that such dividend,
distribution, subdivision or combination has occurred as of such time), and the
denominator of which shall be the actual number of shares of Class A Common
Stock (determined without the above assumption) issued and outstanding on the
record date for such dividend, distribution, subdivision or combination; provided further, however, that if an
Entity other than an Affiliate of the General Partner shall become General
Partner pursuant to any merger, consolidation or combination of the General
Partner with or into another Entity (the “Successor
Entity”), the Exchange Factor shall be adjusted by multiplying the
Exchange Factor by the number of shares of the Successor Entity in which one
share of Class A Common Stock is converted pursuant to such merger,
consolidation or combination, determined as of the date of such merger,
consolidation or combination. Any adjustment to the Exchange Factor shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event.

     

    “Exchange
Right” means the exchange right of a Limited Partner described in Section 8.6 and to be
set forth in one or more Exchange Rights Agreements.

     

    “Exchange
Rights Agreements” has the meaning set forth in Section
8.6.

     

    “Expenses”
means (a) all organizational, administrative and operating costs and expenses
incurred by the Partnership, including the asset management fee payable to the
General Partner’s investment advisor, and (b) all REIT Offering Expenses; provided, however, that
“Expenses” shall excluded any such expenses used to fund a Real Estate Asset and
included in such Real Estate Assets’ Allocable Capital
Contribution.

     

    “GAAP”
means United States generally accepted accounting principles in effect on the
effective date of the Registration Statement.

     

    “General
Partner” means Preferred Apartment Communities, Inc., a Maryland
corporation, and any successor as general partner of the
Partnership.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    “General
Partner Expenses” means (a) costs and expenses relating to the formation
and continuity of existence and operation of the General Partner and any
Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be included
within the definition of General Partner), including taxes, fees and assessments
associated therewith, any and all costs, expenses or fees payable to any
director, officer or employee of the General Partner, (b) costs and expenses
relating to any public offering and registration, or private offering, of
securities by the General Partner, and all statements, reports, fees and
expenses incidental thereto, including underwriting discounts and commissions
applicable to any such offering of securities, and any costs and expenses
associated with any claims made by any holders of such securities or any
underwriters or placement agents thereof, (c) costs and expenses associated with
the repurchase of any securities of the General Partner, (d) costs and expenses
associated with the preparation and filing of any periodic report or other
reports or communications by the General Partner under federal, state or local
laws or regulations, including filings with the Securities and Exchange
Commission and any securities exchange, (e) costs and expenses associated with
compliance by the General Partner with laws, rules and regulations promulgated
by any regulatory body, including the Securities and Exchange Commission and any
securities exchange, (f) costs and expenses associated with any 401(k) plan,
incentive plan, bonus plan or other plan providing for compensation for the
officers, directors or employees of the General Partner or its Affiliates,
(g) costs and expenses incurred by the General Partner relating to any
issuing or redemption of Partnership Interests and (h) all other operating or
administrative costs of the General Partner incurred in the ordinary course of
its business on behalf of or in connection with the Partnership.

     

    “General
Partner Interest” means a Partnership Interest held by the General
Partner, in its capacity as general partner. A General Partner Interest may be
expressed as a number of Partnership Units.

     

    “Gross
Asset Value” means, with respect to any asset of the Partnership, such
asset’s adjusted basis for federal income tax purposes, except as
follows:

     

    (a)          the
initial Gross Asset Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset, without
reduction for liabilities, as determined by the contributing Partner and the
Partnership on the date of contribution thereof;

     

    (b)          if
the General Partner determines that an adjustment is necessary or appropriate to
reflect the relative economic interests of the Partners, the Gross Asset Values
of all Partnership assets shall be adjusted in accordance with Sections
1.704-1(b)(2)(iv)(f) and (g) of the Regulations to equal their respective gross
fair market values, without reduction for liabilities, as reasonably determined
by the General Partner, as of the following times:

     

    (i) 
          a Capital
Contribution (other than a de
minimis Capital Contribution) to the Partnership by a new or existing
Partner as consideration for a Partnership Interest; or

     

    (ii)           the
distribution by the Partnership to a Partner of more than a de minimis amount of
Partnership assets as consideration for the repurchase of a Partnership
Interest; or

     

    (iii)          the
liquidation of the Partnership within the meaning of Section
1.704-1(b)(2)(ii)(g) of the Regulations;

     

    (c)           the
Gross Asset Values of Partnership assets distributed to any Partner shall be the
gross fair market values of such assets (taking Section 7701(g) of the Code into
account) without reduction for liabilities, as determined by the General Partner
as of the date of distribution; and

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (d)           the
Gross Asset Values of Partnership assets shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such assets pursuant to
Sections 734(b) or 743(b) of the Code, but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Section 1.704-1(b)(2)(iv)(m) of the Regulations (as set forth in Exhibit B); provided, however, that Gross
Asset Values shall not be adjusted pursuant to this paragraph (d) to the extent
that the General Partner determines that an adjustment pursuant to paragraph (b)
above is necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this paragraph (d).

     

    At all
times, Gross Asset Values shall be adjusted by any Depreciation taken into
account with respect to the Partnership’s assets for purposes of computing Net
Income and Net Loss.

     

    “Immediate
Family” means, as to any natural Persons;  (i) any of such
Person’s parents and siblings, spouse and descendants and any of the spouses of
such descendants (collectively, the “Individual
Group”), (ii) any trust, the beneficiaries of which consist exclusively
of one or more members of the Individual Group (collectively, the “Family
Trusts”), and (iii) any entity which is controlled by, directly or
indirectly, one or more members of the Individual Group and/or one or more of
the Family Trusts.

     

    “Incapacity”
or “Incapacitated”
means,

     

    (a)           as
to any individual who is a Partner, death, total physical disability or entry by
a court of competent jurisdiction adjudicating him incompetent to manage his
person or his estate;

     

    (b)          
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;

     

    (c)           as
to any partnership which is a Partner, the dissolution and commencement of
winding up of the partnership;

     

    (d)           as
to any limited liability company which is a Partner, the dissolution and
commencement of winding up of the limited liability company;

     

    (e)           as
to any estate which is a Partner, the distribution by the fiduciary of the
estate’s entire interest in the Partnership;

     

    (f)           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

     

    (g)           as
to any Partner, the bankruptcy of such Partner, which shall be deemed to have
occurred when:

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (i)           
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;

     

    (ii)           the
Partner is adjudged as bankrupt or insolvent, or a final and nonappealable order
for relief under any bankruptcy, insolvency or similar law now or hereafter in
effect has been entered against the Partner;

     

    (iii)          the
Partner executes and delivers a general assignment for the benefit of the
Partner’s creditors;

     

    (iv)          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 (ii) above;

     

    (v)           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;

     

    (vi)         
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 120 days after the
commencement thereof;

     

    (vii)         the
appointment without the Partner’s consent or acquiescence of a trustee, receiver
or liquidator has not been vacated or stayed within 90 days of such appointment;
or

     

    (viii)        an
appointment referred to in clause (vii) which has been stayed is not vacated
within 90 days after the expiration of any such stay.

     

    “include”,
“includes”
and “including”
shall be construed as if followed by the phrase “without
limitation”.

     

    “Indemnitee”
means

     

    (a)          any
Person made a party to a proceeding by reason of:

     

    (i)
           its
status as the General Partner or Liquidator,

     

    (ii)           its
status as a Limited Partner,

     

    (iii)          its
status as an investment advisor to the General Partner,

     

    (iv)          its
status as a trustee, director or officer of the Partnership, the General
Partner, or the investment advisor to the General Partner,

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (v)           its
status as a director, trustee, member or officer of any other Entity, each
Person serving in such capacity at the request of the Partnership or the General
Partner, or

     

    (vi)          his
or its liabilities, pursuant to a loan guarantee or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership (including
any indebtedness which the Partnership or any Subsidiary of the Partnership has
assumed or taken assets subject to); and

     

    (b)           such
other Persons (including Affiliates of the General Partner, a Limited Partner or
the Partnership) as the General Partner may designate from time to time (whether
before or after the event giving rise to potential liability), in its sole and
absolute discretion.

     

    “Initial
Limited Partner” means Preferred Apartment Advisors, LLC, a Delaware
limited liability company.

     

    “IRS”
shall mean the Internal Revenue Service of the United States (or any successor
organization).

     

    “Liability
Shortfall” has the meaning set forth in Paragraph 3(d) of Exhibit
B.

     

    “Lien”
means any lien, security interest, mortgage, deed of trust, charge, claim,
encumbrance, pledge, option, right of first offer or first refusal and any other
right or interest of others of any kind or nature, actual or contingent, or
other similar encumbrance of any nature whatsoever.

     

    “Limited
Partner” means, prior to the admission of the first Additional Limited
Partner to the Partnership, the Initial Limited Partner, and thereafter any
Person named as a Limited Partner in Exhibit A, as such
Exhibit may be amended from time to time, upon the execution and delivery by
such Person of an additional limited partner signature page, or any Substituted
Limited Partner or Additional Limited Partner, in such Person’s capacity as a
Limited Partner of the Partnership.

     

    “Limited
Partner Interest” means a Partnership Interest of a Limited Partner in
the Partnership representing a fractional part of the Partnership Interests of
all Partners and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled, as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement. A Limited Partner Interest may be expressed as a number of
Partnership Units.

     

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

     

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

     

    “Management
Agreement” means the Management Agreement dated as
of           , 2010,
among the Partnership and the General Partner, as advisees, and the Initial
Limited Partner, as advisor, as the same may be amended, supplemented or
restated from time to time.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    “Net
Income” or “Net
Loss” means, for each fiscal year or other applicable period, an amount
equal to the Partnership’s taxable income or loss for such year or period as
determined for federal income tax purposes by the General Partner, 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) of the Code shall be included in taxable income or loss),
adjusted as follows:

     

    (a)           by
including as an item of gross income any tax-exempt income received by the
Partnership and not otherwise taken into account in computing Net Income or Net
Loss;

     

    (b)          
by treating as a deductible expense any expenditure of the Partnership described
in Section 705(a)(2)(B) of the Code (or which is treated as a Section
705(a)(2)(B) expenditure pursuant to Section 1.704-1(b)(2)(iv)(i) of the
Regulations) and not otherwise taken into account in computing Net Income or Net
Loss, including amounts paid or incurred to organize the Partnership (unless an
election is made pursuant to Section 709(b) of the Code) or to promote the sale
of interests in the Partnership and by treating deductions for any losses
incurred in connection with the sale or exchange of Partnership property
disallowed pursuant to Section 267(a)(1) or 707(b) of the Code as expenditures
described in Section 705(a)(2)(B) of the Code;

     

    (c)           by
taking into account Depreciation in lieu of depreciation, depletion,
amortization and other cost recovery deductions taken into account in computing
taxable income or loss;

     

    (d)           by
computing gain or loss resulting from any disposition of Partnership property
with respect to which gain or loss is recognized for federal income tax purposes
by reference to the Gross Asset Value of such property rather than its adjusted
tax basis;

     

    (e)           if
an adjustment of the Gross Asset Value of any Partnership asset which requires
that the Capital Accounts of the Partnership be adjusted pursuant to Sections
1.704-1(b)(2)(iv)(e), (f) and (g) of the Regulations, by taking into account the
amount of such adjustment as if such adjustment represented additional Net
Income or Net Loss pursuant to Exhibit B;
and

     

    (f)           by
not taking into account in computing Net Income or Net Loss items separately
allocated to the Partners pursuant to Paragraphs 2 and 3 of Exhibit
B.

     

    “Nonrecourse
Deductions” has the meaning set forth in Sections 1.704-2(b)(1) and
1.704-2(c) of the Regulations.

     

    “Nonrecourse
Liabilities” has the meaning set forth in Section 1.704-2(b)(3) of the
Regulations.

     

    “Offer”
has the meaning set forth in Section
11.2(c)(i).

     

    “Original
Agreement” has the meaning set forth in the Recitals.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    “Partner”
means the General Partner or a Limited Partner, and “Partners” means the General
Partner and the Limited Partners collectively.  Solely for purposes of
Exhibit B,
“Partner” shall include the Special Limited Partner.

     

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

     

    “Partner
Nonrecourse Debt Minimum Gain” means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Section 1.704-2(i)(3) of the
Regulations.

     

    “Partner
Nonrecourse Deductions” has the meaning set forth in Sections
1.704-2(i)(1) and (2) of the Regulations, 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 Section 1.704-2(i)(2)
of the Regulations.

     

    “Partnership”
means the limited partnership formed under the Act and pursuant to this
Agreement, and any successor thereto.

     

    “Partnership
Interest” means an ownership interest in the Partnership representing a
Capital Contribution 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. A
Partnership Interest may be expressed as a number of Partnership
Units.

     

    “Partnership
Minimum Gain” has the meaning set forth in Section 1.704-2(b)(2) of the
Regulations, 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 Section 1.704-2(d) of
the Regulations.

     

    “Partnership
Record Date” means the record date established by the General Partner for
a distribution pursuant to Section 5.1(a), which
record date shall be the same as the record date established by the General
Partner for a distribution to its Stockholders of some or all of its portion of
such distribution.

     

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

     

    “Partnership
Year” means the fiscal year of the Partnership, as set forth in Section
9.2.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    “Percentage
Interest” means, as to a Partner, the fractional part of the Partnership
Interests owned by such Partner and expressed as a percentage as specified in
Exhibit A, as
such Exhibit may be amended from time to time.

     

    “Permitted
Transferee” means any person to whom Partnership Units are Transferred in
accordance with Section
11.3.

     

    “Person”
means an individual or Entity.

     

    “Precontribution
Gain” has the meaning set forth in subparagraph 3(c) of Exhibit
B.

     

    “Preferred
Return” means a cumulative, non-compounded rate of return equal to seven
percent (7%) per annum with respect to all returns of capital.

     

    “Quarter”
means each of the three-month periods ending on March 31, June 30, September 30
and December 31.

     

    “Real
Estate Assets” means any investment by the Partnership in unimproved and
improved real property (including fee or leasehold interests, options and
leases) or mortgage or real estate-related note, directly, through one or more
subsidiaries or through a joint venture.

     

    “Realized
Investments” means those Real Estate Assets then and previously disposed
of including in any Capital Transactions.

     

    “Registration
Statement” means the Registration Statement on Form S-11 filed by the
General Partner with the Securities and Exchange Commission, and any amendments
thereof at any time made, relating to the Class A Common Stock.

     

    “Regulations”
means the final, temporary or proposed income tax regulations promulgated under
the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

     

    “Regulatory
Allocations” means the allocations set forth in Paragraph 2 of Exhibit
B.

     

    “REIT”
means a real estate investment trust as defined in Section 856 of the
Code.

     

    “REIT
Offering Expenses” has the meaning set forth in Section
4.4.

     

    “REIT
Requirements” has the meaning set forth in Section
5.2.

     

    “Safe
Harbors” has the meaning set forth in Section
11.6(f).

     

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

     

    “Special
Limited Partner” means Preferred Apartment Advisors, LLC, a Delaware
limited liability company, which shall be a limited partner of the Partnership
and recognized as such under applicable Delaware law, but not a Limited Partner
within the meaning of this Agreement.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    “Special
Limited Partner Interest” means the interest of the Special Limited
Partner in the Partnership representing its right as the holder of an interest
in distributions described in Section 5.1(a)(v)(B)
(and any corresponding allocations of income, gain, loss and deduction under
this Agreement).

     

    “Stockholder”
means a holder of Common Stock.

     

    “Subsidiary”
means, with respect to any Person, any corporation, partnership, limited
liability company or other entity of which a majority of (a) the voting power of
the voting equity securities, or (b) the outstanding equity interests (whether
or not voting), 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.

     

    “Surviving
General Partner” has the meaning set forth in Section
11.2(d)(i)(A).

     

    “Tax
Allocations” means the allocations set forth in Paragraph 4 of Exhibit
B.

     

    “Tax
Items” has the meaning set forth in Paragraph 3(a) of Exhibit
B.

     

    “Transaction”
has the meaning set forth in Section
11.2(c).

     

    “Transfer”
as a noun, means any sale, assignment, conveyance, pledge, hypothecation, gift,
encumbrance or other transfer, and as a verb, means to sell, assign, convey,
pledge, hypothecate, give, encumber or otherwise transfer.

     

    “Valuation
Date” means the date of receipt by the Partnership and the General
Partner of notice from an exchanging Partner that such Partner is exercising its
Exchange Rights or, if such date is not a Business Day, the first Business Day
thereafter.

     

    Certain
additional terms and phrases have the meanings set forth in Exhibit
B.

     

    ARTICLE
2

    ORGANIZATIONAL
MATTERS

    

    
      	
              2.1

            	
              Formation

            

    

     

    The
General Partner has formed the Partnership by filing the Certificate on May
13, 2010 in the office of the Delaware Secretary of State.  The
Partnership is a limited partnership organized pursuant to the provision of the
Act and upon the terms and conditions set forth in this
Agreement.  Except as expressly provided herein to the contrary, the
rights and obligations of the Partners and 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.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    
      	
              2.2

            	
              Name

            

    

     

    The name
of the Partnership is Preferred Apartment Communities 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”,
“Ltd.” or similar words, phrases 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 and shall notify the
Limited Partners of such change in the next regular communication to the Limited
Partners.

     

    
      	
              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 Service Company, 2711
Centerville Road Suite 400, Wilmington, Delaware 19808. The principal office of
the Partnership shall be 3625 Cumberland Boulevard, Suite 400, Atlanta, Georgia
30339, 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.

     

    
      	
              2.4

            	
              Power of
      Attorney

            

    

     

    (a)           Each
Limited Partner and each Assignee who accepts Partnership Units (or any rights,
benefits or privileges associated therewith) is deemed to irrevocably constitute
and appoint the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorney-in-fact,
with full power and authority in its name, place and stead to:

     

    (i)           execute,
swear to, acknowledge, deliver, file and record in the appropriate public
offices:

     

    (A)        
all certificates, documents and other instruments (including this Agreement and
the Certificate and all amendments 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) in the State of Delaware and in all other jurisdictions in which the
Partnership may or plans to conduct business or own property, including any
documents necessary or advisable to convey any Contributed Property to the
Partnership;

     

    (B)          all
instruments that the General Partner or any Liquidator deems appropriate or
necessary to reflect any amendment, change, modification or restatement of this
Agreement in accordance with its terms;

     

    (C)          all
conveyances and other instruments or documents that the General Partner or any
Liquidator deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement,
including a certificate of cancellation;

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    (D)          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 or the Capital
Contribution of any Partner;

     

    (E)           all
certificates, documents and other instruments relating to the determination of
the rights, preferences and privileges of Partnership Interest; and

     

    (F)           amendments
to this Agreement as provided in Article 14;
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 or as may
be otherwise expressly provided for in this Agreement.

     

    (b)        (i)         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 Limited
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
Partnership Units and shall extend to such Limited Partner’s or Assignee’s
heirs, successors, assigns and personal representatives.

     

    (ii)           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.

     

    (iii)          Each
Limited Partner or Assignee shall execute and deliver to the General Partner or
the Liquidator, within 15 days after receipt of the General Partner’s or
Liquidator’s request therefore, 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.

     

    (c)           For
the purposes of this Section 2.4, the term
“Limited Partner” shall be deemed to include the Special Limited Partner, unless
the context otherwise requires.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    
      	
              2.5

            	
              Term

            

    

     

    The term
of the Partnership shall commence on the date hereof and shall continue until
December 31, 2099, unless the Partnership is dissolved sooner pursuant to the
provisions of Article
13 or as otherwise provided by law.

     

    ARTICLE
3

    PURPOSE

    

    
      	
              3.1

            	
              Purpose and
      Business

            

    

     

    (a)          The
purpose and nature of the business to be conducted by the Partnership is to
conduct any business that may be lawfully conducted by a limited partnership
organized pursuant to the Act, including to engage in the following
activities:

     

    (i)           to
acquire, hold, own, develop, construct, improve, maintain, operate, sell, lease,
transfer, encumber, convey, exchange, and otherwise dispose of or deal with the
assets described in the prospectus contained in the Registration
Statement;

     

    (ii)           to
acquire, hold, own, develop, construct, improve, maintain, operate, sell, lease,
transfer, encumber, convey, exchange, and otherwise dispose of or deal with real
and personal property of all kinds;

     

    (iii)          to
enter into any partnership, joint venture, corporation, limited liability
company, trust or other similar arrangement to engage in any of the
foregoing;

     

    (iv)          to
undertake such other activities as may be necessary, advisable, desirable or
convenient to the business of the Partnership; and

     

    (v)           to
engage in such other ancillary activities as shall be necessary or desirable to
effectuate the foregoing purposes;

     

    provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
General Partner at all times to be classified as a REIT, unless the General
Partner determines not to qualify as a REIT or ceases to qualify as a REIT for
any reason not related to the business conducted by the
Partnership.

     

    (b)           The
Partnership shall have all powers necessary or desirable to accomplish the
purposes enumerated.

     

    
      	
              3.2

            	
              Powers

            

    

     

    (a)           The
Partnership is empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes and business described herein and for the
protection and benefit of the Partnership, including full power and authority to
enter into, perform and carry out contracts of any kind, to borrow money and to
issue evidences of indebtedness, whether or not secured by a Lien, and, directly
or indirectly, to acquire, own, manage, improve, develop and construct real
property, and lease, sell, transfer and dispose of real property; 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,

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    (i)           
could adversely affect the ability of the General Partner to continue to qualify
as a REIT, unless the General Partner otherwise ceases to qualify as a
REIT;

     

    (ii)           could
subject the General Partner to any additional taxes under Section 857 or Section
4981 of the Code; or

     

    (iii)          could
violate any law or regulation of any governmental body or agency having
jurisdiction over the General Partner or its securities, unless such action (or
inaction) shall have been specifically consented to by the General Partner in
writing.

     

    (b)           The
General Partner also is empowered to do any and all acts and things necessary,
appropriate or advisable to ensure that the Partnership will not be classified
as a “publicly traded partnership” for the purposes of Section 7704 of the Code,
including but not limited to imposing restrictions on exchanges of Partnership
Units.

     

    ARTICLE
4

    CAPITAL
CONTRIBUTIONS

    

    
      	
              4.1

            	
              Capital Contributions
      of the Partners

            

    

     

    (a)           The
General Partner and Initial Limited Partner have made the Capital Contributions
as set forth in Exhibit
A.

     

    (b)           To
the extent the Partnership acquires any property by the merger of any other
Person into the Partnership or the contribution of assets by any other Person,
Persons who receive Partnership Interests in exchange for their interests in the
Person merging into or contributing assets to the Partnership shall become
Limited Partners and shall be deemed to have made Capital Contributions as
provided in the applicable merger agreement or contribution agreement and as set
forth in Exhibit
A, as amended to reflect such deemed Capital Contributions.

     

    (c)           Each
Partner shall own Partnership Units in the amounts set forth for such Partner in
Exhibit A and
shall have a Percentage Interest in the Partnership as set forth in Exhibit A, which
Percentage Interest shall be adjusted in Exhibit A from time
to time by the General Partner to the extent necessary to reflect accurately
exchanges, additional Capital Contributions, the issuance of additional
Partnership Units, transfers of Partnership Units or similar events having an
effect on any Partner’s Percentage Interest.

     

    (d)           The
number of Partnership Units held by the General Partner, in its capacity as
general partner, shall be deemed to be the General Partner
Interest.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    (e)           Except
as otherwise may be expressly provided herein, the Partners shall have no
obligation to make any additional Capital Contributions or provide any
additional funding to the Partnership (whether in the form of loans, repayments
of loans or otherwise) and no Partner shall have any obligation to restore any
deficit that may exist in its Capital Account, either upon a liquidation of the
Partnership or otherwise.

     

    
      	
              4.2

            	
              Additional Funds;
      Restrictions on the General
Partner

            

    

     

    (a)         (i)          The
sums of money required to finance the business and affairs of the Partnership
shall be derived from the initial Capital Contributions made to the Partnership
by the Partners as set forth in Section 4.1 and from
funds generated from the operation and business of the Partnership, including
rents and distributions directly or indirectly received by the Partnership from
any Subsidiary.

     

    (ii)           If
additional financing is needed from sources other than as set forth in Section 4.2(a)(i) for
any reason, the General Partner may, in its sole and absolute discretion, in
such amounts and at such times as it solely shall determine to be necessary or
appropriate,

     

    (A)         cause
the Partnership to issue additional Partnership Interests and admit additional
Limited Partners to the Partnership in accordance with Section 4.3;

     

    (B)          make
additional Capital Contributions to the Partnership (subject to the provisions
of Section
4.2(b));

     

    (C)          cause
the Partnership to borrow money, enter into loan arrangements, issue debt
securities, obtain letters of credit or otherwise borrow money on a secured or
unsecured basis;

     

    (D)          make
a loan or loans to the Partnership (subject to Section 4.2(b));
or

     

    (E)           sell
any assets or properties directly or indirectly owned by the
Partnership.

     

    (iii)          In
no event shall any Limited Partners be required to make any additional Capital
Contributions or any loan to, or otherwise provide any financial accommodation
for the benefit of, the Partnership.

     

    (b)          The
General Partner shall not issue any debt securities, any preferred stock or any
common stock (including additional Class A Common Stock (other than (i) the
shares of Class A Common Stock sold pursuant to the Registration Statement or
the private placement described in the Registration Statement, (ii) as payment
of the Class A Common Stock Amount, or (iii) in connection with the conversion
or exchange of securities of the General Partner solely in conversion or
exchange for other securities of the General Partner)) or rights, options,
warrants or convertible, exercisable or exchangeable securities containing the
right to subscribe for or purchase any of the foregoing (collectively, “Securities”), other
than to all holders of Class A Common Stock, unless the General Partner
shall:

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    (i)           
in the case of debt securities, lend to the Partnership the proceeds of or
consideration received for such Securities on the same terms and conditions,
including interest rate and repayment schedule, as shall be applicable with
respect to or incurred in connection with the issuance of such Securities and
the proceeds of, or consideration received from, any subsequent exercise,
exchange or conversion thereof (if applicable);

     

    (ii)           in
the case of equity Securities senior or junior to the Class A Common Stock as to
dividends and distributions on liquidation, contribute to the Partnership the
proceeds of or consideration (including any property or other non-cash assets)
received for such Securities and the proceeds of, or consideration received
from, any subsequent exercise, exchange or conversion thereof (if applicable),
and receive from the Partnership, interests in the Partnership in consideration
therefor with the same terms and conditions, including dividend, dividend
priority and liquidation preference, as are applicable to such Securities;
and

     

    (iii)          in
the case of Class A Common Stock or other equity Securities on a parity with the
Class A Common Stock as to dividends and distributions on liquidation,
(including Class A Common Stock or other Securities granted as a stock award to
directors and officers of the General Partner or directors, officers or
employees of its Affiliates in consideration for services or future services,
and Class A Common Stock issued a pursuant to a dividend reinvestment plan or
issued to enable the General Partner make distributions to satisfy the REIT
Requirements), contribute to the Partnership the proceeds of or consideration
(including any property or other non-cash assets, but excluding services)
received for such Securities, if any, and the proceeds of, or consideration
received from, any subsequent exercise, exchange or conversion thereof (if
applicable), and receive from the Partnership a number of additional Partnership
Units in consideration therefor equal to the product of

     

    (A)          the
number of shares of Class A Common Stock or other equity Securities issued by
the General Partner, multiplied by

     

    (B)          a
fraction, the numerator of which is one and the denominator of which is the
Exchange Factor in effect on the date of such contribution.

     

    provided, however, that the
General Partner is allowed to issue additional Securities in connection with an
acquisition of an asset to be held directly by the General Partner, but if and
only if, such direct acquisition and issuance of additional Securities have been
approved by a majority of the independent directors of the General
Partner.  Without limiting the foregoing, the General Partner is
expressly authorized to issue Securities for less than fair market value, and
the General Partner is authorized to cause the Partnership to issue to the
General Partner (or any direct or indirect wholly owned Subsidiary of the
General Partner) corresponding Partnership Units, so long as (x) the General
Partner concludes in good faith that such issuance is in the best interests of
the General Partner and the Partnership, and (y) the General Partner (or any
direct or indirect wholly owned Subsidiary of the General Partner) contributes
all proceeds from any such issuance to the Partnership, including an
issuance of shares of Class A Common Stock pursuant to a share purchase
plan or equity incentive plan providing for purchases of shares of Class A
Common Stock at a discount from fair market value or pursuant to option
awards, including options to purchase shares that have an exercise price that is
less than the fair market value of the shares of Class A Common Stock, either at
the time of issuance or at the time of exercise, and restricted or other share
awards approved by the board of directors of the General
Partner.

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    
      	
              4.3

            	
              Issuance of Additional
      Partnership Interests; Admission of Additional Limited
      Partners

            

    

     

    (a)           In
addition to any Partnership Interests issuable by the Partnership pursuant to
Section 4.2,
the General Partner is authorized to cause the Partnership to issue additional
Partnership Interests (or options therefore) in the form of Partnership Units or
other Partnership Interests in one or more series or classes, or in one or more
series of any such class senior, on a parity with, or junior to the Partnership
Units to any Persons at any time or from time to time, on such terms and
conditions, as the General Partner shall establish in each case in its sole and
absolute discretion subject to Delaware law, including (i) the allocations of
items of Partnership income, gain, loss, deduction and credit to each class or
series of Partnership Interests, (ii) the right of each class or series of
Partnership Interests to share in Partnership distributions, and (iii) the
rights of each class or series of Partnership Interest upon dissolution and
liquidation of the Partnership; provided, however, that no such
Partnership Interests shall be issued to the General Partner
unless:

     

    (i) 
          the Partnership
Interests are issued in connection with the grant, award, or issuance of Class A
Common Stock or other equity interests in the General Partner having
designations, preferences and other rights such that the economic interests
attributable to such Class A Common Stock or other equity interests are
substantially similar to the designations, preferences and other rights (except
voting rights) of the Partnership Interests issued to the General Partner in
accordance with this Section
4.3(a);

     

    (ii)           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, without any approval being required from any Limited
Partner or any other Person; or

     

    (iii)          the
additional Partnership Units are issued in connection with an issuance of shares
of Class A Common Stock or other interests in the General Partner pursuant to a
taxable share dividend declared by the General Partner, which shares or
interests have designations, preferences and other rights, all such that the
economic interests are substantially similar to the designations, preferences
and other rights (other than voting rights) of the additional Partnership Units
issued to the General Partner by the Partnership in accordance with this Section 4.3;
and

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    provided further, however, that such
issuance does not cause the Partnership to become, with respect to any employee
benefit plan subject to Title I of ERISA or 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) of the Code); and such issuance would not cause
any portion of the assets of the Partnership to constitute assets of any
employee benefit plan pursuant to Section 2510.3-101 of the regulations of the
United States Department of Labor, as modified or deemed to be modified by
Section 3(42) of ERISA.

     

    (b)           Subject
to the limitations set forth in Section 4.3(a), the
General Partner may take such steps as it, in its sole and absolute discretion,
deems necessary or appropriate to admit any Person as a Limited Partner of the
Partnership or to issue any Partnership Interests, including amending the
Certificate, Exhibit
A or any other provision of this Agreement.

     

    
      	
              4.4

            	
              Contribution of
      Proceeds of Issuance of Class A Common
  Stock

            

    

     

    In
connection with any offering, grant, award or issuance of Class A Common Stock
or securities, rights, options, warrants or convertible, exercisable or
exchangeable securities pursuant to Section 4.2, the
General Partner shall make aggregate Capital Contributions to the Partnership of
the proceeds raised in connection with such offering, grant, award or issuance,
including any property issued to the General Partner pursuant to a merger or
contribution agreement in exchange for Common Stock; provided, however, that if the
proceeds actually received by the General Partner are less than the gross
proceeds of such offering, grant, award or issuance as a result of any
underwriter’s discount, commission or fee or other expenses paid or incurred in
connection with such offering, grant, award or issuance (the “REIT
Offering Expenses”), then the General Partner shall make a Capital
Contribution to the Partnership in the amount equal to the sum of (a) the net
proceeds of such issuance plus (b) an intangible asset in an amount equal to the
capitalized costs of the General Partner relating to such issuance of Class A
Common Stock.  Upon any such Capital Contribution by the General
Partner, the Capital Account of the General Partner shall be increased by the
amount of its Capital Contribution as described in the previous
sentence.

     

    
      	
              4.5

            	
              Repurchase of Class A
      Common Stock;
Shares-In-Trust

            

    

     

    (a)           If
the General Partner shall elect to purchase from its Stockholders Class A Common
Stock for the purpose of delivering such Class A Common Stock to satisfy an
obligation under any distribution reinvestment plan adopted by the General
Partner, any employee stock purchase plan adopted by the General Partner, or for
any other purpose, the purchase price paid by the General Partner for such Class
A Common Stock and any other expenses incurred by the General Partner 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:

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    (i)        
   if such Class A Common Stock subsequently is to be sold by the
General Partner, the General Partner shall pay to the Partnership any proceeds
received by the General Partner from the sale of such Class A Common Stock
(provided,
however, that
an exchange of Class A Common Stock for Partnership Units pursuant to the
applicable Exchange Rights Agreement would not be considered a sale for such
purposes); and

     

    (ii)           if
such Class A Common Stock is not re-transferred by the General Partner within 30
days after the purchase thereof, the General Partner shall cause the Partnership
to cancel a number of Partnership Units held by the General Partner (as
applicable) equal to the product of

     

    (A)          the
number of shares of such Class A Common Stock, multiplied by

     

    (B)          a
fraction, the numerator of which is one and the denominator of which is the
Exchange Factor in effect on the date of such cancellation.

     

    (b)          If
the General Partner purchases Shares-in-Trust (as from time to time defined in
the Articles of Incorporation, as may be amended from time to time), the
Partnership will purchase from the General Partner a number of Partnership Units
equal to the product of

     

    (i)
           the
number of Shares-in-Trust purchased by the General Partner, multiplied
by

     

    (ii)           a
fraction, the numerator of which is one and the denominator of which is the
Exchange Factor in effect on the date of such purchase.

     

    
      	
              4.6

            	
              No Third-Party
      Beneficiary

            

    

     

    No
creditor or other third party having dealings with the Partnership shall have
the right to enforce the right or obligations of any Partner to make Capital
Contributions or loans or to pursue any other right or remedy hereunder or at
law or in equity, it being understood and agreed that the provisions of this
Agreement shall be solely for the benefit of, and may be enforced solely by, the
parties hereto and their respective successors and assigns.

     

    
      	
              4.7

            	
              No Interest; No
      Return

            

    

     

    (a)           No
Partner shall be entitled to interest on its Capital Contribution or on such
Partner’s Capital Account.

     

    (b)           Except
as provided herein or by law, no Partner shall have any right to demand or
receive the return of its Capital Contribution from the
Partnership.

     

    
      	
              4.8

            	
              No Preemptive
      Rights.

            

    

     

    Subject
to any preemptive rights that may be granted pursuant to Section 4.3, no
Person shall have any preemptive or other similar right with respect
to:

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    (a)           additional
Capital Contributions or loans to the Partnership; or

     

    (b)           issuance
or sale of any Partnership Units or other Partnership Interests.

     

    ARTICLE
5

    DISTRIBUTIONS

    

    
      	
              5.1

            	
              Distributions

            

    

     

    (a)           Cash Available for
Distribution.  Subject to the provisions of Sections 5.3, 5.4 and 13.2, the General
Partner shall cause the Partnership to distribute, at such times as the General
Partner shall determine (each a “Distribution Date”),
an amount of Cash Available for Distribution, determined by the General Partner
in its sole discretion to the Limited Partners and the General Partner, as of
the applicable Partnership Record Date as follows:

     

    (i)           first,
among all Partners in proportion to their respective Percentage Interests until
the Partners have received pursuant to this Section 5.1(a)(i) and
Section
5.1(a)(ii) the amount of their Allocable Capital Contributions with
respect to the Real Estate Asset giving rise to such distribution;

     

    (ii)          second,
among all the Partners in proportion to their respective Percentage Interests
until the Partners have received pursuant to this Section 5.1(a)(ii)
and Section
5.1(a)(i) cumulative amounts equal to the sum of aggregate Allocable
Capital Contributions for all Realized Investments;

     

    (iii)         third,
among all Partners in proportion to their respective Percentage Interests until
the Partners have received pursuant to this Section 5.1(a)(iii)
an amount equal to the sum of the Allocable Expenses;

     

    (iv)          fourth,
among all Partners in proportion to their respective Percentage Interests until
the Partners in the aggregate have received, pursuant to this Section 5.1(a)(iv)
and Section
5.1(a)(v)(B), an amount such that the Preferred Return has been met with
respect to the Allocable Capital Contributions and Allocable Expenses
distributed pursuant to Sections 5.1(a)(i),
5.1(a)(ii) and
5.1(a)(iii);
then

     

    (v)           fifth,
(A) eighty-five percent (85%) among all Partners in proportion to their
respective Percentage Interests and (B) fifteen percent (15%) to the Special
Limited Partner.

     

    (b)           In
no event may any Partner receive a distribution pursuant to this Section 5.1 with
respect to a Partnership Unit if such Partner is entitled to receive a
distribution with respect to Class A Common Stock for which such a Partnership
Unit has been exchanged.

     

    (c)           To
the extent a distribution under Section 5.1(a)(v)(B)
has been paid to the Special Limited Partner for any Real Estate Assets sold
within 60 days prior to the sale of a Real Estate Asset in which the Preferred
Return for that Real Estate Asset was not met, the Special Limited Partner shall
return to the Partnership an amount up to the distribution received for the Real
Estate Assets sold within such 60-day period, which shall be applied to any
Preferred Return shortfall actually arising from the sale of the subsequent Real
Estate Asset.

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    
      	
              5.2

            	
              Qualification as a
      REIT

            

    

     

    The
General Partner shall use its best efforts to cause the Partnership to
distribute sufficient amounts under this Article 5 to enable
the General Partner to pay dividends to the Stockholders that will enable the
General Partner to (a) satisfy the requirements for qualification as a REIT
under the Code and Regulations (“REIT Requirements”),
and (b) avoid any federal income or excise tax liability; provided, however, that the
General Partner shall not be bound to comply with this covenant to the extent
such distributions would (i) violate applicable Delaware law, or (ii) contravene
the terms of any notes, mortgages or other types of debt obligations to which
the Partnership may be subject in conjunction with borrowed funds.

     

    Notwithstanding
the foregoing, the Limited Partners agree that the General Partner may terminate
or revoke its status as a REIT at any time.

     

    
      	
              5.3

            	
              Withholding

            

    

     

    With
respect to any withholding tax or other similar tax liability or obligation to
which the Partnership may be subject as a result of any act or status of any
Partner or the Special Limited Partner or to which the Partnership becomes
subject with respect to any Partnership Unit or the Special Limited Partner
Interest, the Partnership shall have the right to withhold amounts distributable
pursuant to this Article 5 to such
Partner or the Special Limited Partner or with respect to such Partnership Units
or the Special Limited Partner Interest, to the extent of the amount of such
withholding tax or other similar tax liability or obligation pursuant to the
provisions contained in Section 10.5, and the
amount of any withholding shall reduce the right of such Partner or the Special
Limited Partner to future distribution to the extent provided in Section
10.5.

     

    
      	
              5.4

            	
              Additional Partnership
      Interests

            

    

     

    If the
Partnership issues Partnership Interests in accordance with Section 4.2 or 4.3, the distribution
priorities set forth in Section 5.1 shall be
amended, as necessary, to reflect the distribution priority of such Partnership
Interests and corresponding amendments shall be made to the provisions of Exhibit
B.

    
      
         

      

      
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              5.5

            	
              Tax
      Distributions

            

    

     

    The
General Partner, on behalf of the Partnership, shall make, in its sole
discretion and subject to Section 5.2,
distributions of cash to the Special Limited Partner to provide it with funds to
pay applicable federal, state and local income tax liabilities attributable to
Partnership income allocated to it (“Tax Distributions”),
payable within 30 days after the end of each of the first three fiscal quarters
and within 90 days after the end of each fiscal year of the Partnership, in an
aggregate amount equal to the amount, if any, by which (i) the anticipated taxes
with respect to the income attributable to the Special Limited Partner Interest
for such fiscal year, exceeds (ii) the aggregate net cash distributions
attributable to the Special Limited Partner Interest made to the Special Limited
Partner with respect to such fiscal year.  For the purposes of this
Agreement, all calculations of anticipated taxes shall assume the highest
applicable marginal federal, state and local tax rates for an individual
resident, or a corporation doing business, in Atlanta, Georgia, whichever is
higher, for such period, taking into account (i) the character of income or gain
and any allowable United States federal income tax deduction for state and local
taxes, as if such person were not entitled to deduct any expenses that are
deductible by an individual only under Section 212 of the Code, and using such
other reasonable assumptions as the General Partner may determine and (ii) any
carryovers of Partnership capital losses for prior fiscal years (but not other
losses) to the extent such losses would be deductible in determining such
person’s tax liability for such fiscal year, determined by taking into account
only such person’s items of income, gain, loss and deduction attributable to the
Partnership.  The Special Limited Partner may elect to receive less
than the full amount of any cash distribution to which it is otherwise entitled
under this Section
5.5.  All Tax Distributions distributed to the Special Limited
Partner shall offset future distributions payable to the Special Limited Partner
pursuant to Section
5.1.

     

    ARTICLE
6

    ALLOCATIONS

    

    
      	
              6.1

            	
              Allocations

            

    

     

    The Net
Income, Net Loss and other Partnership items shall be allocated pursuant to the
provisions of Exhibit
B.

     

    
      	
              6.2

            	
              Revisions to
      Allocations to Reflect Issuance of Partnership
      Interests

            

    

     

    If the
Partnership issues Partnership Interests to the General Partner or any
additional Limited Partner pursuant to Article 4, the
General Partner shall make such revisions to this Article 6 and Exhibit B as it deems
necessary to reflect the terms of the issuance of such Partnership Interests,
including making preferential allocations to classes of Partnership Interests
that are entitled thereto. Such revisions shall not require the consent or
approval of any other Partner.

     

    ARTICLE
7

    MANAGEMENT
AND OPERATIONS OF BUSINESS

    

    
      	
              7.1

            	
              Management

            

    

     

    (a)          
(i)           Except as
otherwise expressly provided in this Agreement, full, complete and exclusive
discretion to manage and control the business and affairs of the Partnership are
and shall be 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.

     

    (ii)           The
General Partner may not be removed by the Limited Partners with or without
cause.

    
      
         

      

      
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    (iii)          In
addition to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General Partner shall have full
power and authority to do all things deemed necessary or desirable by it to
conduct the business of the Partnership, to exercise all powers set forth in
Section 3.2 and
to effectuate the purposes set forth in Section 3.1,
including:

     

    (A)         (1)         the
making of any expenditures, the lending or borrowing of money, including making
prepayments on loans and borrowing money to permit the Partnership to make
distributions to its Partners in such amounts as will permit the General Partner
(so long as the General Partner qualifies 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 the General Partner to maintain REIT
status,

     

    (2)           the
assumption or guarantee of, or other contracting for, indebtedness and other
liabilities,

     

    (3)           the
issuance of evidence of indebtedness (including the securing of the same by a
Lien or encumbrance on the Partnership’s assets), and

     

    (4)           the
incurring of any obligations it deems necessary for the conduct of the
activities of the Partnership, including the payment of all expenses associated
with the General Partner;

     

    (B)          the
acquisition, purchase, ownership, operation, leasing and disposition of any real
property and any other property or assets, including mortgages and real
estate-related notes, whether directly or indirectly;

     

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

     

    (D)          the
acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or
exchange of all or substantially all of the 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, consolidation or other combination (each a
“Business
Combination”) of the Partnership with or into another Entity on such
terms as the General Partner deems proper; provided, however, that the
General Partner shall be required to send to each Limited Partner a notice of
such proposed Business Combination no less than 15 days prior to the record date
for the vote of the General Partner’s Stockholders on such Business Combination,
if any;

    
      
         

      

      
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    (E)          the
use of the assets of the Partnership (including cash on hand) for any purpose
consistent with the terms of this Agreement and on any terms it sees fit,
including,

     

    (1)           the
financing of the conduct of the operations of the General Partner, the
Partnership or any of the Partnership’s Subsidiaries,

     

    (2)           the
lending of funds to other Persons (including the Subsidiaries of the Partnership
and/or the General Partner) and the repayment of obligations of the Partnership
and its Subsidiaries and any other Person in which it has an equity investment,
and

     

    (3)           the
making of capital contributions to its Subsidiaries;

     

    (F)           the
expansion, development, redevelopment, construction, leasing, repair,
rehabilitation, repositioning, alteration, demolition or improvement of any
property in which the Partnership or any Subsidiary of the Partnership owns an
interest;

     

    (G)          the
negotiation, execution, and performance of any contracts, conveyances or other
instruments that the General Partner considers useful or necessary to the
conduct of the Partnership’s operations or the implementation of the General
Partner’s powers under this Agreement, including contracting with contractors,
developers, consultants, accountants, legal counsel, other professional advisors
and other agents and the payment of their expenses and compensation out of the
Partnership’s assets;

     

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

     

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

     

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

     

    (K)          the
establishment of one or more divisions of the Partnership, the selection and
dismissal of employees of the Partnership (including employees having 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 engagement;

     

    (L)           the
maintenance of such insurance for the benefit of the Partnership and the
Partners and directors and officers thereof as it deems necessary or
appropriate;

    
      
         

      

      
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    (M)         the
formation of, or acquisition of an interest (including non-voting interests in
entities controlled by Affiliates of the Partnership or third parties) in, and
the contribution of property to, any further Entities or other relationships
that it deems desirable, including the acquisition of interests in, and the
contributions of funds or property to, or making of loans to, its Subsidiaries
and any other Person from time to time, or the incurrence of indebtedness on
behalf of such Persons or the guarantee of the obligations of such Persons;
provided, however, that, as
long as the General Partner has determined to elect to qualify as a REIT or to
continue to qualify as a REIT, the Partnership may not engage in any such
formation, acquisition or contribution that would cause the General Partner to
fail to qualify as a REIT;

     

    (N)          the
control of any matters affecting the rights and obligations of the Partnership,
including

     

    (1)           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,

     

    (2)           the
commencement or defense of suits, legal proceedings, administrative proceedings,
arbitration or other forms of dispute resolution, and

     

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

     

    (O)          the
undertaking of any action in connection with the Partnership’s direct or
indirect investment in its Subsidiaries or any other Person (including the
contribution or loan of funds by the Partnership to such Persons);

     

    (P)           the
determination of the fair market value of any Partnership property distributed
in kind using such reasonable method of valuation as the General Partner, in its
sole discretion, may adopt;

     

    (Q)          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;

     

    (R)          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;

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    (S)           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;

     

    (T)          the
making, execution and delivery 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 or appropriate, in the judgment of the General Partner, for
the accomplishment of any of the foregoing;

     

    (U)          the
issuance of additional Partnership Units in connection with Capital
Contributions by Additional Limited Partners and additional Capital
Contributions by Partners pursuant to Article
4;

     

    (V)          the
authorization, issuance, sale, redemption or purchase of any Partnership Units
or any securities of the Partnership;

     

    (W)         the
opening of bank accounts on behalf of, and in the name of, the Partnership and
its Subsidiaries; and

     

    (X)          the
amendment and restatement of Exhibit A 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 Partnership
Units, the admission of any Additional Limited Partner or any Substituted
Limited Partner or otherwise, which amendment and restatement, notwithstanding
anything in this Agreement to the contrary, shall not be deemed an amendment of
this Agreement, as long as the matter or event being reflected in Exhibit A otherwise
is authorized by this Agreement.

     

    (b)          (i)           Each
of the Limited Partners agree 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 to the fullest extent
permitted under the Act or other applicable law, rule or
regulation.

     

    (ii)           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 at the expense of
the Partnership, may or may not, cause the Partnership to obtain and
maintain:

     

    (i) 
          casualty, liability
and other insurance on the assets of the Partnership;

    
      
         

      

      
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    (ii)           liability
insurance for the Indemnitees hereunder; and

     

    (iii)          such
other insurance as the General Partner, in its sole and absolute discretion,
determines to be appropriate and reasonable.

     

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

     

    (e)           (i)            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 (including the General Partner) of any action taken (or not taken) by
it. The General Partner and the Partnership shall not have liability to any
Limited Partner for monetary damages or otherwise for losses sustained,
liabilities incurred or benefits not delivered by such Limited Partner in
connection with such decisions, provided that the General Partner has acted in
good faith pursuant to its authority under this Agreement. The Limited Partners
expressly acknowledge that the General Partner is acting on behalf of the
Partnership, the General Partner, and the General Partner’s Stockholders,
collectively.

     

    (ii)           The
General Partner and the Partnership shall not have liability to the any Limited
Partner or the Special Limited Partner under any circumstances as a result of an
income tax liability incurred by such Limited Partner or the Special Limited
Partner as a result of an action (or inaction) by the General Partner taken
pursuant to its authority under and in accordance with this
Agreement.

     

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

     

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

     

    
      	
              7.2

            	
              Certificate of Limited
      Partnership

            

    

     

    (a)           The
General Partner has previously filed the Certificate with the Secretary of State
of Delaware as required by the Act.

     

    (b)           (i) 
          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.

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    (ii)           To
the extent that such action is determined by the General Partner to be
reasonable and necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate and do all of the things to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of Delaware
and each other state, or the District of Columbia, in which the Partnership may
elect to do business or own property.

     

    (iii)          The
General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate or any amendment thereto to any Limited
Partner.

     

    
      	
              7.3

            	
              Reimbursement of the
      General Partner

            

    

     

    (a)           Except
as provided in this Section 7.3 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)          (i)           
The Partnership shall be responsible for and shall pay all Administrative
Expenses and expenses relating to the Partnership’s ownership of its assets. The
General Partner shall be reimbursed on a monthly basis, or such other basis as
it may determine in its sole and absolute discretion, for all expenses that it
incurs on behalf of the Partnership relating to the ownership and operation of
the Partnership’s assets, or for the benefit of the Partnership, including all
expenses associated with compliance by the General Partner and the Initial
Limited Partner with laws, rules and regulations promulgated by any regulatory
body, expenses related to the operations of the General Partner and to the
management and administration of any Subsidiaries of the General Partner or the
Partnership or Affiliates of the Partnership, such as auditing expenses and
filing fees and any and all salaries, compensation and expenses of officers and
employees of the General Partner, but excluding any portion of expenses
reasonably attributable to assets not owned by or for the benefit of, or to
operations not for the benefit of, the Partnership or Affiliates of the
Partnership; provided, however, 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 in its name.

     

    (ii)           Such
reimbursement shall be in addition to any reimbursement made as a result of
indemnification pursuant to Section
7.6.

     

    (iii)          The
General Partner shall determine in good faith the amount of expenses incurred by
it related to the ownership and operation of, or for the benefit of, the
Partnership. If certain expenses are incurred for the benefit of the Partnership
and other entities (including the General Partner), such expenses will be
allocated to the Partnership and such other entities in such a manner as the
General Partner in its reasonable discretion deems fair and reasonable. All
payments and reimbursements hereunder shall be characterized for federal income
tax purposes as expenses of the Partnership incurred on its behalf, and not as
expenses of the General Partner.

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    (c)           (i)            Expenses
incurred by the General Partner relating to the organization or reorganization
of the Partnership and the General Partner the issuance of Common Stock in
connection with, and as described in, the Registration Statement and any
issuance of additional Partnership Interests, Class A Common Stock or rights,
options, warrants, or convertible, exercisable or exchangeable securities
pursuant to Section
4.2 and all costs and expenses associated with the preparation and filing
of any required filings or periodic reports by the General Partner under
federal, state or local laws or regulations (including all costs, expenses,
damages, and other payments resulting from or arising in connection with
litigation related to any of the foregoing) are primarily obligations of the
Partnership.

     

    (ii)           To
the extent the General Partner or its Affiliate pays or incurs such expenses,
the General Partner or such Affiliate shall be reimbursed for such
expenses.

     

    
      	
              7.4

            	
              Outside Activities of
      the General Partner

            

    

     

    (a)           Subject
to Section
7.4(b), the Articles of Incorporation and any agreements entered into by
the General Partner or its Affiliates with the Partnership or a Subsidiary, any
officer, director, employee, agent, Affiliate or Stockholder of the General
Partner, the General 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 substantially similar
or identical to those of the Partnership. Neither the Partnership nor any of the
Limited Partners shall have any rights by virtue of this Agreement in any such
business ventures, interest or activities. None of the Limited Partners nor any
other Person shall have any rights by virtue of this Agreement or the
partnership relationship established hereby in any such business ventures,
interests or activities, and the General Partner shall have no obligation
pursuant to this Agreement to offer any interest in any such business ventures,
interests and activities to the Partnership or any Limited Partner, even if such
opportunity is of a character that, if presented to the Partnership or any
Limited Partner, could be taken by such Person.

     

    (b)           The
General Partner agrees that, generally, all business activities of the General
Partner, including activities pertaining to the acquisition, development,
ownership of or investment in multifamily properties or other property,
shall be conducted through the Partnership or one or more Subsidiary
Partnerships; provided, however, that the General Partner may make direct
acquisitions or undertake business activities if such acquisitions or activities
are made in connection with the issuance of additional Securities by the General
Partner or the business activity has been approved by a majority of the
independent directors of the General Partner. If, at any time, the General
Partner acquires material assets (other than Partnership Units or other assets
on behalf of the Partnership), the definition of “Class A Common Stock Amount”
may be adjusted, as determined in good faith by the General Partner, to reflect
only the fair market value of a share of Class A Common Stock attributable to
the General Partner’s Partnership Units and other assets held on behalf of the
Partnership.

     

    (c)           The
General Partner and any Affiliates of the General Partner may acquire Limited
Partner Interests and shall be entitled to exercise all rights of a Limited
Partner relating to such Limited Partner Interests.

    
      
         

      

      
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              7.5

            	
              Contracts with
      Affiliates

            

    

     

    (a)          (i)           The
Partnership may lend or contribute funds or other assets to its Subsidiaries or
other Persons in which it has an equity investment and such Subsidiaries and
Persons may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General
Partner.

     

    (ii)           The
foregoing authority shall not create any right or benefit in favor of any
Subsidiary or any other Person.

     

    (b)           Except
as provided in Section
7.4, the Partnership may Transfer assets to 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, may determine.

     

    (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
the Limited Partners, may propose and adopt, on behalf of the Partnership,
employee benefit plans, stock option plans, and similar plans funded by the
Partnership for the benefit of employees of the Partnership, the General
Partner, any 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, any Subsidiaries of the Partnership or any
Affiliate of any of them.

     

    (e)           The
General Partner is expressly authorized to enter into, in the name and on behalf
of the Partnership, a “right of first opportunity” or “right of first offer”
arrangement, non-competition agreements and other conflict avoidance agreements
with various Affiliates of the Partnership and the General Partner, on such
terms as the General Partner, in its sole and absolute discretion, believes are
advisable.

     

    
      	
              7.6

            	
              Indemnification

            

    

     

    (a)           (i) 
          To the fullest
extent permitted by Delaware law or as provided herein, the Partnership shall
indemnify each Indemnitee from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including reasonable 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 (collectively, “Claims”), 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, so long as (A) the course of conduct which
gave rise to the Claim was taken, in the reasonable determination of the
Indemnitee made in good faith, in the best interests of the Partnership or the
General Partner, (B) such Claim was not the result of gross negligence or
willful misconduct by the Indemnitee, (C) the Indemnitee (if other than the
General Partner) was acting on behalf or performing services for the
Partnership, and (D) such indemnification is not satisfied or recoverable from
the assets of the Stockholders of the General Partner. Notwithstanding the
foregoing, no Indemnitee (other than the General Partner) shall be indemnified
for any Claim arising from or out of an alleged violation of federal or state
securities laws unless (1) there has been a successful adjudication on the
merits of each count involving alleged securities law violations as to such
Indemnitee, (2) such allegations have been dismissed with prejudice on the
merits by a court of competent jurisdiction as to such Indemnitee, or (3) a
court of competent jurisdiction approves a settlement of such allegations
against such Indemnitee and finds that indemnification of the settlement and the
related costs should be made, and the court considering the request for
indemnification has been advised of the position of the Securities and Exchange
Commission and of the published position of any state securities regulatory
authority in which the Common Stock was offered or sold as to indemnification
for violations of securities law.

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    (ii)           Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty (except a guaranty by a Limited Partner
of nonrecourse indebtedness of the Partnership or as otherwise provided in any
such loan guaranty), contractual obligation for any indebtedness or other
obligation or otherwise for any indebtedness of the Partnership or any
Subsidiary of the Partnership (including 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 7.6 in favor
of any Indemnitee having or potentially having liability for any such
indebtedness.

     

    (iii)          Any
indemnification pursuant to this Section 7.6 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 contribute to the capital
of the Partnership, or otherwise provide funds, to enable the Partnership to
fund its obligations under this Section
7.6.

     

    (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 any and
all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative made or threatened against an Indemnitee upon
receipt by the Partnership of (i) a written affirmation by the Indemnitee of the
Indemnitee’s good faith belief that the standard of conduct necessary for
indemnification by the Partnership as authorized in this Section 7.6 has been
met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay
the amount if it shall ultimately be determined that the standard of conduct has
not been met.

     

    (c)           The
indemnification provided by this Section 7.6 shall be
in addition to any other rights to which an Indemnitee or any other Person may
be entitled under any agreement, pursuant to any vote of the Partners, as a
matter of law or otherwise, and shall continue as to an Indemnitee who has
ceased to serve in such capacity unless otherwise provided in a written
agreement pursuant to which such Indemnities are indemnified.

     

    (d)           The
Partnership may, but shall not be obligated to, purchase and maintain insurance,
on behalf of the Indemnities 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.

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

    (e)           For
purposes of this Section 7.6, the
Partnership shall be deemed to have requested an Indemnitee to serve as
fiduciary of an employee benefit plan whenever the performance by such
Indemnitee of its duties to the Partnership also imposes duties on, or otherwise
involves services by, such Indemnitee to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines
within the meaning of this Section
7.6.  Actions taken or omitted by the Indemnitee with respect
to an employee benefit plan in the performance of its duties for a purpose
reasonably believed by it to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the Partnership.

     

    (f) 
          In no event may an
Indemnitee subject any of the Partners (other than the General Partner) 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 7.6
because the Indemnitee had an interest in the transaction with respect to which
the indemnification applies if the transaction was otherwise permitted by the
terms of this Agreement.

     

    (h)          (i)           The
provisions of this Section 7.6 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.

     

    (ii)           Any
amendment, modification or repeal of this Section 7.6 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 7.6, 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.

     

    (i)           If
and to the extent any payments to the General Partner pursuant to this Section 7.6
constitute gross income to the General Partner (as opposed to the repayment of
advances made on behalf of the Partnership), such amounts shall constitute
guaranteed payments within the meaning of Section 707(c) of the Code, shall be
treated consistently therewith by the Partnership and all Partners, and shall
not be treated as distributions for purposes of computing the Partners’ Capital
Accounts.

     

    (j)           Notwithstanding
anything to the contrary in this Agreement, the General Partner shall not be
entitled to indemnification hereunder for any loss, claim, damage, liability or
expense for which the General Partner is obligated to indemnify the Partnership
under any other agreement between the General Partner and the
Partnership.

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    
      	
              7.7

            	
              Liability of the
      General Partner

            

    

     

    (a)           Notwithstanding
anything to the contrary set forth in this Agreement, neither the General
Partner nor the investment advisor of the General Partner, nor any of their
respective officers and directors, 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 mistakes of fact or law or of any
act or omission unless the General Partner or its investment advisor, as the
case may be, acted in bad faith and the act or omission was material to the
matter giving rise to the loss, liability or benefit not derived.

     

    (b)           (i)
           The Limited
Partners and the Special Limited Partner expressly acknowledge that the General
Partner (and its investment advisor) is acting on behalf of the Partnership and
the Stockholders of the General Partner collectively, that the General Partner
(and its investment advisor), subject to the provisions of Section 7.1(e), is
under no obligation to consider the separate interest of the Limited Partners or
the Special Limited Partner (including the tax consequences to any Limited
Partner, the Special Limited Partner or any Assignee) in deciding whether to
cause the Partnership to take (or decline to take) any actions, and that the
General Partner (and its investment advisor) shall not be liable for monetary
damages for losses sustained, liabilities incurred, or benefits not derived by
Limited Partners or the Special Limited Partner in connection with such
decisions; provided, however, that the
General Partner (and its investment advisor) has acted in good
faith.

     

    (ii)           With
respect to any indebtedness of the Partnership which any Limited Partner or the
Special Limited Partner may have guaranteed, the General Partner (and its
investment advisor) shall have no duty to keep such indebtedness
outstanding.

     

    (c)       (i)           
Subject to its obligations and duties as General Partner set forth in Section 7.1(a),
the General Partner may exercise any of the powers granted to it by this
Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its agent, including its investment
advisor.

     

    (ii)           The
General Partner shall not be responsible for any willful misconduct or gross
negligence on the part of any such agent appointed by the General Partner in
good faith.

     

    (d)           The
Limited Partners expressly acknowledge that if there is any conflict in the
fiduciary duties owed by the General Partner to its Stockholders and by the
General Partner, in its capacity as a general partner of the Partnership, to the
Limited Partners or the Special Limited Partner, the General Partner may act in
the best interests of the General Partner’s Stockholders without violating its
fiduciary duties to the Limited Partners or the Special Limited Partner, and
that the General Partner shall not be liable for monetary damages for losses
sustained, liabilities incurred, or benefits not derived by the Limited Partners
or the Special Limited Partner in connection with any such
violation.

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    (e)           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
limitations on the General Partner’s and its officers’ and directors’ liability
to the Partnership, the Special Limited Partner and the Limited Partners 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.

     

    
      	
              7.8

            	
              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 such 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)          (i)           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.

     

    (ii)           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 the General Partner to continue to qualify as a REIT, or

     

    (ii)           to
avoid the General Partner incurring any taxes under Section 857 or Section 4981
of the Code,

     

    is
expressly authorized under this Agreement and is deemed approved by all of the
Limited Partners and the Special Limited Partner.

     

    
      	
              7.9

            	
              Title to Partnership
      Assets

            

    

     

    (a)           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.

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    (b)          (i)           Title
to any or all of the Partnership assets may be held in the name of the
Partnership, the General Partner or one or more nominees, as the General Partner
may determine, including Affiliates of the General Partner.

     

    (ii)           The
General Partner hereby declares and warrants that any Partnership asset 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.

     

    (iii)          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.

     

    
      	
              7.10

            	
              Reliance by Third
      Parties

            

    

     

    (a)           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.

     

    (b)           Each
Limited Partner and the Special 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.

     

    (c)           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 expediency of any act or
action of the General Partner or its representatives.

     

    (d)           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.

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

    
      	
              7.11

            	
              Loans By Third
      Parties

            

    

     

    The
Partnership may incur Debt, or enter into similar credit, guarantee, financing
or refinancing arrangements for any purpose (including in connection with any
acquisition of asset) with any Person upon such terms as the General Partner
determines appropriate.

     

    ARTICLE
8

    RIGHTS
AND OBLIGATIONS OF LIMITED PARTNERS

    

    
      	
              8.1

            	
              Limitation of
      Liability

            

    

     

    No
Limited Partner shall have any liability under this Agreement except as
expressly provided in this Agreement, including Section 10.5, or
under the Act.

     

    
      	
              8.2

            	
              Management of
      Business

            

    

     

    (a)           No
Limited Partner or Assignee (other than the General Partner, any of its
Affiliates or any officer, director, employee, agent or trustee of the General
Partner, the Partnership or any of their Affiliates, in their capacity as such)
shall take part in the operation, management or control (within the meaning of
the Act) of the Partnership’s business, transact any business in the
Partnership’s name or have the power to sign documents for or otherwise bind the
Partnership.

     

    (b)           The
transaction of any such business by the General Partner, any of its Affiliates
or any officer, director, employee, partner, agent or trustee of the General
Partner, the Partnership or any of their Affiliates, in their capacity as such,
shall not affect, impair or eliminate the limitations on the liability of the
Limited Partners or Assignees under this Agreement.

     

    
      	
              8.3

            	
              Outside Activities of
      Limited Partners

            

    

     

    (a)           Subject
to any agreements entered into pursuant to Section 7.5 and any
other agreements entered into by the Special Limited Partner, a Limited Partner
or any of their Affiliates with the Partnership or any of its Subsidiaries, and
any Limited Partner and the Special Limited Partner and any officer, director,
employee, agent, trustee, Affiliate or shareholder of any Limited Partner or the
Special 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.

     

    (b)           Neither
the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of the Special Limited Partner, any Limited
Partner or any Assignee.

     

    (c)           No
Limited Partner 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 and such Person shall have no obligation pursuant
to this Agreement to offer any interest in any such business ventures to the
Partnership, any Limited Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person, could be taken by such
Person.

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

    
      	
              8.4

            	
              Return of
      Capital

            

    

     

    (a)           Except
pursuant to the Exchange Rights Agreements, 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.

     

    (b)           Except
as provided in Articles 5 and 13, 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.

     

    
      	
              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(b), each
Limited Partner and the Special Limited Partner shall have the right, for a
purpose reasonably related to such Person’s interest as a limited partner in the
Partnership, upon written demand with a statement of the purpose of such demand
and at such Person’s own expense (including such reasonable copying and
administrative charges as the General Partner may establish from time to
time):

     

    (i)      
     to obtain a copy of the most recent annual and
quarterly reports filed with the Securities and Exchange Commission by the
General Partner pursuant to the Securities Exchange Act of 1934;
and

     

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

     

    (b)           Notwithstanding
any other provision of this Section 8.5, the
General Partner may keep confidential from the Limited Partners and the Special
Limited Partner, 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.

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

    
      	
              8.6

            	
              Exchange Rights
      Agreements

            

    

     

    (a)           The
Limited Partners will be granted the right, but not the obligation, to exchange
all or a portion of their Partnership Units for cash or, at the option of the
Partnership, for shares of Class A Common Stock on such terms and subject to
such conditions and restrictions as will be contained in one or more exchange
rights agreements among the General Partner, the Partnership and one or more
Limited Partners (as amended from time to time, the “Exchange Rights
Agreements”). The form of each Exchange Rights Agreement governing the
exchange of Partnership Units shall hereafter be provided by the General
Partner.

     

    (b)           The
Limited Partners and all successors, assignees and transferees (whether by
operation of law, including by merger or consolidation, dissolution or
liquidation of an entity that is a Limited Partner, or otherwise) shall be bound
by the provisions of the Exchange Rights Agreement to which they are
parties.

     

    ARTICLE
9

    BOOKS,
RECORDS, ACCOUNTING AND REPORTS

    

    
      	
              9.1

            	
              Records and
      Accounting

            

    

     

    (a)           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 all books and records necessary
for the General Partner to comply with applicable REIT Requirements and to
provide to the Limited Partners and the Special Limited Partner any information,
lists and copies of documents required to be provided pursuant to Sections 8.5(a) and
9.3.

     

    (b)           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.

     

    (c)           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.

     

    
      	
              9.2

            	
              Fiscal
      Year

            

    

     

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

     

    
      	
              9.3

            	
              Reports

            

    

     

    (a)           As
soon as practicable, but in no event later than the date on which the General
Partner mails its annual report to its Stockholders, the General Partner shall
cause to be mailed to each Limited Partner and the Special Limited Partner as of
the close of the Partnership Year, an annual report containing financial
statements of the Partnership, or of the General Partner, if such statements are
prepared on a consolidated basis with the Partnership, for such Partnership
Year, presented in accordance with the standards of the Public Accounting
Oversight Board (United States), such statements to be audited by a nationally
recognized firm of independent public accountants selected by the General
Partner in its sole discretion.

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

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

     

    (c)           Notwithstanding
the foregoing, the General Partner may deliver to the Limited Partners and the
Special Limited Partner each of the reports described above, as well as any
other communications that it may provide hereunder, by E-mail or by any other
electronic means.

     

    ARTICLE
10

    TAX
MATTERS

    

    
      	
              10.1

            	
              Preparation of Tax
      Returns

            

    

     

    (a)           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 90 days of the close of each
taxable year, the tax information reasonably required by the Limited Partners
and the Special Limited Partner for federal and state income tax reporting
purposes.  The federal income tax return of the Partnership shall be
filed annually on IRS Form 1065 (or such other successor form) or on any other
IRS form as may be required.

     

    (b)           If
required under the Code or applicable state or local income tax law, the General
Partner shall also arrange for the preparation and timely filing of all returns
of income, gains, deductions, losses and other items required of any
Subsidiaries of the Partnership for federal and state income tax purposes and
shall use all reasonable efforts to furnish, within 90 days of the close of each
taxable year, the tax information reasonably required by the Limited Partners
and the Special Limited Partner for federal and state income tax reporting
purposes.

     

    
      	
              10.2

            	
              Tax
      Elections

            

    

     

    (a)           Except
as otherwise provided herein, the General Partner shall, in its sole and
absolute discretion, determine whether to make any available election pursuant
to the Code.

     

    (b)           The
General Partner shall elect a permissible method (which need not be the same
method for each item or property) of eliminating the disparity between the book
value and the tax basis for each item of property contributed to the Partnership
or to a Subsidiary of the Partnership pursuant to the regulations promulgated
under the provisions of Section 704(c) of the Code.

     

    (c)           The
General Partner shall have the right to seek to revoke any tax election it
makes, including the 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.

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

    
      	
              10.3

            	
              Tax Matters
      Partner

            

    

     

    (a)          (i)           The
General Partner shall be the “tax matters partner” of the Partnership for
federal income tax purposes.

     

    (ii)           Pursuant
to Section 6230(e) of the Code, upon receipt of notice from the Internal Revenue
Service of the beginning of an administrative proceeding with respect to the
Partnership, the tax matters partner shall furnish the Internal Revenue Service
with the name, address, taxpayer identification number, and profit interest of
each of the Limited Partners, the Special Limited Partner and the Assignees;
provided, however, that such
information is provided to the Partnership by the Limited Partners, the Special
Limited Partner and the Assignees.

     

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

     

    (A)          to
enter into any settlement with the Internal Revenue Service with respect to any
administrative or judicial proceedings for the adjustment of Partnership items
required to be taken into account by a Partner (including the Special Limited
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 (including the Special Limited
Partner), except that such settlement agreement shall not bind any Partner or
the Special Limited Partner

     

    (1)           who
(within the time prescribed pursuant to the Code and Regulations) files a
statement with the Internal Revenue Service providing that the tax matters
partner shall not have the authority to enter into a settlement agreement on
behalf of such Partner or the Special Limited Partner; or

     

    (2)           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);

     

    (B)          if
a notice of a final administrative adjustment at the Partnership level of any
item required to be taken into account by a Partner or the Special Limited
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;

     

    (C)          to
intervene in any action brought by any other Partner or the Special Limited
Partner for judicial review of a final adjustment;

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

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

     

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

     

    (F)           to
take any other action on behalf of the Partners, the Special Limited Partner 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 of the General Partner set forth in Section 7.6 of this
Agreement shall be fully applicable to the tax matters partner in its capacity
as such.

     

    (b)          (i)           The
tax matters partner shall receive no compensation for its services.

     

    (ii)           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.

     

    (iii)           Nothing
herein shall be construed to restrict the Partnership from engaging an
accounting 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.

     

    
      	
              10.4

            	
              Organizational
      Expenses

            

    

     

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

     

    
      	
              10.5

            	
              Withholding

            

    

     

    (a)           Each
Limited Partner and the Special Limited Partner hereby authorizes the
Partnership to withhold from, or pay on behalf of or with respect to, such
Limited Partner or the Special 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 or the Special Limited Partner pursuant to
this Agreement, including any taxes required to be withheld or paid by the
Partnership pursuant to Sections 1441, 1442, 1445, or 1446 of the
Code.

     

    (b)           (i)          
 Any amount paid on behalf of or with respect to a Limited Partner or the
Special Limited Partner shall constitute a loan by the Partnership to such
Limited Partner or the Special Limited Partner, which loan shall be repaid by
such Limited Partner or the Special Limited Partner as the case may be within 15
days after notice from the General Partner that such payment must be made
unless:

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

    (A)          the
Partnership withholds such payment from a distribution which would otherwise be
made to the Limited Partner or the Special Limited Partner; or

     

    (B)           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 the
Special Limited Partner.

     

    (ii)           Any
amounts withheld pursuant to the foregoing clauses (i)(A) or (B) shall be
treated as having been distributed to the Limited Partner or the Special Limited
Partner.

     

    (c)          (i)           Each
Limited Partner and the Special Limited Partner hereby unconditionally and
irrevocably grants to the Partnership a security interest in such Limited
Partner’s Partnership Interest and such Special Limited Partner’s Special
Limited Partner Interest, as the case may be, to secure such Limited Partner’s
or Special Limited Partner’s obligation to pay to the Partnership any amounts
required to be paid pursuant to this Section
10.5.

     

    (ii)          (A)           If
a Limited Partner or the Special Limited Partner fails to pay when due any
amounts owed to the Partnership pursuant to this Section 10.5, 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 or
Special Limited Partner, and in such event shall be deemed to have loaned such
amount to such defaulting Limited Partner or Special Limited Partner and shall
succeed to all rights and remedies of the Partnership as against such defaulting
Limited Partner or Special Limited Partner.

     

    (B)          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 or Special 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 or Special Limited Partner and immediately paid
by the defaulting Limited Partner or Special Limited Partner to the General
Partner in repayment of such loan.

     

    (iii)          Any
amount payable by a Limited Partner or the Special Limited Partner hereunder
shall bear interest at the highest base or prime rate of interest published from
time to time by The Wall Street Journal, plus four percentage points, but in no
event higher than the maximum lawful rate of interest on such obligation, such
interest to accrue from the date such amount is due (i.e., 15 days after
demand) until such amount is paid in full.

    
      
         

      

      
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    (iv)          Each
Limited Partner and the Special Limited Partner shall take such actions as the
Partnership or the General Partner shall request in order to perfect or enforce
the security interest created hereunder.

     

    ARTICLE
11

    TRANSFERS
AND WITHDRAWALS

    

    
      	
              11.1

            	
              Transfer

            

    

     

    (a)          (i)           The
term “Transfer,” when used in this Article 11 with
respect to a Partnership Interest or a Partnership Unit, shall be deemed to
refer to a transaction by which the General Partner purports to assign all or
any part of its General Partner Interest to another Person, or 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.

     

    (ii)           The
term “Transfer” when used in this Article 11 does not
include any exchange of Partnership Units for cash or Class A Common Stock
pursuant to the Exchange Rights Agreement.

     

    (b)          (i)           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.

     

    (ii)           Any
Transfer or purported Transfer of a Partnership Interest not made in accordance
with this Article
11 shall be null and void.

     

    
      	
              11.2

            	
              Transfer of the
      General Partner’s General Partner
  Interest

            

    

     

    (a)           The
General Partner may not Transfer any of its General Partner Interest or withdraw
as General Partner, or Transfer any of its Limited Partner Interest,
except:

     

    (i)
           if
holders of at least two-thirds of the Limited Partner Interests consent to such
Transfer or withdrawal;

     

    (ii)           if
such Transfer is to an entity which is wholly owned by the General Partner and
is a Qualified REIT Subsidiary as defined in Section 856(i) of the Code;
or

     

    (iii)          in
connection with a transaction described in Section 11.2(c) or
11.2(d) (as
applicable)

     

    For
purposes of clarification, the restriction on the Transfer by the General
Partner of any its Limited Partner Interest shall not apply to any Transfer by
the Special Limited Partner of its Limited Partner Interest, which shall be
otherwise subject to the restrictions on Transfer under Section
11.3.

    
      
         

      

      
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    (b)           If
the General Partner withdraws as general partner of the Partnership in
accordance with Section 11.2(a), the
General Partner’s General Partner Interest shall immediately be converted into a
Limited Partner Interest.

     

    (c)           Except
as otherwise provided in Section 11.2(d), the
General Partner shall not engage in any merger, consolidation or other
combination of the General Partner with or into another Person (other than a
merger in which the General Partner is the surviving entity) or sale of all or
substantially all of its assets, or any reclassification, or any
recapitalization of outstanding Class A Common Stock (other than a change in par
value, or from par value to no par value, or as a result of a subdivision or
combination of Class A Common Stock) (a “Transaction”),
unless

     

    (i)
           in
connection with the Transaction all Limited Partners will either receive, or
will have the right to elect to receive, for each Partnership Unit an amount of
cash, securities, or other property equal to the product of the Exchange Factor
and the amount of cash, securities or other property or value paid in the
Transaction to or received by a holder of one share of Class A Common Stock
corresponding to such Partnership Unit in consideration of one share of Class A
Common Stock at any time during the period from and after the date on which the
Transaction is consummated; provided, however, that if, in
connection with the Transaction, a purchase, tender or exchange offer (“Offer”) shall have
been made to and accepted by the holders of more than 50% of the outstanding
Class A Common Stock, each holder of Partnership Units shall be given the option
to exchange its Partnership Units for the amount of cash, securities, or other
property which a Limited Partner would have received had it

     

    (A)          exercised
its Exchange Right and

     

    (B)          sold,
tendered or exchanged pursuant to the Offer the Class A Common Stock received
upon exercise of the Exchange Right immediately prior to the expiration of the
Offer.

     

    The
foregoing is not intended to, and does not, affect the ability of (i) a
Stockholder of the General Partner to sell its Common Stock in the General
Partner or (ii) the General Partner to perform its obligations (under agreement
or otherwise) to such Stockholders (including the fulfillment of any obligations
with respect to registering the sale of Common Stock under applicable securities
laws).

     

    (d)          (i)           Notwithstanding
Section
11.2(c), the General Partner may merge into or consolidate with another
entity if immediately after such merger or consolidation

     

    (A)          substantially
all of the assets of the successor or surviving entity (the “Surviving General
Partner”), other than Partnership Units held by the General Partner, are
contributed to the Partnership as a Capital Contribution in exchange for
Partnership Units with a fair market value equal to the value of the assets so
contributed as determined by the Surviving General Partner in good faith
and

    
      
         

      

      
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    (B)          the
Surviving General Partner expressly agrees to assume all obligations of the
General Partner hereunder.

     

    (ii)          (A)         Upon
such contribution and assumption, the Surviving General Partner shall have the
right and duty to amend this Agreement and the Exchange Rights Agreement as set
forth in this Section
11.2(d).

     

    (B)           (1)           The
Surviving General Partner shall in good faith arrive at a new method for the
calculation of the Exchange Factor for a Partnership Unit after any such merger
or consolidation so as to approximate the existing method for such calculation
as closely as reasonably possible.

     

    (2)           Such
calculation shall take into account, among other things, the kind and amount of
securities, cash and other property that was receivable upon such merger or
consolidation by a holder of Class A Common Stock or options, warrants or other
rights relating thereto, and which a holder of Partnership Units could have
acquired had such Partnership Units been redeemed for Class A Common Stock
immediately prior to such merger or consolidation.

     

    (C)           Such
amendment to this Agreement shall provide for adjustment to such method of
calculation, which shall be as nearly equivalent as may be practicable to the
adjustments provided for with respect to the Exchange Factor.

     

    (iii)          The
above provisions of this Section 11.2(d) shall
similarly apply to successive mergers or consolidations permitted
hereunder.

     

    
      	
              11.3

            	
              Limited Partners’
      Rights to Transfer

            

    

     

    (a)           Subject
to the provisions of Sections 11.3(c),
11.3(d), 11.3(e), 11.4 and 11.6, a Limited
Partner may, without the consent of the General Partner, Transfer all or any
portion of its Limited Partner Interest, or any of such Limited Partner’s
economic right as a Limited Partner. In order to effect such transfer, the
Limited Partner must deliver to the General Partner a duly executed copy of the
instrument making such transfer and such instrument must evidence the written
acceptance by the assignee of all of the terms and conditions of this Agreement
and represent that such assignment was made in accordance with all applicable
laws and regulations.

     

    (b)           (i)
           If a Limited
Partner is Incapacitated, 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.

     

    (ii)           The
Incapacity of a Limited Partner, in and of itself, shall not dissolve or
terminate the Partnership.

    
      
         

      

      
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    (c)           The
General Partner may prohibit any Transfer by a Limited Partner of its
Partnership Units, in its sole and absolute discretion, if it reasonably
believes (based on the advice of counsel) such Transfer would require filing of
a registration statement under the Securities Act of 1933, as amended, or would
otherwise violate any federal or state securities laws or regulations applicable
to the Partnership or the Partnership Units.

     

    (d)           No
Transfer by a Limited Partner of its Partnership Units may be made to any Person
if

     

    (i) 
          it would adversely
affect the ability of the General Partner to continue to qualify as a REIT or
would subject the General Partner to any additional taxes under Section 857 or
Section 4981 of the Code;

     

    (ii)           it
would result in the Partnership being treated as an association taxable as a
corporation for federal income tax purposes;

     

    (iii)          such
Transfer would cause the Partnership to become, with respect to any employee
benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in
Section 3(14) of ERISA) or a “disqualified person” (as defined in Section
4975(c) 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, as
modified or deemed to be modified by Section 3(42) of ERISA;

     

    (v)           such
Transfer would subject the Partnership to regulation under the Investment
Company Act of 1940, the Investment Advisors Act of 1940 or the Employee
Retirement Income Security Act of 1974, each as amended;

     

    (vi)          such
Transfer is a sale or exchange, and such sale or exchange would, when aggregated
with all other sales and exchanges during the 12-month period ending on the date
of the proposed Transfer, result in 50% or more of the interests in Partnership
capital and profits being sold or exchanged during such 12-month period without
the consent of the General Partner, which consent may be withheld in its sole
and absolute discretion; or

     

    (vii)         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.

     

    (e)           No
transfer of any Partnership Units may be made to a lender to the Partnership or
any Person who is related (within the meaning of Section 1.752-4(b) of the
Regulations) to any lender to the Partnership whose loan constitutes a
nonrecourse liability (within the meaning of Section 1.752-1(a)(2) of the
Regulations), without the consent of the General Partner, which may be withheld
in its sole and absolute discretion; provided, however, that as a
condition to such consent the lender will be required to enter into an
arrangement with the Partnership and the General Partner to exchange for the
Cash Amount any Partnership Units in which a security interest is held
simultaneously with the time at which such lender would be deemed to be a
partner in the Partnership for purposes of allocating liabilities to such lender
under Section 752 of the Code.

    
      
         

      

      
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    (f)           Any
Transfer in contravention of any of the provisions of this Section 11.3 shall be
void and ineffectual and shall not be binding upon, or recognized by, the
Partnership.

     

    
      	
              11.4

            	
              Substituted Limited
      Partners

            

    

     

    (a)          (i)           No
Limited Partner shall have the right to substitute a Permitted Transferee for a
Limited Partner in its place.

     

    (ii)           The
General Partner shall, however, have the right to consent to the admission of a
Permitted Transferee of the Partnership Interest of a Limited Partner pursuant
to this Section
11.4 as a Substituted Limited Partner, which consent may be given or
withheld by the General Partner in its sole and absolute
discretion.

     

    (iii)          The
General Partner’s failure or refusal to permit such transferee to become a
Substituted Limited Partner shall not give rise to any cause of action against
the Partnership or any Partner.

     

    (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)          (i)           No
Permitted Transferee will be admitted as a Substituted Limited Partner, unless
such transferee has furnished to the General Partner evidence of acceptance in
form satisfactory to the General Partner of all of the terms and conditions of
this Agreement and, as it relates to the Substituted Limited Partners, the
Exchange Rights Agreement, including the power of attorney granted in Section
2.4.

     

    (ii)           Upon
the admission of a Substituted Limited Partner, the General Partner shall amend
Exhibit A to
reflect the name, address, number of Partnership Units, and Percentage Interest
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.

     

    
      	
              11.5

            	
              Assignees

            

    

     

    (a)           If
the General Partner, in its sole and absolute discretion, does not consent to
the admission of any transferee as a Substituted Limited Partner, as described
in Section
11.4(a), such transferee shall be considered an Assignee for purposes of
this Agreement.

     

    (b)           An
Assignee shall be deemed to have had assigned to it, and shall be entitled to
receive distributions from the Partnership and the share of Net Income, Net
Losses and any other items of gain, loss, deduction or credit of the Partnership
attributable to the Partnership Units assigned to such transferee, but shall not
be deemed to be a holder of Partnership Units for any other purpose under this
Agreement, and shall not be entitled to vote such Partnership Units in any
matter presented to the Limited Partners, for a vote (such Partnership Units
being deemed to have been voted on such matter in the same proportion as all
other Partnership Units held by Limited Partners are voted).

    
      
         

      

      
        53

        
          

        

      

      
         

      

    

    (c)           If
any such transferee desires to make a further assignment of any such Partnership
Units, 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 Partnership Units.

     

    
      	
              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 Units in
accordance with this Article 11 or, as it
relates to the Limited Partners, pursuant to exchange of all of its Partnership
Units pursuant to the applicable Exchange Rights Agreement.

     

    (b)          (i)           Any
Limited Partner which shall Transfer all of its Partnership Units 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 Units as Substituted Limited Partners.

     

    (ii)           Similarly,
any Limited Partner which shall Transfer all of its Partnership Units pursuant
to an exchange of all of its Partnership Units pursuant to an Exchange Rights
Agreement shall cease to be a Limited Partner.

     

    (c)           Other
than pursuant to the Exchange Rights Agreement or with the consent of the
General Partner, transfers pursuant to this Article 11 may only
be made as of the first day of a fiscal quarter of the Partnership.

     

    (d)           (i) 
          If any Partnership
Interest is transferred or assigned during the Partnership’s fiscal year in
compliance with the provisions of this Article 11 or
exchanged pursuant to the applicable Exchange Rights Agreement on any day 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.

     

    (ii)           Solely
for purposes of making such allocations, each of such items for the calendar
month in which the Transfer or assignment occurs shall be allocated to the
transferee Partner, and none of such items for the calendar month in which an
exchange occurs shall be allocated to the exchanging Partner, provided, however, that the
General Partner may adopt such other conventions relating to allocations in
connection with transfers, assignments, or exchanges as it determines are
necessary or appropriate.

     

    (iii)           All
distributions pursuant to Section 5.1(a)
attributable to Partnership Units, with respect to which the Partnership Record
Date is before the date of such Transfer, assignment, or exchange of such
Partnership Units, shall be made to the transferor Partner or the exchanging
Partner, as the case may be, and in the case of a Transfer or assignment other
than an exchange, all distributions pursuant to Section 5.1(a)
thereafter attributable to such Partnership Units shall be made to the
transferee Partner.

    
      
         

      

      
        54

        
          

        

      

      
         

      

    

    (e)           In
addition to any other restrictions on transfer herein contained, including the
provisions of this Article 11, in no
event may any Transfer or assignment of a Partnership Interest by any Partner
(including pursuant to Section 8.6) be made
without the express consent of the General Partner, in its sole and absolute
discretion, (i) to any person or entity who lacks the legal right, power or
capacity to own a Partnership Interest; (ii) in violation of applicable law;
(iii) of any component portion of a Partnership Interest, such as the Capital
Account, or rights to distributions, separate and apart from all other
components of a Partnership Interest; (iv) if in the opinion of legal counsel to
the Partnership such transfer would cause a termination of the Partnership for
federal or state income tax purposes (except as a result of the exchange for
Class A Common Stock of all Partnership Units held by all Limited Partners or
pursuant to a transaction expressly permitted under Section 7.11 or Section 11.2); (v) if
in the opinion of counsel to the Partnership, there would be a significant risk
that such transfer would cause the Partnership to cease to be classified as a
partnership for federal income tax purposes (except as a result of the exchange
for Class A Common Stock of all Partnership Units held by all Limited Partners
or pursuant to a transaction expressly permitted under Section 7.11 or Section 11.2); (vi)
if such transfer requires the registration of such Partnership Interest pursuant
to any applicable federal or state securities laws; (vii) if such transfer is
effectuated through an “established securities market” or a “secondary market”
(or the substantial equivalent thereof) within the meaning of Section 7704 of
the Code or such transfer causes the Partnership to become a “publicly traded
partnership,” as such term is defined in Section 469(k)(2) or Section 7704(b) of
the Code (provided, however, that this
clause (vii) shall not be the basis for limiting or restricting in any manner
the exercise of the Exchange Right under Section 8.6 unless,
and only to the extent that, outside tax counsel provides to the General Partner
an opinion to the effect that, in the absence of such limitation or restriction,
there is a significant risk that the Partnership will be treated as a “publicly
traded partnership” and, by reason thereof, taxable as a corporation); (viii)
such transfer could adversely affect the ability of the General Partner to
remain qualified as a REIT; or (ix) if in the opinion of legal counsel of the
transferring Partner (which opinion and counsel are reasonably satisfactory to
the Partnership), or legal counsel of the Partnership, such transfer would
adversely affect the ability of the General Partner to continue to qualify as a
REIT or subject the General Partner to any additional taxes under Section 857 or
Section 4981 of the Code, if the General Partner has elected to be qualified as
a REIT.

     

    (f)           The
General Partner shall monitor the transfers of interests in the Partnership to
determine (i) if such interests are being traded on an “established securities
market” or a “secondary market” (or the substantial equivalent thereof) within
the meaning of Section 7704 of the Code, and (ii) whether additional transfers
of interests would result in the Partnership being unable to qualify for at
least one of the “safe harbors” set forth in Section 1.7704-1 of the Regulations
(or such other guidance subsequently published by the IRS setting forth safe
harbors under which interests will not be treated as “readily tradable on a
secondary market” (or the substantial equivalent thereof) within the meaning of
Section 7704 of the Code) (the “Safe Harbors”). The
General Partner shall take all steps reasonably necessary or appropriate to
prevent any trading of interests or any recognition by the Partnership of
transfers made on such markets and, except as otherwise provided herein, to
insure that at least one of the Safe Harbors is met; provided, however, that the
foregoing shall not authorize the General Partner to limit or restrict in any
manner the right of any holder of a Partnership Unit to exercise the Exchange
Right in accordance with the terms of the applicable Exchange Rights Agreement
unless, and only to the extent that, outside tax counsel provides to the General
Partner an opinion to the effect that, in the absence of such limitation or
restriction, there is a significant risk that the Partnership will be treated as
a “publicly traded partnership” and, by reason thereof, taxable as a
corporation.

    
      
         

      

      
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    ARTICLE
12

    ADMISSION
OF PARTNERS

    

    
      	
              12.1

            	
              Admission of Successor
      General Partner

            

    

     

    (a)          (i)           A
successor to all of the General Partner Interest pursuant to Article 11 who is
proposed to be admitted as a successor General Partner shall be admitted to the
Partnership as the General Partner, effective immediately following such
transfer and the admission of such successor General Partner as a general
partner of the Partnership upon the satisfaction of the terms and conditions set
forth in Section
12.1(b).

     

    (ii)           Any
such transferee shall carry on the business of the Partnership without
dissolution.

     

    (b)           A
Person shall be admitted as a substitute or successor General Partner of the
Partnership only if the following terms and conditions are
satisfied:

     

    (i)
           the
Person to be admitted as a substitute or additional General Partner shall have
accepted and agreed to be bound by all the terms and provisions of this
Agreement by executing a counterpart thereof and such other documents or
instruments as may be required or appropriate in order to effect the admission
of such Person as a General Partner;

     

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

     

    (iii)          counsel
for the Partnership shall have rendered an opinion (relying on such opinions
from other counsel as may be necessary) that the admission of the person to be
admitted as a substitute or additional General Partner is in conformity with the
Act, that none of the actions taken in connection with the admission of such
Person as a substitute or additional General Partner will cause

     

    (A)          the
Partnership to be classified other than as a partnership for federal income tax
purposes, or

     

    (B)          the
loss of any Limited Partner’s limited liability.

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

    (c)           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(d).

     

    
      	
              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 satisfactory to the General Partner of all of the terms
and conditions of this Agreement and the applicable Exchange Rights Agreement,
including the power of attorney granted in Section 2.4,
and

     

    (ii)           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.

     

    (b)          (i)           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.

     

    (ii)           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)          (i)           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.

     

    (ii)           (A)          Solely
for purposes of making such allocations, each of such items for the calendar
month in which an admission of any Additional Limited Partner occurs shall be
allocated among all of the Partners and Assignees, including such Additional
Limited Partner.

     

    (B)          distributions
pursuant to Section
5.1(a) with respect to which the Partnership Record Date is before the
date of such admission shall be made solely to Partners and Assignees, other
than the Additional Limited Partner, and all distributions pursuant to Section 5.1(a)
thereafter shall be made to all of the Partners and Assignees, including such
Additional Limited Partner.

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

    (d)           Upon
the admission of the first Additional Limited Partner to the Partnership, the
Initial Limited Partner’s original interest in the Partnership shall
automatically, and without further action on the part of the Initial Limited
Partner or the Partnership, be withdrawn and the Initial Limited Partner shall
no longer be a Limited Partner for purposes of this Agreement, but, for the
avoidance of doubt, it shall continue to be the Special Limited
Partner.

     

    
      	
              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.

     

    ARTICLE
13

    DISSOLUTION,
LIQUIDATION AND TERMINATION

    

    
      	
              13.1

            	
              Dissolution

            

    

     

    (a)           The
Partnership shall not be dissolved by the admission of Substituted Limited
Partners, Additional Limited Partners or by the admission of a successor General
Partner in accordance with the terms of this Agreement. Upon the withdrawal of
the General Partner, any successor General Partner shall continue the business
of the Partnership.

     

    (b)           The
Partnership shall dissolve, and its affairs shall be wound up, only upon the
first to occur of any of the following (each, a “Liquidating
Event”):

     

    (i) 
          the expiration of
its term as provided in Section
2.5;

     

    (ii)           an
event of withdrawal of the General Partner, in its capacity as general partner,
as defined in the Act (other than an event of bankruptcy), unless, within 90
days after such event of withdrawal, a “majority in interest” (as defined below)
of the remaining Partners Consent 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;

     

    (iii)          an
election to dissolve the Partnership made by the General Partner, with the
Consent of the Limited Partners holding at least a majority of the Percentage
Interest of the Limited Partners (including Limited Partner Interests held by
the General Partner);

     

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

     

    (v)           a
final and non-appealable judgment is entered by a court of competent
jurisdiction ruling that the General Partner is bankrupt or insolvent, or a
final and non-appealable order for relief is entered by a court with appropriate
jurisdiction against the General Partner, in each case under any federal or
state bankruptcy or insolvency laws as now or hereafter in effect, unless prior
to the entry of such order or judgment and a “majority in interest” (as defined
below) of the remaining Partners Consent 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;

    
      
         

      

      
        58

        
          

        

      

      
         

      

    

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

     

    As used
herein, a “majority in interest” shall refer to Partners (excluding the General
Partner) who hold more than 66 2/3% of the outstanding Percentage Interests not
held by the General Partner.

     

    
      	
              13.2

            	
              Winding
      Up

            

    

     

    (a)          (i)          
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.

     

    (ii)           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.

     

    (iii)          The
General Partner, or, if there is no remaining General Partner, any Person
elected unanimously by the Limited Partners holding at least a “majority in
interest” (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 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 shares of Common Stock or
other securities of the General Partner) shall be applied and distributed in the
following order:

     

    (A)          First,
to the payment and discharge of all of the Partnership’s debts and liabilities
to creditors other than the Partners;

     

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

     

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

     

    (D)           the
balance, if any, shall be distributed to all Partners (including the Special
Limited Partner) with positive Capital Accounts in accordance with their
respective positive Capital Account balances.

    
      
         

      

      
        59

        
          

        

      

      
         

      

    

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

     

    (v)           Any
distributions pursuant to this Section 13.2(a) shall
be made by the end of the Partnership’s taxable year in which the liquidation
occurs (or, if later, within 90 days after the date of the
liquidation).

     

    (b)          (i)          
Notwithstanding the provisions of Section 13.2(a) which
require liquidation of the assets of the Partnership, but subject to the order
of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership’s assets would be impractical or would cause undue loss to the
Partners (considered as a whole) and the Special Limited Partner, the Liquidator
may, in its sole and absolute discretion, defer for a reasonable time the
liquidation of any asset except those necessary to satisfy liabilities of the
Partnership (including to those Partners, including the Special Limited Partner,
as creditors) or distribute to the Partners (and the Special Limited Partner),
in lieu of cash, as tenants in common and in accordance with the provisions of
Section
13.2(a), undivided interests in such Partnership assets as the Liquidator
deems not suitable for liquidation.

     

    (ii)           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 interests of the
Partners (considered as a whole) and the Special Limited Partner, 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.

     

    (iii)          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, the Limited Partners and the
Special Limited Partner pursuant to this Article 13 may
be:

     

    (A)         
distributed to a trust established for the benefit of the General Partner, the
Limited Partners and the Special Limited Partner 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, the Limited
Partners and the Special Limited Partner from time to time, in the reasonable
discretion of the Liquidator, in the same proportions as the amount distributed
to such trust by the Partnership would otherwise have been distributed to the
General Partner, the Limited Partners and the Special Limited Partner pursuant
to this Agreement; or

    
      
         

      

      
        60

        
          

        

      

      
         

      

    

    (B)           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, however, that such
withheld or escrowed amounts shall be distributed to the General Partner, the
Limited Partners and the Special Limited Partner in the manner and order of
priority set forth in Section 13.2(a), as
soon as practicable.

     

    
      	
              13.3

            	
              No Obligation to
      Contribute Deficit

            

    

     

    If any
Partner or the Special Limited Partner has a deficit balance in his 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 or the Special Limited 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.

     

    
      	
              13.4

            	
              Rights of Limited
      Partners

            

    

     

    (a)           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.

     

    (b)           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.

     

    
      	
              13.5

            	
              Notice of
      Dissolution

            

    

     

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

     

    
      	
              13.6

            	
              Termination of
      Partnership and Cancellation of Certificate of Limited
      Partnership

            

    

     

    Upon the
completion of the liquidation of the Partnership’s assets, as provided in Section 13.2,
the Partnership shall be terminated, a certificate of cancellation shall be
filed, and all qualifications of the Partnership as a foreign limited
partnership in jurisdictions other than the state of Delaware shall be canceled
and such other actions as may be necessary to terminate the Partnership shall be
taken.

     

    
      	
              13.7

            	
              Reasonable Time for
      Winding-Up

            

    

     

    A
reasonable time shall be allowed for the orderly winding-up of the business and
affairs of the Partnership and the liquidation of its assets pursuant to Section 13.2 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
(including the Special Limited Partner) during the period of
liquidation.

    
      
         

      

      
        61

        
          

        

      

      
         

      

    

    
      	
              13.8

            	
              Waiver of
      Partition

            

    

     

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

     

    ARTICLE
14

    AMENDMENT
OF PARTNERSHIP AGREEMENT; MEETINGS

    

    
      	
              14.1

            	
              Amendments

            

    

     

    (a)           The
General Partner shall have the power, without the consent of the Limited
Partners or the Special Limited Partner, to amend this Agreement except as set
forth in Section
14.1(b).  The General Partner shall provide notice to the
Limited Partners and the Special Limited Partner when any action under this
Section 14.1(a)
is taken in the next regular communication to the Limited Partners.

     

    (b)           Notwithstanding
Section
14.1(a), this Agreement shall not be amended with respect
to:

     

    (i)           any
Partner, including the Special Limited Partner, adversely affected without the
Consent of such Partner adversely affected if such amendment would:

     

    (A)         
convert a Limited Partner’s or the Special Limited Partner’s interest in the
Partnership into a General Partner Interest;

     

    (B)           modify
the limited liability of a Limited Partner or the Special Limited Partner in a
manner adverse to such Limited Partner or the Special Limited Partner;
or

     

    (C)          amend
this Section
14.1(b)(i); and

     

    (ii)          any
Limited Partner adversely affected without the Consent of Limited Partners
holding more than 66 2/3% of the outstanding Percentage Interests of the Limited
Partners adversely affected if such amendment would:

     

    (A)          alter
or change Exchange Rights;

     

    (B)          create
an obligation to make Capital Contributions not contemplated in this
Agreement;

     

    (C)          alter
or change the terms of this Agreement or the Exchange Rights Agreement regarding
the rights of the limited partners with respect to Business
Combinations;

     

    (D)          alter
or change the distribution and liquidation rights provided in Sections 5 and 13 hereto, except as
otherwise permitted under this Agreement; or

     

    (E)           amend
this Section
14.1(b)(ii).

    
      
         

      

      
        62

        
          

        

      

      
         

      

    

    (iii)          the
Special Limited Partner without the Consent of the Special Limited Partner if
such amendment would adversely affect the Special Limited Partner.

     

    Section 14.1(b)(i)
does not require unanimous consent of all Partners adversely affected unless the
amendment is to be effective against all Partners adversely
affected.

     

    
      	
              14.2

            	
              Meetings of the
      Partners

            

    

     

    (a)           (i)
           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
25 percent or more of the Partnership Interests.

     

    (ii)           The
request shall state the nature of the business to be transacted.

     

    (iii)          Notice
of any such meeting shall be given to all Partners not less than seven days nor
more than 30 days prior to the date of such meeting.

     

    (iv)          Partners
may vote in person or by proxy at such meeting.

     

    (v)           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 meeting of the Partners or may
be given in accordance with the procedure prescribed in Section
14.1(a).

     

    (vi)          Except
as otherwise expressly provided in this Agreement, the Consent of holders of a
majority of the Percentage Interests held by Partners (including the General
Partner) shall control.

     

    (b)          (i)          
Subject to Section
14.2(a)(vi), 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).

     

    (ii)           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).

     

    (iii)          Such
Consent shall be filed with the General Partner.

     

    (iv)          An
action so taken shall be deemed to have been taken at a meeting held on the
effective date of the Consent as certified by the General Partner.

     

    (c)           (i)
           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.

     

    (ii)           Every
proxy must be signed by the Partner or an attorney-in-fact and a copy thereof
delivered to the Partnership.

    
      
         

      

      
        63

        
          

        

      

      
         

      

    

    (iii)          No
proxy shall be valid after the expiration of 11 months from the date thereof
unless otherwise provided in the proxy.

     

    (iv)          Every
proxy shall be revocable at the pleasure of the Partner executing it, such
revocation to be effective upon the General Partner’s receipt of written notice
of such revocation from the Partner executing such proxy.

     

    (d)          (i)           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.

     

    (ii)           Meetings
of Partners may be conducted in the same manner as meetings of the Stockholders
of the General Partner and may be held at the same time, and as part of,
meetings of the Stockholders of the General Partner.

     

    ARTICLE
15

    GENERAL
PROVISIONS

    

    
      	
              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 five days after being sent by first
class United States mail or by overnight delivery or via facsimile to the
Partner or Assignee at the address set forth in Exhibit A or such
other address of which the Partner shall notify the General Partner in writing.
Notwithstanding the foregoing, the General Partner may elect to deliver any such
notice, demand, request or report by E-mail or by any other electronic means, in
which case such communication shall be deemed given or made one day after being
sent.

     

    
      	
              15.2

            	
              Titles and
      Captions

            

    

     

    All
article or section titles or captions in this Agreement are for convenience of
reference only, shall not be deemed part of this Agreement and shall 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.

     

    
      	
              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.

     

    
      	
              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.

    
      
         

      

      
        64

        
          

        

      

      
         

      

    

    
      	
              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.

     

    
      	
              15.6

            	
              Creditors

            

    

     

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

     

    
      	
              15.7

            	
              Waiver

            

    

     

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

     

    
      	
              15.8

            	
              Counterparts

            

    

     

    This
Agreement may be executed (including by facsimile transmission) with counterpart
signature pages or 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.

     

    
      	
              15.9

            	
              Applicable
      Law

            

    

     

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

     

    
      	
              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.

     

    
      	
              15.11

            	
              Entire
      Agreement

            

    

     

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

     

    
      	
              15.12

            	
              Merger

            

    

     

    Subject
to Section 4.2,
the Partnership may merge with, or consolidate into, any Person or Entity in
accordance with Section 17-211 of the Act.

    
      
         

      

      
        65

        
          

        

      

      
         

      

    

    
      	
              15.13

            	
              No Rights as
      Stockholders

            

    

     

    Nothing
contained in this Agreement shall be construed as conferring upon the holders of
the Partnership Units any rights whatsoever as Stockholders of the General
Partner, including any right to receive dividends or other distributions made to
Stockholders or to vote or to consent or receive notice as Stockholders in
respect to any meeting or Stockholders for the election of directors of the
General Partner or any other matter.

     

    [SIGNATURE
PAGE FOLLOWS]

    
      
         

      

      
        66

        
          

        

      

      
         

      

    

    Signature
Page to Amended and Restated Agreement of Limited Partnership of Preferred
Apartment Communities Operating Partnership, L.P., among the undersigned and the
other parties thereto.

     

    
      
        
          	 
      	
                  GENERAL
      PARTNER:

                
	 
      	 
      	 
      	 
      
	 
      	
                  PREFERRED
      APARTMENT COMMUNITIES,

                  INC.

                
	 
      	 
      	 
      	 
      
	 
      	
                  By: 

                	 
      
	 
      	 
      	
                  Name:

                	 
      
	 
      	 
      	
                  Title:

                	 
      
	 
      	 
      	 
      	 
      
	 
      	
                  INITIAL
      LIMITED PARTNER:

                
	 
      	 
      	 
      	 
      
	 
      	
                  PREFERRED
      APARTMENT ADVISORS, LLC

                
	 	 
	 
      	
                  By:

                	
                  NELL
      Partners, Inc., its Member

                
	 
      	 
      	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Name:  

                	
                  John
      A. Williams

                
	 
      	 
      	
                  Title:

                	
                  Chief
      Executive Officer

                
	 
      	 
      	 
      	 
      
	 
      	
                  SPECIAL
      LIMITED PARTNER:

                
	 
      	 
      	 
      	 
      
	 
      	
                  PREFERRED
      APARTMENT ADVISORS, LLC

                
	 
      	 
      	 
      	 
      
	 
      	
                  By:

                	
                  NELL
      Partners, Inc., its Member

                
	 
      	 
      	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Name:

                	
                  John
      A. Williams

                
	 
      	 
      	
                  Title:

                	
                  Chief
      Executive Officer

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Corporate/Limited
Liability Company Additional Limited Partner Signature Page to Amended and
Restated Agreement of Limited Partnership of Preferred Apartment Communities
Operating Partnership, L.P., among the undersigned and the other parties
thereto.

     

    
      
        	
                Dated:  ____________
      __, 20___

              	
                [Name
      of Corporation/LLC]

              
	 
      	 
      
	 
      	
                By: 

              	
                  

              
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Individual
Additional Limited Partner Signature Page to Amended and Restated Agreement of
Limited Partnership of Preferred Apartment Communities Operating Partnership,
L.P., among the undersigned and the other parties thereto.

     

    
      
        	
                Dated:  ____________
      __, 20___

              	 
      
	 
      	 
      
	 
      	
                  

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Partnership
Limited Partner Signature Page to Amended and Restated Agreement of Limited
Partnership of Preferred Apartment Communities Operating Partnership, L.P.,
among the undersigned and the other parties thereto.

     

    
      
        	
                Dated:  ____________
      __, 20___

              	
                [Name
      of LP]

              
	 
      	 
      
	 
      	
                By: 

              	
                  

              
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
A

     

    Partners’
Contributions and Partnership Interests

     

    
      
        
          
            
              
                
                  	
                          Name and Address of Partner

                        	 	
                          Type of Interest

                        	 	
                          Capital

                          Contribution

                        	 	 	
                          Number of

                          Partnership Units

                        	 	 	
                          Percentage

                          Interest

                        	 
	 	 	 	 	 	 	 	 	 	 	 	 
	
                          Preferred
      Apartment Communities, Inc.

                           
      

                          3625
      Cumberland Boulevard

                          Suite
      400

                          Atlanta,
      Georgia 30339

                        	 	
                          General
      Partner Interest

                        	 	$	109,998	 	 	 	10,999.8	 	 	 	99.999	%
	
                          Preferred
      Apartment Advisors, LLC

                           
      

                          3625
      Cumberland Boulevard

                          Suite
      400

                          Atlanta,
      Georgia 30339

                        	 	
                          Limited
      Partner Interest

                        	 	$	1	 	 	 	0.1	 	 	 	0.001	%
	
                          Preferred
      Apartment Advisors, LLC

                           
      

                          3625
      Cumberland Boulevard

                          Suite
      400

                          Atlanta,
      Georgia 30339

                        	 	
                          Special
      Limited Partner Interest

                        	 	
                          None

                        	 	 	
                          Not
      applicable

                        	 	 	
                          Not
      applicable

                        	 

                

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
B

     

    Allocations

     

    For
purposes of this Exhibit B, the term
“Partner” shall include the Special Limited Partner.

     

    1. 
          Allocation of Net Income and
Net Loss.

     

    (a)           General. Except as
otherwise provided in this Agreement, Net Income, Net Loss and, to the extent
necessary, individual items of income, gain, loss or deduction, of the
Partnership shall be allocated among the Partners in a manner such that the
Capital Account of each Partner, immediately after making such allocation, is,
as nearly as possible, equal proportionately to (i) the distributions that would
be made to such Partner pursuant to Section 5.1(a)
if the Partnership were dissolved, its affairs wound up and its assets sold for
cash equal to their Gross Asset Value, all Partnership liabilities were
satisfied (limited with respect to each nonrecourse liability to the Gross Asset
Value of the assets securing such liability), and the net assets of the
Partnership were distributed in accordance with Section 5.1(a) to the
Partners immediately after making such allocation, minus (ii) such Partner’s
share of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain and
the amount, if any and without duplication, that the Partner would be obligated
to contribute to the capital of the Partnership, all computed immediately prior
to the hypothetical sale of assets.

     

    (b)           General Partner Gross Income
Allocation. There shall be specially allocated to the General Partner an
amount of (i) first, items of Partnership income and (ii) second,
items of Partnership gain during each fiscal year or other applicable period,
before any other allocations are made hereunder, in an amount equal to the
excess, if any, of (A) the cumulative distributions made to the General
Partner under Section
7.3(b) of the Agreement, other than distributions which would properly be
treated as “guaranteed payments” or which are attributable to the reimbursement
of expenses which would properly be deductible by the Partnership, over
(B) the cumulative allocations of Partnership income and gain to the
General Partner under this subparagraph 1(b).

     

    2.
           Regulatory
Allocations. Notwithstanding any provisions of paragraph 1 of this Exhibit B, the
following special allocations shall be made.

     

    (a)           Minimum Gain Chargeback
(Nonrecourse Liabilities). Except as otherwise provided in Section
1.704-2(f) of the Regulations, if there is a net decrease in Partnership Minimum
Gain for any Partnership fiscal year, each Partner shall be specially allocated
items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Partner’s share of the net decrease
in Partnership Minimum Gain to the extent required by Section 1.704-2(f) of the
Regulations. The items to be so allocated shall be determined in accordance with
Sections 1.704-2(f) and (i) of the Regulations. This subparagraph 2(a) is
intended to comply with the minimum gain chargeback requirement in said section
of the Regulations and shall be interpreted consistently therewith. Allocations
pursuant to this subparagraph 2(a) shall be made in proportion to the respective
amounts required to be allocated to each Partner pursuant
hereto.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)           Partner Minimum Gain
Chargeback. Except as otherwise provided in Section 1.704-2(i)(4) of the
Regulations, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
during any fiscal year, each Partner who has a share of the Partner Nonrecourse
Debt Minimum Gain, determined in accordance with Section 1.704-2(i)(5) of the
Regulations, shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount equal to that
Partner’s share of the net decrease in the Partner Nonrecourse Debt Minimum Gain
to the extent and in the manner required by Section 1.704-2(i) of the
Regulations. The items to be so allocated shall be determined in accordance with
Sections 1.704-2(i)(4) and (j)(2) of the Regulations. This subparagraph 2(b) is
intended to comply with the minimum gain chargeback requirement with respect to
Partner Nonrecourse Debt contained in said section of the Regulations and shall
be interpreted consistently therewith. Allocations pursuant to this subparagraph
2(b) shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant hereto.

     

    (c)           Qualified Income
Offset. If a Partner unexpectedly receives any adjustments, allocations
or distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) of
the Regulations, and such Partner has an Adjusted Capital Account Deficit, items
of Partnership income (including gross income) and gain shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate the
Adjusted Capital Account Deficit as quickly as possible as required by the
Regulations. This subparagraph 2(c) is intended to constitute a “qualified
income offset” under Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall
be interpreted consistently therewith.

     

    (d)           Nonrecourse
Deductions. Nonrecourse Deductions for any fiscal year or other
applicable period shall be allocated to the Partners in accordance with their
respective Percentage Interests.

     

    (e)           Partner Nonrecourse
Deductions. Partner Nonrecourse Deductions for any fiscal year or other
applicable period with respect to a Partner Nonrecourse Debt shall be specially
allocated to the Partner that bears the economic risk of loss for such Partner
Nonrecourse Debt (as determined under Sections 1.704-2(b)(4) and 1.704-2(i)(1)
of the Regulations).

     

    (f) 
          Section 754
Adjustment. To the extent an adjustment to the adjusted tax basis of any
asset of the Partnership pursuant to Section 734(b) of the Code or Section
743(b) of the Code is required, pursuant to Section 1.704-1(b)(2)(iv)(m) of the
Regulations, 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 gain or loss shall be specially
allocated among the Partners in a manner consistent with the manner in which
each of their respective Capital Accounts are required to be adjusted pursuant
to such section of the Regulations.

     

    (g)           Gross Income
Allocation. If any Partner has an Adjusted Capital Account Deficit at the
end of any fiscal year or other applicable period which is in excess of the
amount such Member is obligated to restore pursuant to the penultimate sentences
of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), such
Member shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this subparagraph 2(g) shall be made only if and to the extent that
such Partner would have an Adjusted Capital Account Deficit in excess of such
amount after all other allocations provided for under this Agreement have been
made as if subparagraph 2(c) and this subparagraph 2(g) were not in this
Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3. 
          Tax
Allocations.

     

    (a)           Items of Income or
Loss. Except as is otherwise provided in this Exhibit B, an
allocation of Partnership Net Income or Net Loss to a Partner shall be treated
as an allocation to such Partner of the same share of each item of income, gain,
loss, deduction and item of tax-exempt income or Section 705(a)(2)(B)
expenditure (or item treated as such expenditure pursuant to Section
1.704-1(b)(2)(iv)(i) of the Regulations) (“Tax Items”) that is
taken into account in computing Net Income or Net Loss.

     

    (b)           Section 1245/1250
Recapture. Subject to subparagraph 3(c) below, if any portion of gain
from the sale of Partnership assets is treated as gain which is ordinary income
by virtue of the application of Sections 1245 or 1250 of the Code (“Affected Gain”), then
such Affected Gain shall be allocated among the Partners in the same proportion
that the depreciation and amortization deductions giving rise to the Affected
Gain were allocated. This subparagraph 3(b) shall not alter the amount of Net
Income (or items thereof) allocated among the Partners, but merely the character
of such Net Income (or items thereof). For purposes hereof, in order to
determine the proportionate allocations of depreciation and amortization
deductions for each fiscal year or other applicable period, such deductions
shall be deemed allocated on the same basis as Net Income and Net Loss for such
respective period.

     

    (c)           Precontribution Gain,
Revaluations. With respect to any Contributed Property, the Partnership
shall use any permissible method contained in the Regulations promulgated under
Section 704(c) of the Code selected by the General Partner, in its sole
discretion, to take into account any variation between the adjusted basis of
such asset and the fair market value of such asset as of the time of the
contribution (“Precontribution
Gain”). Each Partner hereby agrees to report income, gain, loss and
deduction on such Partner’s federal income tax return in a manner consistent
with the method used by the Partnership. If any asset has a Gross Asset Value
which is different from the Partnership’s adjusted basis for such asset for
federal income tax purposes because the Partnership has revalued such asset
pursuant to Section 1.704-1(b)(2)(iv)(f) of the Regulations, the allocations of
Tax Items shall be made in accordance with the principles of Section 704(c) of
the Code and the Regulations and the methods of allocation promulgated
thereunder. The intent of this subparagraph 3(c) is that each Partner who
contributed to the capital of the Partnership a Contributed Property will bear,
through reduced allocations of depreciation, increased allocations of gain or
other items, the tax detriments associated with any Precontribution Gain. This
subparagraph 3(c) is to be interpreted consistently with such
intent.

     

    (d)           Excess Nonrecourse Liability
Safe Harbor. Pursuant to Section 1.752-3(a)(3) of the Regulations, solely
for purposes of determining each Partner’s proportionate share of the “excess
nonrecourse liabilities” of the Partnership (as defined in Section 1.752-3(a)(3)
of the Regulations), the Partners’ respective interests in Partnership profits
shall be determined under any permissible method reasonably determined by the
General Partner; provided, however, that each
Partner who has contributed an asset to the Partnership shall be allocated, to
the extent possible, a share of “excess nonrecourse liabilities” of the
Partnership which results in such Partner being allocated nonrecourse
liabilities in an amount which is at least equal to the amount of income
pursuant to Section 704(c) of the Code and the Regulations promulgated
thereunder (the “Liability
Shortfall”). If there is an insufficient amount of nonrecourse
liabilities to allocate to each Partner an amount of nonrecourse liabilities
equal to the Liability Shortfall, then an amount of nonrecourse liabilities in
proportion to, and to the extent of, the Liability Shortfall shall be allocated
to each Partner.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e)           References to
Regulations. Any reference in this Exhibit B or the
Agreement to a provision of proposed and/or temporary Regulations shall, if such
provision is modified or renumbered, be deemed to refer to the successor
provision as so modified or renumbered, but only to the extent such successor
provision applies to the Partnership under the effective date rules applicable
to such successor provision.)

     

    (f)           Successor Partners.
For purposes of this Exhibit B, a
transferee of a Partnership Interest shall be deemed to have been allocated the
Net Income, Net Loss and other items of Partnership income, gain, loss,
deduction and credit allocable to the transferred Partnership Interest that
previously have been allocated to the transferor Partner pursuant to this
Agreement.

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