Document:

Exhibit 10.3

STORM CAT ENERGY CORPORATION

DIRECTOR COMPENSATION POLICY

1.               Each Director of the Company will receive a
one-time grant of 100,000 common share purchase options within 30 days of the
date of his or her initial appointment or election to the Board, which options
will vest as to 1/3rd every
six months, provided that they are subject to immediate vesting upon change of
control of the Company.

2.               Each Director that has served for a complete
year (which, for the purposes of this policy, will be the period from the
Annual General Meeting at which the director was last elected to May 31 of the
following year) will be deemed to have earned an additional 15,000 fully-vested
common share purchase options as at the close of business on May 31 of each year;
such options will be treated as having been earned for past services to the
Company such that both continuing and retiring Directors that have served for
the year then just completed will be awarded the options effective on June 1 of
each year.

3.               Each Director elected to the Company’s Board
of Directors at the Company’s Annual General Meeting will, in addition to the
above-described grants of stock options, be entitled to a grant of RSUs under
the Company’s RSU Plan entitling the Director to acquire 5,000 common shares of
the Company over the then-coming year.  These
shares will be earned quarterly for services rendered throughout the year by
such RSUs being set to vest as to 1,250 shares at the end of each quarter.  Directors who join the Board between Annual
General Shareholder Meetings will be entitled to a grant of RSUs entitling the
Director to acquire 1,250 common shares of the Company for each full quarter
remaining prior to the Company’s next expected Annual General Shareholder
Meeting, vesting as to 1,250 shares at the end of each quarter.

4.               Board Members will be paid a stipend of
U.S.$1,000.00 per quarter, plus additional amounts of:

(a)               U.S.$1,000.00 per meeting for their physical
attendance at any quarterly Board meeting;

(b)              U.S.$500.00 per meeting for their
participation by telephone in a quarterly Board meeting; and

(c)               U.S. $500 per meeting for any other Board
meeting in which they participate where such meeting is over 30 minutes in
duration, and an additional U.S. $500 if any such meeting in which they
participate is over two hours in duration.

5.               Board Members will be paid U.S.$1,000.00 per
year for service on each Committee of the Company’s Board, plus an additional
U.S.$2,500.00 per year for service as a Board Committee Chair.  No additional amounts will be paid for
participation in Committee meetings.

6.               If the due date for any grant of equity-based
compensation contemplated under this Director Compensation Policy occurs during
a trading black-out period, then the subject grant will be deferred until the
first available price opportunity following the lifting of that trading
black-out.

7.               For the purposes of this Director
Compensation Policy each of the period between the Company’s Annual General
Shareholder Meeting in each year and September 30, and the period between March
31 and the Company’s Annual General Shareholder Meeting in each year, will be
taken to be one full quarter.

8.               The Company will be not be obligated to issue
any securities pursuant to this policy where doing so would be contrary to the
securities laws and stock exchange rules and policies applicable to the Company
and its directors, or to the terms and conditions of the Company’s equity-based
compensation plans, nor will the Company be obligated to pay any compensation in
lieu of granting such securities in such circumstances.

 

 2Exhibit
10.1

EXECUTION COPY

SECOND AMENDED AND
RESTATED

AGREEMENT OF
LIMITED PARTNERSHIP

OF

EXTRA SPACE STORAGE LP

a Delaware limited partnership

THE SECURITIES
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED

UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),

OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD,

TRANSFERRED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH

REGISTRATION,
UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP

AN OPINION OF
COUNSEL SATISFACTORY TO THE PARTNERSHIP,

IN FORM AND
SUBSTANCE SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT

THAT THE PROPOSED
SALE, TRANSFER OR OTHER DISPOSITION MAY BE

EFFECTED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT AND UNDER

APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

AMENDED AND RESTATED AS OF JUNE 25, 2007

 

TABLE OF CONTENTS

 

	
  ARTICLE I. DEFINED TERMS

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II. ORGANIZATIONAL
  MATTERS

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Organization

  	
  13

  
	
  Section 2.2

  	
  Name

  	
  13

  
	
  Section 2.3

  	
  Registered Office and Agent; Principal Office

  	
  13

  
	
  Section 2.4

  	
  Power of Attorney

  	
  13

  
	
  Section 2.5

  	
  Term

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE III. PURPOSE

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Purpose and Business

  	
  14

  
	
  Section 3.2

  	
  Powers

  	
  15

  
	
  Section 3.3

  	
  Partnership Only for Partnership Purposes Specified

  	
  15

  
	
  Section 3.4

  	
  Representations and Warranties by the Parties

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV. CAPITAL
  CONTRIBUTIONS

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Capital Contributions of the Partners

  	
  16

  
	
  Section 4.2

  	
  Classes of Partnership Units

  	
  16

  
	
  Section 4.3

  	
  Issuances of Additional Partnership Interests

  	
  16

  
	
  Section 4.4

  	
  Additional Funds and Capital Contributions

  	
  17

  
	
  Section 4.5

  	
  Stock Option Plan

  	
  18

  
	
  Section 4.6

  	
  No Interest; No Return

  	
  19

  
	
  Section 4.7

  	
  Conversion or Redemption of Contingent Conversion
  Units

  	
  19

  
	
  Section 4.8

  	
  Other Contribution Provisions

  	
  21

  
	
  Section 4.9

  	
  Not Publicly Traded

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE V. DISTRIBUTIONS

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Requirement and Characterization of Distributions

  	
  21

  
	
  Section 5.2

  	
  Distributions In-Kind

  	
  22

  
	
  Section 5.3

  	
  Amounts Withheld

  	
  22

  
	
  Section 5.4

  	
  Distributions Upon Liquidation

  	
  22

  
	
  Section 5.5

  	
  Distributions to Reflect Issuance of Additional
  Partnership Units

  	
  22

  
	
  Section 5.6

  	
  Restricted Distributions

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI. ALLOCATIONS

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Timing and Amount of Allocations of Net Income and
  Net Loss

  	
  22

  
	
  Section 6.2

  	
  General Allocations

  	
  22

  
	
  Section 6.3

  	
  Additional Allocation Provisions

  	
  24

  
	
  Section 6.4

  	
  Tax Allocations

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII. MANAGEMENT AND
  OPERATIONS OF BUSINESS

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Management

  	
  26

  
	
  Section 7.2

  	
  Certificate of Limited Partnership

  	
  29

  
	
  Section 7.3

  	
  Restrictions on General Partner’s Authority

  	
  29

  
	
  Section 7.4

  	
  Reimbursement of the General Partner and Parent

  	
  30

  
	
  Section 7.5

  	
  Outside Activities of the General Partner

  	
  31

  

 

 i
 

 

	
  Section 7.6

  	
  Contracts with Affiliates

  	
  31

  
	
  Section 7.7

  	
  Indemnification

  	
  32

  
	
  Section 7.8

  	
  Liability of the General Partner

  	
  33

  
	
  Section 7.9

  	
  Other Matters Concerning the General Partner and the
  Parent

  	
  34

  
	
  Section 7.10

  	
  Title to Partnership Assets

  	
  34

  
	
  Section 7.11

  	
  Reliance by Third Parties

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII. RIGHTS AND
  OBLIGATIONS OF LIMITED PARTNERS

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Limitation of Liability

  	
  35

  
	
  Section 8.2

  	
  Management of Business

  	
  35

  
	
  Section 8.3

  	
  Outside Activities of Limited Partners

  	
  35

  
	
  Section 8.4

  	
  Return of Capital

  	
  36

  
	
  Section 8.5

  	
  Adjustment Factor

  	
  36

  
	
  Section 8.6

  	
  Redemption Rights

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX. BOOKS, RECORDS,
  ACCOUNTING AND REPORTS

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Records and Accounting

  	
  38

  
	
  Section 9.2

  	
  Partnership Year

  	
  38

  
	
  Section 9.3

  	
  Reports

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE X. TAX MATTERS

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Preparation of Tax Returns

  	
  38

  
	
  Section 10.2

  	
  Tax Elections

  	
  39

  
	
  Section 10.3

  	
  Tax Matters Partner

  	
  39

  
	
  Section 10.4

  	
  Withholding

  	
  40

  
	
  Section 10.5

  	
  Organizational Expenses

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI. TRANSFERS AND
  WITHDRAWALS

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Transfer

  	
  40

  
	
  Section 11.2

  	
  Transfer of General Partner’s Partnership Interest

  	
  41

  
	
  Section 11.3

  	
  Transfer of Limited Partners’ Partnership Interests

  	
  41

  
	
  Section 11.4

  	
  Substituted Limited Partners

  	
  42

  
	
  Section 11.5

  	
  Assignees

  	
  43

  
	
  Section 11.6

  	
  General Provisions

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII. ADMISSION OF
  PARTNERS

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 12.1

  	
  Admission of Successor General Partner

  	
  44

  
	
  Section 12.2

  	
  Admission of Additional Limited Partners

  	
  44

  
	
  Section 12.3

  	
  Amendment of Agreement and Certificate of Limited
  Partnership

  	
  45

  
	
  Section 12.4

  	
  Limit on Number of Partners

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII.
  DISSOLUTION, LIQUIDATION AND TERMINATION

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 13.1

  	
  Dissolution

  	
  45

  
	
  Section 13.2

  	
  Winding Up

  	
  46

  
	
  Section 13.3

  	
  Deemed Distribution and Recontribution

  	
  48

  
	
  Section 13.4

  	
  Rights of Limited Partners

  	
  48

  
	
  Section 13.5

  	
  Notice of Dissolution

  	
  48

  
	
  Section 13.6

  	
  Cancellation of Certificate of Limited Partnership

  	
  48

  
	
  Section 13.7

  	
  Reasonable Time for Winding-Up

  	
  48

  

 

 ii
 

 

	
  ARTICLE XIV. PROCEDURES FOR ACTIONS AND CONSENTS OF
  PARTNERS; AMENDMENTS; MEETINGS

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 14.1

  	
  Procedures for Actions and Consents of Partners

  	
  48

  
	
  Section 14.2

  	
  Amendments

  	
  48

  
	
  Section 14.3

  	
  Meetings of the Partners

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV. GENERAL PROVISIONS

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 15.1

  	
  Addresses and Notice

  	
  49

  
	
  Section 15.2

  	
  Titles and Captions

  	
  49

  
	
  Section 15.3

  	
  Pronouns and Plurals

  	
  50

  
	
  Section 15.4

  	
  Further Action

  	
  50

  
	
  Section 15.5

  	
  Binding Effect

  	
  50

  
	
  Section 15.6

  	
  Waiver

  	
  50

  
	
  Section 15.7

  	
  Counterparts

  	
  50

  
	
  Section 15.8

  	
  Applicable Law

  	
  50

  
	
  Section 15.9

  	
  Entire Agreement

  	
  50

  
	
  Section 15.10

  	
  Invalidity of Provisions

  	
  50

  
	
  Section 15.11

  	
  Limitation to Preserve REIT Status

  	
  50

  
	
  Section 15.12

  	
  No Partition

  	
  51

  
	
  Section 15.13

  	
  No Third-Party Rights Created Hereby

  	
  51

  
	
  Section 15.14

  	
  No Rights as Shareholders of General Partner or
  Stockholders of Parent

  	
  51

  
	
  Section 15.15

  	
  Creditors

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI. SERIES A
  PARTICIPATING REDEEMABLE PREFERRED UNITS

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 16.1

  	
  Designation and Number

  	
  51

  
	
  Section 16.2

  	
  Distributions

  	
  52

  
	
  Section 16.3

  	
  Liquidation Proceeds

  	
  52

  
	
  Section 16.4

  	
  Redemption

  	
  53

  
	
  Section 16.5

  	
  Ranking

  	
  55

  
	
  Section 16.6

  	
  Voting Rights

  	
  55

  
	
  Section 16.7

  	
  Transfer Restrictions

  	
  55

  
	
  Section 16.8

  	
  No Conversion Rights

  	
  55

  
	
  Section 16.9

  	
  No Sinking Fund

  	
  55

  
	
  Section 16.10

  	
  Article 8 Opt-In

  	
  56

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  PARTNERS AND PARTNERSHIP UNITS

  	
  A-1

  
	
  EXHIBIT B

  	
  NOTICE OF REDEMPTION

  	
  B-1

  
	
  EXHIBIT C

  	
  OBLIGATED PARTNERS AND PROTECTED AMOUNTS

  	
  C-1

  
	
  EXHIBIT D

  	
  LIST OF WHOLLY OWNED EARLY STAGE LEASE-UP STORAGE
  FACILITIES

  	
  D-1

  
	
  EXHIBIT E

  	
  NOTICE OF SERIES A PREFERRED REDEMPTION

  	
  E-1

  
				

 

 iii

SECOND
AMENDED AND RESTATED AGREEMENT OF LIMITED

PARTNERSHIP
OF EXTRA SPACE STORAGE LP

THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF EXTRA SPACE STORAGE LP, dated as of June 25, 2007 is entered
into by and among ESS Holdings Business Trust I, a Massachusetts business trust
(the “General Partner”) and the limited partners listed on Exhibit A
hereto (each a “Limited Partner”).

WHEREAS, the General Partner and the Parent Limited
Partner entered into that certain First Amended and Restated Agreement of
Limited Partnership of Extra Space Storage LP dated as of August 17, 2004 (the “First
Amended and Restated Partnership Agreement”); and

WHEREAS, the General Partner and the Parent Limited
Partner desire to amend and restate the First Amended and Restated Partnership
Agreement in its entirety by entering into this Second Amended and Restated
Agreement of Limited Partnership.

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

ARTICLE
I.

DEFINED TERMS

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

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

“Actions” has the meaning set forth in Section
7.7 hereof.

“Additional Funds” has the meaning set forth in
Section 4.4.A hereof.

“Additional Limited Partner” means a Person who
is admitted to the Partnership as a Limited Partner pursuant to Section 4.3
and Section 12.2 hereof and who is shown as such on the books and
records of the Partnership.

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

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

“Adjustment Factor” means 1.0; provided,
however, that in the event that:

(i)            the
Parent (a) declares or pays a dividend on its outstanding REIT Shares in REIT
Shares or makes a distribution to all holders of its outstanding REIT Shares in
REIT Shares, (b) splits or subdivides its outstanding REIT Shares or (c)
effects a reverse stock split or otherwise combines its 

 1
 

outstanding REIT Shares
into a smaller number of REIT Shares, the Adjustment Factor shall be adjusted
by multiplying the Adjustment Factor previously in effect by a fraction, (i)
the numerator of which shall be the number of REIT Shares issued and
outstanding on the record date for such dividend, distribution, split,
subdivision, reverse split or combination (assuming for such purposes that such
dividend, distribution, split, subdivision, reverse split or combination has
occurred as of such time) and (ii) the denominator of which shall be the actual
number of REIT Shares (determined without the above assumption) issued and
outstanding on the record date for such dividend, distribution, split,
subdivision, reverse split or combination;

(ii)           the
Parent distributes any rights, options or warrants to all holders of its REIT
Shares to subscribe for or to purchase or to otherwise acquire REIT Shares (or
other securities or rights convertible into, exchangeable for or exercisable
for REIT Shares) at a price per share less than the Value of a REIT Share on
the record date for such distribution (each a “Distributed Right”), then
the Adjustment Factor shall be adjusted by multiplying the Adjustment Factor
previously in effect by a fraction (a) the numerator of which shall be the
number of REIT Shares issued and outstanding on the record date plus the
maximum number of REIT Shares purchasable under such Distributed Rights and (b)
the denominator of which shall be the number of REIT Shares issued and outstanding
on the record date plus a fraction (1) the numerator of which is the maximum
number of REIT Shares purchasable under such Distributed Rights times the
minimum purchase price per REIT Share under such Distributed Rights and (2) the
denominator of which is the Value of a REIT Share as of the record date; provided,
however, that, if any such Distributed Rights expire or become no longer
exercisable, then the Adjustment Factor shall be adjusted, effective
retroactive to the date of distribution of the Distributed Rights, to reflect a
reduced maximum number of REIT Shares or any change in the minimum purchase
price for the purposes of the above fraction; and

(iii)          the Parent shall, by dividend or otherwise,
distribute to all holders of its REIT Shares evidences of its indebtedness or
assets (including securities, but excluding any dividend or distribution
referred to in subsection (i) above), which evidences of indebtedness or assets
relate to assets not received by the Parent or its Subsidiaries pursuant to a pro rata distribution by the Partnership,
then the Adjustment Factor shall be adjusted to equal the amount determined by
multiplying the Adjustment Factor in effect immediately prior to the close of
business on the date fixed for determination of stockholders entitled to
receive such distribution by a fraction (i) the numerator of which shall be
such Value of a REIT Share on the date fixed for such determination and (ii)
the denominator of which shall be the Value of a REIT Share on the dates fixed
for such determination less the then fair market value (as determined by the
REIT, whose determination shall be conclusive) of the portion of the evidences
of indebtedness or assets so distributed applicable to one REIT Share.

Any adjustments to the Adjustment Factor shall become
effective immediately after the effective date of such event, retroactive to
the record date, if any, for such event.

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

“Agreement” means this Second Amendment and
Restated Agreement of Limited Partnership of Extra Space Storage LP, as it may
be amended, supplemented or restated from time to time.

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

“Available Cash” means, with respect to any
period for which such calculation is being made, the amount of cash available
for distribution by the Partnership as determined by the General Partner.

 2
 

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

“Bylaws” means the Bylaws of the Parent, as
amended, supplemented or restated from time to time.

“Capital Account” means, with respect to any
Partner, the Capital Account maintained by the General Partner for such Partner
on the Partnership’s books and records in accordance with the following
provisions:

A.            To
each Partner’s Capital Account, there shall be added such Partner’s Capital
Contributions, such Partner’s distributive share of Net Income and any items in
the nature of income or gain that are specially allocated pursuant to Section
6.3 hereof, and the principal amount of any Partnership liabilities assumed
by such Partner or that are secured by any property distributed to such
Partner.

B.            From
each Partner’s Capital Account, there shall be subtracted the amount of cash
and the Gross Asset Value of any property distributed to such Partner pursuant
to any provision of this Agreement, such Partner’s distributive share of Net
Losses and any items in the nature of expenses or losses that are specially
allocated pursuant to Section 6.3 hereof, and the principal amount of
any liabilities of such Partner assumed by the Partnership or that are secured
by any property contributed by such Partner to the Partnership.

C.            In
the event any interest in the Partnership is Transferred in accordance with the
terms of this Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent that it relates to the Transferred interest.

D.            In
determining the principal amount of any liability for purposes of subsections
(a) and (b) hereof, there shall be taken into account Code Section 752(c) and
any other applicable provisions of the Code and Regulations.

E.             The
provisions of this Agreement relating to the maintenance of Capital Accounts
are intended to comply with Regulations Sections 1.704-1(b) and 1.704-2, and
shall be interpreted and applied in a manner consistent with such Regulations.
If the General Partner shall determine that it is prudent to modify the manner
in which the Capital Accounts are maintained in order to comply with such
Regulations, the General Partner may make such modification provided
that such modification will not have a material effect on the amounts
distributable to any Partner without such Partner’s Consent. The General
Partner also shall (i) make any adjustments that are necessary or appropriate
to maintain equality between the Capital Accounts of the Partners and the
amount of Partnership capital reflected on the Partnership’s balance sheet, as
computed for book purposes, in accordance with Regulations Section
1.704-1(b)(2)(iv)(q) and (ii) make any appropriate modifications in the event
that unanticipated events might otherwise cause this Agreement not to comply
with Regulations Section 1.704-1(b) or Section 1.704-2.

“Capital Account Deficit” has the meaning set
forth in Section 13.2.C hereof.

“Capital Contribution” means, with respect to
any Partner, the amount of money and the initial Gross Asset Value of any
Contributed Property that such Partner contributes to the Partnership or is
deemed to contribute pursuant to Section 4.5 hereof.

“Cash Amount” means, with respect to a
Tendering Partner, an amount of cash equal to the product of (A) the Value of a
REIT Share and (B) such Tendering Partner’s REIT Shares Amount determined as of
the date of receipt by the General Partner of such Tendering Partner’s Notice
of Redemption or, if such date is not a Business Day, the immediately preceding
Business Day.

“Certificate” means the Certificate of Limited
Partnership of the Partnership filed in the office of the Secretary of State of
the State of Delaware on May 5, 2004, as amended from time to time in
accordance with the terms hereof and the Act.

 3
 

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

“Closing Price” has the meaning set forth in
the definition of “Value.”

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

“Company Employees” means the employees of the
Partnership, the Parent and any of their subsidiaries.

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

“Contingent Conversion Shares” means a
contingent conversion share of the Parent, par value $.01 per share.

“Contingent Conversion Units” has the meaning
set forth in Section 4.2 hereof.

“Contributed Property” means each item of
Property or other asset, in such form as may be permitted by the Act, but
excluding cash, contributed or deemed contributed to the Partnership (or deemed
contributed by the Partnership to a “new” partnership pursuant to Code Section
708) net of any liabilities assumed by the Partnership relating to such
Contributed Property and any liability to which such Contributed Property is
subject.

“Contribution Agreement” means that certain
Contribution Agreement dated as of June 15, 2007 by and among the Partnership
and those entities identified therein as contributors to the Partnership.

“Conversion Date” has the meaning set forth in Section
4.7.C hereof.

“Conversion Percentage” has the meaning set
forth in Section 4.7.C hereof.

“Debt” means, as to any Person, as of any date
of determination, (i) all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services; (ii) all amounts owed by
such Person to banks or other Persons in respect of reimbursement obligations
under letters of credit, surety bonds and other similar instruments
guaranteeing payment or other performance of obligations by such Person; (iii)
all indebtedness for borrowed money or for the deferred purchase price of
property or services secured by any lien on any property owned by such Person,
to the extent attributable to such Person’s interest in such property, even though
such Person has not assumed or become liable for the payment thereof; and (iv)
lease obligations of such Person that, in accordance with generally accepted
accounting principles, should be capitalized.

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

“Distributed Right” has the meaning set forth
in the definition of “Adjustment Factor.”

“Effective Date” means the date of closing of
the initial public offering of REIT Shares.

“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended.

 4
 

“Event” has the meaning set forth in Section
4.7.A hereof.

“Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“First Amended and Restated Partnership Agreement”
has the meaning set forth in the Recitals.

“Funding Debt” means the incurrence of any Debt
for the purpose of providing funds to the Partnership by or on behalf of the
Parent or any wholly owned subsidiary of the Parent.

“General Partner” means ESS Holdings Business
Trust I, a Massachusetts business trust, and its successors and assigns, as the
general partner of the Partnership.

“General Partner Interest” means the
Partnership Interest held by the General Partner, which Partnership Interest is
an interest as a general partner under the Act. A General Partner Interest may
be expressed as a number of OP Units, Contingent Conversion Units, Preferred
Units, Junior Units or any other Partnership Units.

“General Partner Loan” has the meaning set
forth in Section 4.4.D hereof.

“Gross Asset Value” means, with respect to any
asset, the 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 as determined by
the General Partner.

(b)           The
Gross Asset Values of all Partnership assets immediately prior to the occurrence
of any event described in clause (i), clause (ii), clause (iii), clause (iv) or
clause (v) hereof shall be adjusted to equal their respective gross fair market
values, as determined by the General Partner using such reasonable method of
valuation as it may adopt, as of the following times:

(i)            the acquisition of an
additional interest in the Partnership (other than in connection with the
execution of this Agreement but including, without limitation, acquisitions
pursuant to Section 4.3 hereof or contributions or deemed contributions
by the General Partner pursuant to Section 4.3 hereof) by a new or
existing Partner in exchange for more than a de
minimis Capital Contribution, if the General Partner reasonably
determines that such adjustment is necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership;

(ii)           the distribution by the
Partnership to a Partner of more than a de
minimis amount of Property as consideration for an interest in the
Partnership, if the General Partner reasonably determines that such adjustment
is necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership;

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

(iv)          upon the admission of a
successor General Partner pursuant to Section 12.1 hereof;

(v)           the conversion of any
Contingent Conversion Units pursuant to Section 4.7.A hereof; and

(vi)          at such other times as
the General Partner shall reasonably determine necessary or advisable in order
to comply with Regulations Sections 1.704-1(b) and 1.704-2.

(c)           The
Gross Asset Value of any Partnership asset distributed to a Partner shall be
the gross fair market value of such asset on the date of distribution as
determined by the distributee and the General Partner provided that, if
the distributee is the General Partner or if the distributee and the General
Partner cannot agree on 

 5
 

such a determination, such gross fair market value
shall be determined by an independent third party experienced in the valuation
of similar assets, selected by the General Partner or the Parent in good faith.

(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 Code
Section 734(b) or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this subsection (d) to the
extent that the General Partner reasonably determines that an adjustment
pursuant to subsection (b) above is necessary or appropriate in connection with
a transaction that would otherwise result in an adjustment pursuant to this
subsection (d).

(e)           If
the Gross Asset Value of a Partnership asset has been determined or adjusted
pursuant to subsection (a), subsection (b) or subsection (d) above, such Gross
Asset Value shall thereafter be adjusted by the Depreciation taken into account
with respect to such asset for purposes of computing Net Income and Net Losses.

“Holder” means either (a) a Partner or (b) an
Assignee, owning a Partnership Unit, that is treated as a member of the
Partnership for federal income tax purposes.

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

“Indemnitee” means (i) any Person made a party
to a proceeding by reason of its status as (A) the General Partner or the
Parent or any successor thereto or (B) a trustee of the General Partner, a
director of the Parent or an officer or employee of the Partnership, the
General Partner or the Parent and (ii) such other Persons (including Affiliates
of the General Partner, the Partnership or the Parent) as the General Partner
may designate from time to time (whether before or after the event giving rise
to potential liability), in its sole and absolute discretion.

“IPO” means the initial public offering of REIT
Shares.

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

“Junior Share” means a share of capital stock
of the Parent now or hereafter authorized or reclassified that has dividend
rights, or rights upon liquidation, winding up and dissolution, that are junior
in rank to the REIT Shares. For purposes of this definition, a Contingent
Conversion Share shall not be considered a Junior Share.

 6
 

“Junior Unit” means a fractional share of the
Partnership Interests that the General Partner has authorized pursuant to Section
4.1, 4.3 or 4.4 hereof that has distribution rights, or
rights upon liquidation, winding up and dissolution, that are junior in rank to
the OP Units and the Preferred Units. For purposes of this definition, a
Contingent Conversion Unit shall not be considered a Junior Unit.

“Lease-Up NOI” has the meaning set forth in Section
4.7.C hereof.

“Limited Partner” means any Person named as a
Limited Partner in Exhibit A attached hereto, as such Exhibit A
may be amended from time to time, or any Substituted Limited Partner or
Additional Limited Partner, in such Person’s capacity as a Limited Partner in
the Partnership.

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

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

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

“Majority in Interest of the Outside Limited
Partners” means Limited Partners (excluding for this purpose (i) any
Limited Partnership Interests held by the Parent or its Subsidiaries, (ii) any
Person of which the Parent or its Subsidiaries directly or indirectly owns or
controls more than 50% of the voting interests and (iii) any Person directly or
indirectly owning or controlling more than 50% of the outstanding interests of
the General Partner) holding more than 50% of the outstanding OP Units held by
all Limited Partners who are not excluded for the purposes hereof.

“Mandatory Conversion Notice” has the meaning
set forth in Section 4.7.C hereof.

“Market Price” has the meaning set forth in the
definition of “Value.”

“Measurement Period” has the meaning set forth
in Section 4.7.C hereof.

“Net Income” or “Net Loss” means, for
each Partnership Year of the Partnership, an amount equal to the Partnership’s
taxable income or loss for such year, determined in accordance with Code
Section 703(a) (for this purpose, all items of income, gain, loss or deduction
required to be stated separately pursuant to Code Section 703(a)(1) shall be
included in taxable income or loss), with the following adjustments:

(a)           Any
income of the Partnership that is exempt from federal income tax and not
otherwise taken into account in computing Net Income (or Net Loss) pursuant to
this definition of “Net Income” or “Net Loss” shall be added to
(or subtracted from, as the case may be) such taxable income (or loss);

(b)           Any
expenditure of the Partnership described in Code Section 705(a)(2)(B) or
treated as a Code Section 705(a)(2)(B) expenditure pursuant to Regulations
Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing
Net Income (or Net Loss) pursuant to this definition of “Net Income” or “Net
Loss,” shall be subtracted from (or added to, as the case may be) such
taxable income (or loss);

(c)           In
the event the Gross Asset Value of any Partnership asset is adjusted pursuant
to subsection (b) or subsection (c) of the definition of “Gross Asset Value,”
the amount of such adjustment shall be taken into account as gain or loss from
the disposition of such asset for purposes of computing Net Income or Net Loss;

(d)           Gain
or loss resulting from any disposition of property with respect to which gain
or loss is recognized for federal income tax purposes shall be computed by
reference to the Gross Asset Value of the property disposed of, notwithstanding
that the adjusted tax basis of such property differs from its Gross Asset
Value;

 7
 

(e)           In
lieu of the depreciation, amortization and other cost recovery deductions that
would otherwise be taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Partnership Year;

(f)            To
the extent that an adjustment to the adjusted tax basis of any Partnership
asset pursuant to Code Section 734(b) or Code Section 743(b) is required
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into
account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Partner’s interest in the Partnership, the amount of
such adjustment shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases the
basis of the asset) from the disposition of the asset and shall be taken into
account for purposes of computing Net Income or Net Loss; and

(g)           
Notwithstanding any other provision of this definition of “Net Income”
or “Net Loss,” any item that is specially allocated pursuant to Section
6.3 hereof shall not be taken into account in computing Net Income or Net
Loss. The amounts of the items of Partnership income, gain, loss or deduction
available to be specially allocated pursuant to Section 6.3 hereof shall
be determined by applying rules analogous to those set forth in this definition
of “Net Income” or “Net Loss.”

“New Securities” means (i) any rights, options,
warrants or convertible or exchangeable securities having the right to
subscribe for or purchase REIT Shares, Contingent Conversion Shares, Preferred
Shares or Junior Shares, except that “New Securities” shall not mean any
Preferred Shares, Junior Shares or grants under the Stock Option Plans or (ii)
any Debt issued by the REIT that provides any of the rights described in clause
(i).

“Nonrecourse Deductions” has the meaning set
forth in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse
Deductions for a Partnership Year shall be determined in accordance with the
rules of Regulations Section 1.704-2(c).

“Nonrecourse Liability” has the meaning set
forth in Regulations Section 1.752-1(a)(2).

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

“Notice of Series A Preferred Redemption” shall
mean the Notice of Series A Preferred Redemption substantially in the form of
Exhibit E attached to this Agreement.

“Obligated Partner” means a Partner who has
agreed in writing to be an Obligated Partner and has agreed and is obligated to
make certain contributions, not in excess of such Obligated Partner’s Protected
Amount, to the Partnership with respect to such Partner’s Capital Account
Deficit upon the occurrence of certain events.

“OP Unit” means a fractional share of the
Partnership Interests of all Partners issued pursuant to Sections 4.1
and 4.3 hereof, but does not include any Contingent Conversion Unit,
Preferred Unit, Junior Unit or any other Partnership Unit specified in a
Partnership Unit Designation as being other than an OP Unit; provided, however,
that the General Partner Interest and the Limited Partner Interests shall have
the differences in rights and privileges as specified in this Agreement.

“Outside Director” shall mean a director of the
Parent who is not also an officer or employee of the Parent.

“Ownership Limit” means the applicable
restriction or restrictions on ownership of shares of the Parent imposed under
the Charter.

“Parent” means Extra Space Storage Inc., a
Maryland corporation.

“Parent Limited Partner” means ESS Holdings
Business Trust II, a Massachusetts business trust, and its successors and
assigns, as a limited partner of the Partnership in its capacity as limited
partner of the Partnership.

 8
 

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

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

“Partner Nonrecourse Debt” has the meaning set
forth in Regulations Section 1.704-2(b)(4).”Partner Nonrecourse Deductions”
has the meaning set forth in Regulations Section 1.704-2(i)(2), and the amount
of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt
for a Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(i)(2).

“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 held by either a Limited Partner or the General
Partner and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement. A Partnership Interest may be expressed as a number of OP
Units, Contingent Conversion Units, Preferred Units, Junior Units or other
Partnership Units.

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

“Partnership Record Date” means a record date
established by the General Partner for the distribution of Available Cash
pursuant to Section 5.1 hereof, which record date shall generally 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” shall mean an OP Unit, a
Contingent Conversion Unit, a Preferred Unit, a Junior Unit or any other
fractional share of the Partnership Interests that the General Partner has
authorized pursuant to Section 4.1, 4.3 or 4.4 hereof. The
ownership of Partnership Units may be evidenced by a certificate for units as
the General Partner may determine with respect to any class of Partnership
Units issued from time to time under Section 4.1 and 4.3.

“Partnership Unit Designation” has the meaning
set forth in Section 4.3 hereof.

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

“Percentage Interest” means, as to a Partner
holding a class or series of Partnership Interests, its interest in such class
or series as determined by dividing the Partnership Units of such class or
series owned by such Partner by the total number of Partnership Units of such
class then outstanding as specified in Exhibit A attached hereto, as
such Exhibit may be amended from time to time. If the Partnership issues
additional classes or series of Partnership Interests other than as
contemplated herein, the interest in the Partnership among the classes or
series of Partnership Interests shall be determined as set forth in the
amendment to the Partnership Agreement setting forth the rights and privileges
of such additional classes or series of Partnership Interest, if any, as
contemplated by Section 4.3.

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

“Preferred Distribution Shortfall” means, with
respect to any Partnership Interests that are entitled to any preference in
distributions of Available Cash pursuant to this Agreement, the aggregate
amount of the required distributions of Available Cash for such outstanding
Partnership Interests for all periods minus the
aggregate amount 

 9
 

of the distributions made with respect to the required
distributions of Available Cash for such outstanding Partnership Interests
pursuant to this Agreement.

“Preferred Share” means a share of capital
stock of the Parent now or hereafter authorized or reclassified that has
dividend rights, or rights upon liquidation, winding up and dissolution, that
are superior or prior to the REIT Shares.

“Preferred Unit” means a fractional share of
the Partnership Interests that the General Partner has authorized pursuant to Section
4.1, 4.3 or 4.4 hereof that has distribution rights, or
rights upon liquidation, winding up and dissolution, that are superior or prior
to the OP Units, including the Series A Preferred Units.

“Properties” means any assets and property of
the Partnership such as, but not limited to, interests in real property and
personal property, including, without limitation, fee interests, interests in
ground leases, interests in limited liability companies, joint ventures or
partnerships, interests in mortgages, and Debt instruments as the Partnership
may hold from time to time and “Property” shall mean any one such asset
or property.

“Protected Amount” means the amount specified
on Exhibit C with respect to any Obligated Partner, as such Exhibit
may be amended from time to time.

“Publicly Traded” means listed or admitted to
trading on the New York Stock Exchange, the American Stock Exchange, the NASDAQ
Global Market or another national securities exchange, or any successor to the
foregoing.

“Qualified REIT Subsidiary” means a qualified
REIT subsidiary of the Parent within the meaning of Code Section 856(i)(2).

“Qualified Transferee” means an “Accredited
Investor” as defined in Rule 501 promulgated under the Securities Act.

“Qualifying Party” means (a) a Limited Partner
set forth in Schedule A hereto, (b) an Additional Limited Partner or (c)
a Substituted Limited Partner succeeding to all or part of the Limited Partner
Interest of (i) a Limited Partner set forth in Schedule A hereto or (ii)
an Additional Limited Partner.

“Redemption” has the meaning set forth in Section
8.6.A hereof.

“Regulations” means the applicable income tax
regulations under the Code, whether such regulations are in proposed, temporary
or final form, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).”Regulatory Allocations”
has the meaning set forth in Section 6.3.B(vii) hereof.

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

“REIT Payment” has the meaning set forth in Section
15.11 hereof.

“REIT Requirements” has the meaning set forth
in Section 5.1 hereof.

“REIT Share” means a share of the Parent’s
common stock, par value $0.01 per share. Where relevant in this Agreement, “REIT
Share” includes shares of the Parent’s common stock, par value $0.01 per
share, issued upon conversion or exchange of Contingent Conversion Shares,
Preferred Shares or Junior Shares.

“REIT Shares Amount” means a number of REIT
Shares equal to the product of (a) the number of Tendered Units and (b) the Adjustment
Factor in effect on the Specified Redemption Date with respect to such Tendered
Units; provided, however, that, in the event that the Parent
issues to all holders of REIT Shares as of a certain record date rights,
options, warrants or convertible or exchangeable securities entitling the
Parent’s stockholders to subscribe for or purchase REIT Shares, or any other
securities or property (collectively, the 

 10
 

“Rights”), with the record date for such Rights
issuance falling within the period starting on the date of the Notice of
Redemption and ending on the day immediately preceding the Specified Redemption
Date, which Rights will not be distributed before the relevant Specified
Redemption Date, then the REIT Shares Amount shall also include such Rights that
a holder of that number of REIT Shares would be entitled to receive, expressed,
where relevant hereunder, in a number of REIT Shares determined by the Parent
in good faith.

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

“Securities Act” means the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.

“Series A Preferred Capital” means an amount,
per Series A Preferred Unit, equal to the sum of (i) the Series A Preferred
Stated Value and (ii) any Preferred Distribution Shortfall per Series A
Preferred Unit.

“Series A Preferred Priority Return” means,
with respect to each Series A Preferred Unit, an amount equal to the sum of (a)
5.00% per annum on the Series A Preferred Stated Value per Series A Preferred
Unit, commencing on the date of original issuance of the Series A Preferred
Units and (b) the Series A Preferred Return. 
For any partial quarterly period, the amount of the Series A Preferred
Priority Return shall be prorated and computed on the basis of a 360-day year
consisting of twelve 30-day months.

“Series A Preferred Redemption” has the meaning
set forth in Section 16.4.A hereof.

“Series A Preferred Redemption Amount” has the
meaning set forth in Section 16.4.A hereof.

“Series A Preferred Redemption Date” means the
10th Business Day following receipt by the General Partner of a Notice of
Series A Preferred Redemption; provided that, if the REIT Shares are not
Publicly Traded, the Series A Preferred Redemption Date means the 30th Business
Day following receipt by the General Partner of a Notice of Series A Preferred
Redemption.

“Series A Preferred REIT Shares Amount” means,
with respect to each Series A Preferred Unit, a number of REIT Shares equal to
the quotient of (i) the Series A Preferred Redemption Amount divided by (ii)
the Value of a REIT Share as of the date of the Series A Preferred Redemption
(to the extent then permitted by the rules of the New York Stock Exchange
without having to obtain the approval of Parent’s stockholders); provided,
however, that, in the event that the Parent issues to all holders of REIT
Shares as of a certain record date Rights, with the record date for such Rights
issuance falling within the period starting on the date of the Notice of Series
A Preferred Redemption and ending on the day immediately preceding the Series A
Preferred Redemption Date, which Rights will not be distributed before the
relevant Series A Preferred Redemption Date, then the Series A Preferred REIT
Shares Amount shall also include such Rights that a holder of that number of
REIT Shares would be entitled to receive, expressed, where relevant hereunder,
in a number of REIT Shares determined by the Parent in good faith.

“Series A Preferred Return” means the amount of
distributions to which Holders of Series A Preferred Units would be entitled to
receive if the Series A Preferred Units were treated as part of a single class
of units with the OP Units and the Series A Preferred Units shared in
distributions with the OP Units pursuant to Section 5.1(3) proportionately
based on the total number of outstanding Series A Preferred Units and OP Units.

“Series A Preferred Stated Value” means, with
respect to each Series A Preferred Unit, an amount equal to (i) the “Gross
Preference Amount” divided by (ii) the aggregate number of Series A Preferred
Units that have been issued by the Partnership as of the date of determination
(regardless of whether such Series A Preferred Units are then
outstanding).  As used herein, “Gross
Preference Amount” shall mean $99,295,885.47; provided that, the Gross
Preference Amount shall be increased by $7,168,969.76 to the extent the
Partnership has acquired the Hayward Property (as defined in the Contribution
Agreement); provided further, that the Gross Preference Amount shall be
increased by $8,535,144.77 to the extent the Partnership has acquired the San
Leandro Property (as defined in the Contribution Agreement).

 11
 

“Series A Preferred Unit Distribution Payment Date”
shall have the meaning set forth in Section 16.2.A hereof.

“Series A Preferred Units” means the
Partnership’s Series A Participating Redeemable Preferred Units, with the
rights, priorities and preferences set forth herein.

“Services Agreement” means any management,
development or advisory agreement with a property and/or asset manager for the
provision of property management, asset management, leasing, development and/or
similar services with respect to the Properties and any agreement for the
provision of services of accountants, legal counsel, appraisers, insurers,
brokers, transfer agents, registrars, developers, financial advisors and other
professional services.

“Specified Redemption Date” means the 10th Business Day following receipt by the General
Partner of a Notice of Redemption; provided that, if the REIT Shares are
not Publicly Traded, the Specified Redemption Date means the 30th Business Day following receipt by the General
Partner of a Notice of Redemption.

“Stock Option Plan” means any stock option plan
hereafter adopted by the Partnership or the Parent, including the Parent’s 2004
Long Term Incentive Compensation Plan.

“Subsidiary” means, with respect to any Person,
any other Person (which is not an individual) of which a majority of (i) the
voting power of the voting equity securities or (ii) the outstanding equity
interests is owned, directly or indirectly, by such Person.

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

“Tax Items” has the meaning set forth in Section
6.4.A hereof.

“Tendered Series A Preferred Units” has the
meaning set forth in Section 16.4.A hereof.

“Tendering Series A Preferred Unit Holder” has
the meaning set forth in Section 16.4.A hereof.

“Tendered Units” has the meaning set forth in Section
8.6.A hereof.

“Tendering Partner” has the meaning set forth
in Section 8.6.A hereof.

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

“Transfer,” when used with respect to a
Partnership Unit, or all or any portion of a Partnership Interest, means any
sale, assignment, bequest, conveyance, devise, gift (outright or in trust),
pledge, encumbrance, hypothecation, mortgage, exchange, transfer or other
disposition or act of alienation, whether voluntary or involuntary or by
operation of law; provided, however, that when the term is used
in Article XI hereof, “Transfer” does not include (a) any
Redemption of Partnership Units by the Partnership or the Parent, or
acquisition of Tendered Units by the General Partner or the Parent, pursuant to
Section 8.6 hereof or (b) any redemption of Partnership Units pursuant
to any Partnership Unit Designation. The terms “Transferred” and “Transferring”
have correlative meanings.

“Value” means, on any date of determination
with respect to a REIT Share, the average of the daily Market Prices for ten
consecutive trading days immediately preceding the date of determination except
that, as provided in Section 4.5.B hereof, the Market Price for the
trading day immediately preceding the date of exercise of a stock option under
any Stock Option Plan shall be substituted for such average of daily market
prices for purposes of Section 4.5 hereof; provided, however,
that for purposes of Section 8.6, the “date of determination” shall be
the date of receipt by the Parent of a Notice of Redemption or, if such date is
not a Business Day, the immediately preceding 

 12
 

Business Day; provided, further, that for purposes of
Section 16.4, the “date of determination” shall be the date of receipt by the
Parent of a Notice of Series A Preferred Redemption or, if such date is not a
Business Day, the immediately preceding Business Day.  The term “Market Price” on any date
shall mean, with respect to any class or series of outstanding REIT Shares, the
Closing Price for such REIT Shares on such date. The “Closing Price” on
any date shall mean the last sale price for such REIT Shares, regular way, or,
in case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, for such REIT Shares, in either case as reported
in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
such REIT Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported on the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which such REIT Shares are listed or admitted to trading or, if
such REIT Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price, or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System or, if such system is no longer in use, the principal other
automated quotation system that may then be in use or, if such REIT Shares are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in such REIT
Shares selected by the Board of Directors of the Parent or, in the event that
no trading price is available for such REIT Shares, the fair market value of
the REIT Shares, as determined in good faith by the Board of Directors of the
Parent.

In the event that the REIT Shares Amount includes
Rights (as defined in the definition of “REIT Shares Amount”) that a
holder of REIT Shares would be entitled to receive, then the Value of such
Rights shall be determined by the Parent acting in good faith on the basis of
such quotations and other information as it considers, in its reasonable
judgment, appropriate.

ARTICLE
II.

ORGANIZATIONAL MATTERS

Section 2.1            Organization.  The Partnership is a limited partnership
organized pursuant to the provisions of the Act and upon the terms and subject
to the 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.

Section 2.2            Name. The name of
the Partnership is “Extra Space Storage LP” The
Partnership’s business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words “Limited Partnership,” “LP,” “L.P.,” “Ltd.” or
similar words or letters shall be included in the Partnership’s name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time and from time to time and shall notify
the Partners of such change in the next regular communication to the Partners.

Section 2.3            Registered Office and
Agent; Principal Office. The address of the registered office of the
Partnership in the State of Delaware is located at Corporation Service Company,
1013 Centre Road, Wilmington, Delaware 19805, and the registered agent for
service of process on the Partnership in the State of Delaware at such
registered office is Corporation Service Company. The principal office of the
Partnership is located at 2795 East Cottonwood Parkway, Suite 400, Salt Lake
City, UT 84121 or such other place as the General Partner may from time to time
designate by notice to the Limited Partners. The Partnership may maintain
offices at such other place or places within or outside the State of Delaware as
the General Partner deems advisable.

Section 2.4            Power of Attorney.

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

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(i)            execute, swear to, seal, acknowledge,
deliver, file and record in the appropriate public offices (a) all
certificates, documents and other instruments (including, without limitation,
this Agreement and the Certificate and all amendments, supplements or
restatements thereof) that the General Partner or the Liquidator deems
appropriate or necessary to form, qualify or continue the existence or
qualification of the Partnership as a limited partnership (or a partnership in
which the limited partners have limited liability to the extent provided by
applicable law) in the State of Delaware and in all other jurisdictions in
which the Partnership may conduct business or own property; (b) all instruments
that the General Partner or the 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 the Liquidator deems appropriate or
necessary to reflect the dissolution and liquidation of the Partnership
pursuant to the terms of this Agreement, including, without limitation, a
certificate of cancellation; (d) all conveyances and other instruments or
documents that the General Partner or the Liquidator deems appropriate or
necessary to reflect the distribution or exchange of assets of the Partnership
pursuant to the terms of this Agreement; (e) all instruments relating to the
admission, withdrawal, removal or substitution of any Partner pursuant to, or
other events described in, Article XI, Article XII, Article
XIII or Article XVI hereof or the Capital Contribution of any
Partner; and (f) all certificates, documents and other instruments relating to
the determination of the rights, preferences and privileges relating to
Partnership Interests; and

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

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

B.            The foregoing power of attorney is hereby
declared to be irrevocable and a special power coupled with an interest, in
recognition of the fact that each of the Limited Partners and Assignees will be
relying upon the power of the General Partner or the 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 or
Partnership Interest and shall extend to such Limited Partner’s or Assignee’s
heirs, successors, assigns and personal representatives. Each such Limited
Partner or Assignee hereby agrees to be bound by any representation made by the
General Partner or the Liquidator, acting in good faith pursuant to such power
of attorney; and each such Limited Partner or Assignee hereby waives any and
all defenses that may be available to contest, negate or disaffirm the action
of the General Partner or the Liquidator, taken in good faith under such power
of attorney. Each Limited Partner or Assignee shall execute and deliver to the
General Partner or the Liquidator, within 15 days after receipt of the General
Partner’s or the Liquidator’s request therefor, such further designation,
powers of attorney and other instruments as the General Partner or the
Liquidator, as the case may be, deems necessary to effectuate this Agreement
and the purposes of the Partnership.

Section 2.5            Term. Pursuant to
Section 17-217(d) of the Act, the term of the Partnership commenced on May 5,
2004 and shall continue until December 31, 2104 unless it is dissolved sooner
pursuant to the provisions of Article XIII hereof or as otherwise
provided by law.

ARTICLE
III.

PURPOSE

Section 3.1            Purpose and Business.
The purpose and nature of the Partnership is to conduct any business,
enterprise or activity permitted by or under the Act; provided, however,
such business and arrangements and interests may be limited to and conducted in
such a manner as to permit the Parent, in the sole and absolute discretion of
the General Partner, at all times to be classified as a REIT unless the Parent
in its sole discretion has chosen to cease to qualify as a REIT or has chosen
not to attempt to qualify as a REIT for any reason or for reasons 

 14
 

whether or not related to
the business conducted by the Partnership. Without limiting the General Partner’s
right in its sole discretion to cease qualifying as a REIT, the Partners
acknowledge that the status of the Parent as a REIT inures to the benefit of
all Partners and not solely to the Parent, the General Partner or its
Affiliates. In connection with the foregoing, the Partnership shall have full
power and authority to enter into, perform and carry out contracts of any kind,
to borrow and lend money and to issue and guarantee evidence of indebtedness,
whether or not secured by mortgage, deed of trust, pledge or other lien and,
directly or indirectly, to acquire and construct additional Properties
necessary, useful or desirable in connection with its business.

Section 3.2            Powers.

A.            The Partnership shall be 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.

B.            The Partnership may contribute from time to
time Partnership capital to one or more newly formed entities solely in
exchange for equity interests therein (or in a wholly owned subsidiary entity
thereof).

C.            Notwithstanding any other provision in this
Agreement, the General Partner may cause the Partnership not to take, or to
refrain from taking, any action that, in the judgment of the General Partner,
in its sole and absolute discretion, (i) could adversely affect the ability of
the Parent to continue to qualify as a REIT, (ii) could subject the Parent to
any additional taxes under Code Section 857 or Code Section 4981 or any other
related or successor provision of the Code or (iii) could violate any law or
regulation of any governmental body or agency having jurisdiction over the
General Partner, the Parent, their securities or the Partnership.

Section 3.3            Partnership Only for
Partnership Purposes Specified. This Agreement shall not be deemed to
create a company, venture or partnership between or among the Partners with
respect to any activities whatsoever other than the activities within the purposes
of the Partnership as specified in Section 3.1 hereof. Except as
otherwise provided in this Agreement, no Partner shall have any authority to
act for, bind, commit or assume any obligation or responsibility on behalf of
the Partnership, its properties or any other Partner. No Partner, in its
capacity as a Partner under this Agreement, shall be responsible or liable for
any indebtedness or obligation of another Partner, and the Partnership shall
not be responsible or liable for any indebtedness or obligation of any Partner,
incurred either before or after the execution and delivery of this Agreement by
such Partner, except as to those responsibilities, liabilities, indebtedness or
obligations incurred pursuant to and as limited by the terms of this Agreement
and the Act.

Section 3.4            Representations and
Warranties by the Parties.

A.            Each Partner (including, without
limitation, each Additional Limited Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner or a Substituted Limited
Partner, respectively) represents and warrants to the Partnership and each
other Partner that (i) the consummation of the transactions contemplated by
this Agreement to be performed by such Partner will not result in a breach or
violation of, or a default under, any material agreement by which such Partner
or any of such Partner’s property is bound, or any statute, regulation, order
or other law to which such Partner is subject, (ii) subject to the last
sentence of this Section 3.4.A, such Partner is neither a “foreign
person” within the meaning of Code Section 1445(f) nor a “foreign partner”
within the meaning of Code Section 1446(e), (iii) such Partner does not own,
directly or indirectly, (a) 9.9% or more of the total combined voting power of
all classes of stock entitled to vote, or 9.9% or more of the total number of
shares of all classes of stock, of any corporation that is a tenant of either
(I) the Parent or any Qualified REIT Subsidiary, (II) the Partnership or (III)
any partnership, venture or limited liability company of which the Parent, any
Qualified REIT Subsidiary or the Partnership is a member or (b) an interest of
9.9% or more in the assets or net profits of any tenant of either (I) the
Parent or any Qualified REIT Subsidiary, (II) the Partnership or (III) any
partnership, venture, or limited liability company of which the Parent, any
Qualified REIT Subsidiary or the Partnership is a member and (iv) this
Agreement is binding upon, and enforceable against, such Partner in accordance
with its terms. Notwithstanding anything contained herein to the contrary, in
the event that the representation contained in the foregoing clause (ii) would
be inaccurate if given by a Partner, such Partner (w) shall not be required to
make and shall not be deemed to have made such representation, if it delivers
to the General Partner in connection with or prior to its execution of this
Agreement written notice that it may not truthfully make 

 15
 

such representation, (x) hereby agrees that it is subject to, and
hereby authorizes the General Partner to withhold, all withholdings to which
such a “foreign person” or “foreign partner,” as applicable, is subject under
the Code and (y) hereby agrees to cooperate fully with the General Partner with
respect to such withholdings, including by effecting the timely completion and
delivery to the General Partner of all governmental forms required in
connection therewith.

B.            Each Partner (including, without
limitation, each Substituted Limited Partner as a condition to becoming a
Substituted Limited Partner) represents, warrants and agrees that it has
acquired and continues to hold its interest in the Partnership for its own
account for investment purposes only and not for the purpose of, or with a view
toward, the resale or distribution of all or any part thereof, and not with a
view toward selling or otherwise distributing such interest or any part thereof
at any particular time or under any predetermined circumstances. Each Partner
further represents and warrants that it is a sophisticated investor, able and
accustomed to handling sophisticated financial matters for itself, particularly
real estate investments, and that it has a sufficiently high net worth that it
does not anticipate a need for the funds that it has invested in the
Partnership in what it understands to be a highly speculative and illiquid
investment.

C.            The representations and warranties
contained in Sections 3.4.A and 3.4.B hereof shall survive the
execution and delivery of this Agreement by each Partner (and, in the case of
an Additional Limited Partner or a Substituted Limited Partner, the admission
of such Additional Limited Partner or Substituted Limited Partner as a Limited
Partner in the Partnership) and the dissolution, liquidation and termination of
the Partnership.

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

ARTICLE
IV.

CAPITAL CONTRIBUTIONS

Section 4.1            Capital Contributions
of the Partners. Each Partner has made a Capital Contribution to the
Partnership and owns Partnership Units in the amount and designation set forth
for such Partner on Exhibit A, as the same may be amended from time to
time by the General Partner to the extent necessary to reflect accurately
sales, exchanges, conversions or other Transfers, redemptions, Capital
Contributions, the issuance of additional Partnership Units, or similar events
having an effect on a Partner’s ownership of Partnership Units. Except as
provided by law or in Section 4.3, 10.4 or 13.2.D hereof,
the Partners shall have no obligation or right to make any additional Capital
Contributions or loans to the Partnership.

Section 4.2            Classes of Partnership
Units. From and after the Effective Date, subject to Section 4.3.A
below, the Partnership shall have three classes of Partnership Units entitled “Preferred
Units,” “OP Units” and “Contingent Conversion Units.” Subject
to Section 4.7, any of the Preferred Units, OP Units or Contingent
Conversion Units, at the election of the General Partner, in its sole and
absolute discretion, may be issued to newly admitted Partners in exchange for
any Capital Contributions by such Partners; provided that any Partnership
Unit that is not specifically designated by the General Partner as being of a
particular class shall be deemed to be an OP Unit. Each Contingent Conversion
Unit shall be converted automatically into an OP Unit as provided in Section
4.7 hereof without the requirement for any action by either the Partnership
or the Partner holding the Contingent Conversion Units.

Section 4.3            Issuances of
Additional Partnership Interests.

A.            General. Notwithstanding Section
7.3.B hereof, the General Partner is hereby authorized to cause the
Partnership to issue additional Partnership Interests, in the form of
Partnership Units, for any Partnership purpose, at any time or from time to
time, to the Partners (including the General Partner or Parent Limited Partner)
or to other Persons, and to admit such Persons as Additional Limited Partners,
for such consideration and on such terms and conditions as shall be established
by the General Partner in its sole and absolute discretion, all without the 

 16
 

approval of any Limited Partners. Without limiting the foregoing, the
General Partner is expressly authorized to cause the Partnership to issue
Partnership Units (i) upon the conversion, redemption or exchange of any Debt,
Partnership Units or other securities issued by the Partnership, (ii) for less
than fair market value, so long as the General Partner concludes in good faith
that such issuance is in the best interests of the Parent and the Partnership
and (iii) in connection with any merger of any other Person into the Partnership
or any Subsidiary of the Partnership if the applicable merger agreement
provides that Persons are to receive Partnership Units in exchange for their
interests in the Person merging into the Partnership or any Subsidiary of the
Partnership. Subject to Delaware law, any additional Partnership Interests may
be issued in one or more classes, or one or more series of any of such classes,
with such designations, preferences and relative, participating, optional or
other special rights, powers and duties as shall be determined by the General
Partner, in its sole and absolute discretion without the approval of any
Limited Partner, and which may be set forth in a written document thereafter
attached to and made an exhibit to this Agreement or incorporated into this Agreement
by amendment (each, a “Partnership Unit Designation”). Without limiting
the generality of the foregoing, the General Partner shall have authority to
specify (a) the allocations of items of Partnership income, gain, loss,
deduction and credit to each such class or series of Partnership Interests; (b)
the right of each such class or series of Partnership Interests to share in
Partnership distributions; (c) the rights of each such class or series of
Partnership Interests upon dissolution and liquidation of the Partnership; (d)
the voting rights, if any, of each such class or series of Partnership
Interests; and (e) the conversion, redemption or exchange rights applicable to
each such class or series of Partnership Interests. Upon the issuance of any additional
Partnership Interest, the General Partner shall amend this Agreement and/or Exhibit
A as appropriate to reflect such issuance.

B.            Issuances to the General Partner. No
additional Partnership Units shall be issued to the General Partner or Parent
Limited Partner unless (i) the additional Partnership Units are issued to all
Partners in proportion to their respective Percentage Interests with respect to
the class of Partnership Units so issued, (ii) (a) the additional Partnership
Units are (x) OP Units issued in connection with an issuance of REIT Shares or
(y) Partnership Units (other than OP Units) issued in connection with an
issuance of Contingent Conversion Shares, Preferred Shares, Junior Shares, New
Securities or other interests in the Parent (other than REIT Shares), which
Contingent Conversion Shares, Preferred Shares, Junior Shares, New Securities
or other interests have designations, preferences and other rights, terms and
provisions that are substantially the same as the designations, preferences and
other rights, terms and provisions of the additional Partnership Units issued
to the General Partner and (b) the Parent directly or indirectly contributes or
otherwise causes to be transferred to the Partnership the cash proceeds or
other consideration, if any, received in connection with the issuance of such
REIT Shares, Contingent Conversion Shares, Preferred Shares, Junior Shares, New
Securities or other interests in the Parent, (iii) the additional Partnership
Units are issued upon the conversion, redemption or exchange of Debt,
Partnership Units or other securities issued by the Partnership, or (iv) the
additional Partnership Units are issued pursuant to Section 4.7, 4.8
or 4.9. In the event that the Partnership issues additional Partnership
Units pursuant to this Section 4.3.B, the General Partner shall make
such revisions to this Agreement (including but not limited to the revisions
described in Sections 6.2.B and 8.6) and/or Exhibit A as
it determines are necessary to reflect the issuance of such additional
Partnership Interests.

C.            No Preemptive Rights. No Person,
including, without limitation, any Partner or Assignee, shall have any
preemptive, preferential, participation or similar right or rights to subscribe
for or acquire any Partnership Interest.

Section 4.4            Additional Funds and
Capital Contributions.

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

B.            Additional Capital Contributions.
The General Partner, on behalf of the Partnership, may obtain any Additional
Funds by accepting Capital Contributions from any Partners or other Persons. In
connection with any such Capital Contribution (of cash or property), the
General Partner is hereby authorized to cause the Partnership from time to time
to issue additional Partnership Units (as set forth in Section 4.3
above) in consideration therefor 

 17
 

and the Percentage Interests of the General Partner and the Limited
Partners shall be adjusted to reflect the issuance of such additional
Partnership Units.

C.            Loans by Third Parties. The General
Partner, on behalf of the Partnership, may obtain any Additional Funds by
causing the Partnership to incur Debt to any Person upon such terms as the
General Partner determines appropriate, including making such Debt convertible,
redeemable or exchangeable for Partnership Units; provided, however,
that the Partnership shall not incur any such Debt if (i) a breach, violation
or default of such Debt would be deemed to occur by virtue of the Transfer by
any Limited Partner of any Partnership Interest or (ii) such Debt is recourse
to any Partner (unless the Partner otherwise agrees).

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

E.             Issuance of Securities by the Parent.
The Parent shall not issue any additional REIT Shares, Contingent Conversion
Shares, Preferred Shares, Junior Shares or New Securities unless the Parent
contributes directly or indirectly the cash proceeds or other consideration, if
any, received from the issuance of such additional REIT Shares, Contingent
Conversion Shares, Preferred Shares, Junior Shares or New Securities, as the
case may be, and from the exercise of the rights contained in any such
additional New Securities, to the Partnership in exchange for (x) in the case
of an issuance of REIT Shares, Partnership Units, (y) in the case of an
issuance of Contingent Conversion Shares, Contingent Conversion Units or (z) in
the case of an issuance of Preferred Shares, Junior Shares or New Securities,
Partnership Units with designations, preferences and other rights, terms and
provisions that are substantially the same as the designations, preferences and
other rights, terms and provisions of such Contingent Conversion Shares,
Preferred Shares, Junior Shares or New Securities; provided, however,
that notwithstanding the foregoing, the Parent may issue REIT Shares,
Contingent Conversion Shares, Preferred Shares, Junior Shares or New Securities
(a) pursuant to Section 4.5,  8.6.B or 16.4 hereof, (b)
pursuant to a dividend or distribution (including any stock split) of REIT
Shares, Contingent Conversion Shares, Preferred Shares, Junior Shares or New
Securities to all of the holders of REIT Shares, Contingent Conversion Shares,
Preferred Shares, Junior Shares or New Securities, as the case may be, (c) upon
a conversion, redemption or exchange of Preferred Shares, (d) upon a conversion
of Junior Shares into REIT Shares, (e) upon a conversion, redemption, exchange
or exercise of Contingent Conversion Shares into REIT Shares, (f) upon a
conversion, redemption, exchange or exercise of New Securities or (g) pursuant
to share grants or awards made pursuant to any equity incentive plan of the
Parent (including the Parent’s 2004 Long Term Incentive Compensation Plan) . In
the event of any issuance of additional REIT Shares, Contingent Conversion
Shares, Preferred Shares, Junior Shares or New Securities by the Parent, and
the direct or indirect contribution to the Partnership, by the Parent, of the
cash proceeds or other consideration received from such issuance, the
Partnership shall pay the Parent’s expenses associated with such issuance,
including any underwriting discounts or commissions (it being understood that
payment of some or all of such expenses may be made by the Parent on behalf of
the Partnership out of the gross proceeds of such issuance prior to the direct
or indirect contribution of such proceeds by the Parent to the Partnership).

Section 4.5            Stock Option Plan.

A.            Options Granted to Company Employees and
Independent Directors. If at any time or from time to time, in connection
with a Stock Option Plan, a stock option granted to a Company Employee or
Outside Director is duly exercised:

 18
 

(i)            the Parent shall, as soon as practicable
after such exercise, make or cause to be made directly or indirectly a Capital
Contribution to the Partnership in an amount equal to the exercise price paid
to the Parent by such exercising party in connection with the exercise of such
stock option.

(ii)           Notwithstanding the amount of the Capital
Contribution actually made pursuant to Section 4.5.A(i) hereof, the
Parent shall be deemed to have contributed directly or indirectly to the
Partnership, as a Capital Contribution, in consideration of an additional
Limited Partner Interest (expressed in and as additional Partnership Units), an
amount equal to the Value of a REIT Share as of the date of exercise multiplied
by the number of REIT Shares then being issued in connection with the
exercise of such stock option.

(iii)          An equitable Percentage Interest adjustment
shall be made in which the General Partner shall be treated as having made a
cash contribution equal to the amount described in Section 4.5.A(ii)
hereof.

B.            Special Valuation Rule. For purposes
of this Section 4.5, in determining the Value of a REIT Share, only the
trading date immediately preceding the exercise of the relevant stock option
under the Stock Option Plan shall be considered.

C.            Future Stock Incentive Plans.
Nothing in this Agreement shall be construed or applied to preclude or restrain
the Parent from adopting, modifying or terminating stock incentive plans,
including any Stock Option Plan, for the benefit of employees, directors or
other business associates of the Parent, the Partnership or any of their
Affiliates. The Limited Partners acknowledge and agree that, in the event that
any such plan is adopted, modified or terminated by the Parent, amendments to
this Section 4.5 may become necessary or advisable and that any approval
or consent of the Limited Partners required pursuant to the terms of this
Agreement in order to effect any such amendments requested by the General
Partner shall not be unreasonably withheld or delayed.

Section 4.6            No Interest; No Return.
No Partner shall be entitled to interest on its Capital Contribution or on such
Partner’s Capital Account. 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.

Section 4.7            Conversion or
Redemption of Contingent Conversion Units.

A.            Except as provided in the next sentence,
the holders of Contingent Conversion Units shall not have any voting rights. So
long as any Contingent Conversion Units are outstanding, the Partnership shall
not, without the affirmative vote of the holders of at least two-thirds of the
Contingent Conversion Units outstanding at the time, given in person or by
proxy, either in writing or at a meeting, amend, alter or repeal the provisions
of this Agreement, whether by merger, consolidation or otherwise (an “Event”),
so as to materially and adversely affect any right, preference, privilege or
voting power of the Contingent Conversion Units; provided, however, that with respect to the
occurrence of any Event, so long as the Contingent Conversion Units remain
outstanding with the terms thereof materially unchanged, the occurrence of any
such Event shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers of the Contingent Conversion Units.

B.            The holders of Contingent Conversion Units
shall not be entitled to receive any distributions in respect of their
Contingent Conversion Units.

C.            Within 30 days after the end of each
quarter beginning with the quarter ending March 30, 2006 and ending with the
quarter ending December 31, 2008, the Parent shall calculate the Lease-Up NOI
over the 12-month period ending in such quarter (each such 12-month period
being referred to as a “Measurement Period”) and the applicable Conversion
Percentage. For purposes hereof, (i) the “Lease-Up NOI” for any
Measurement Period shall equal the total revenues less the property related
expenses achieved from the wholly owned early stage lease-up properties listed
on Exhibit D hereto, subject to adjustment to take into account sales of
any of the lease-up properties that occur on or prior to December 31, 2008, and
(ii) the “Conversion Percentage” shall be an amount not less than zero
nor more than 100% equal to (A) a fraction, the numerator of which shall be an
amount not less than zero equal to the Lease-Up NOI achieved during the
Measurement Period less $5,100,000 and the denominator of which is equal to
$4,600,000 less (B) the sum of all Conversion Percentages determined for all
prior Measurement Periods. By way of example, if the Lease-Up NOI is $6,000,000
for the first Measurement Period and $7,000,000 

 19
 

for the second Measurement Period, the Conversion Percentage shall
equal approximately 20% for the first Measurement Period ($6,000,000 minus $5,100,000
with the remainder divided by $4,600,000) and shall equal approximately 21% for
the second Measurement Period ($7,000,000 minus $5,100,000 with the remainder
divided by $4,600,000 and 20% subtracted from the result 41%.). All
calculations described above shall be performed by the Parent and shall be
verified by the Parent’s independent accountants and reviewed and approved by a
majority of the Parent’s independent directors whose decision shall be final
and binding absent manifest error or fraud.

Within five days after the Lease-Up NOI and the
Conversion Percentage have been determined for any Measurement Period in which
the Conversion Percentage is greater than zero, the General Partner shall send
to each holder of record of Contingent Conversion Units to the address shown on
the record books of the Partnership a notice (each a “Mandatory Conversion
Notice”) setting forth the calculation of Lease-Up NOI, the Conversion
Percentage in respect of such Measurement Period and the date (the “Conversion
Date”) that Contingent Conversion Units will be converted into OP Units
(which date shall be the date of the Mandatory Conversion Notice). Effective as
of the Conversion Date, the number of Contingent Conversion Units held by such
holder multiplied by the Conversion Percentage shall convert into OP Units.
Each converted Contingent Conversion Unit shall be converted into OP Units at
the conversion rate of one OP Unit for each converted Contingent Conversion
Unit, subject to adjustment as determined in good faith by the General Partner
to prevent dilution or enlargement of the conversion rights of the holders of
the Contingent Conversion Unit in the event that the Partnership (A) makes a
distribution on its OP Units in OP Units, (B) subdivides its outstanding OP
Units into a greater number of units or (C) combines its outstanding OP Units
into a smaller number of OP Units. Any such adjustment made pursuant to the
preceding sentence will become effective immediately after the record date in
the case of a distribution, and will become effective immediately after the
effective date in the case of a subdivision or combination. If such
distribution is declared but is not paid or made, the conversion rate then in
effect will be appropriately readjusted; however, a readjustment will not
affect any conversion which takes place before the readjustment. Whenever the
conversion rate for the Contingent Conversion Units is adjusted, the General
Partner will promptly send each holder of record of Contingent Conversion Units
to the address shown on the record books of the Partnership a notice of the
adjustment setting forth the adjusted conversion rate and the date on which the
adjustment becomes effective and containing a brief description of the events
which caused the adjustment.

For purposes of this calculation, in the event that
any property on Exhibit D hereto is sold on or prior to December 31,
2008, in lieu of the actual net operating income derived from such property for
the 12-month period ended on the measurement date immediately preceding such
sale and in each subsequent 12-month Measurement Period, the Lease-Up NOI from
such property for each period shall be equal to the sale price for such
property multiplied by 8% and additional Contingent Conversion Units shall be immediately
converted into OP Units to give effect to such recalculation to give effect to
such provision. The sale of any property set forth on Exhibit D hereto
while any Contingent Conversion Units remain outstanding shall be approved by a
majority of the Parent’s independent directors.

D.            If there is a reclassification or change of
outstanding OP Units (other than as a result of a subdivision or combination),
or a merger or consolidation of the Partnership with any other entity that
results in a reclassification, change, conversion, exchange or cancellation of
outstanding OP Units, or a sale or transfer of all or substantially all of the
assets of the Partnership, upon any subsequent conversion of Contingent
Conversion Units each holder of Contingent Conversion Units will be entitled to
receive the kind and amount of securities, cash and other property which the
holder would have received if the Contingent Conversion Units had been
converted into OP Units immediately before the first of those events and had
retained all the securities, cash and other assets received as a result of all
those events.

E.             Effective on each Conversion Date, the
General Partner shall amend Exhibit A as appropriate to record the
conversion of Contingent Conversion Units being converted on such Conversion
Date. The Person in whose name OP Units (or other Partnership Units) are to be
issued upon a conversion will be deemed to have become the holder of record of
the OP Units (or other Partnership Units) as of the Conversion Date. All OP
Units (or other Partnership Units) issued upon conversion of Contingent
Conversion Units will upon issuance be duly and validly issued and fully paid
OP Units, not subject to any liens and charges created by the Partnership nor
subject to any preemptive rights. Effective on the Conversion Date, the
converted Contingent Conversion Units will no longer be deemed to be
outstanding and all rights of the holder with respect to those Contingent
Conversion Units will immediately terminate, except the right to receive the OP
Units, cash or other assets to be issued as a result of the conversion.

 20
 

F.             Upon any such conversion, no fractional
interests in OP Units shall be issued and instead the number of OP Units shall
be rounded upward to the next whole number.

G.            All remaining outstanding Contingent
Conversion Units not converted in respect of the Measurement Period ended on
December 31, 2008, will be cancelled.

H.            From and after the initial issuance of
Contingent Conversion Units, no additional Contingent Conversion Units shall be
issued or sold by the Partnership, except on a pro
rata basis to the holders of record of the Contingent Conversion
Units immediately prior to such issuance or sale.

I.              The Contingent Conversion Units may only
be transferred by a holder of Contingent Conversion Units in connection with a
concurrent transfer of OP Units to the same transferee.

Section 4.8            Other Contribution
Provisions. In the event that any Partner is admitted to the Partnership
and is given a Capital Account in exchange for services rendered to the
Partnership, unless otherwise determined by the General Partner in its sole and
absolute discretion, such transaction shall be treated by the Partnership and
the affected Partner as if the Partnership had compensated such partner in cash
and such Partner had contributed the cash to the capital of the Partnership. In
addition, with the consent of the General Partner, one or more Limited Partners
may enter into contribution agreements with the Partnership which have the
effect of providing a guarantee of certain obligations of the Partnership.

Section 4.9            Not Publicly Traded.
The General Partner, on behalf of the Partnership, shall use its best efforts
not to take any action which would result in the Partnership being a “publicly
traded partnership” under and as such term is defined in Code Section 7704(b).

ARTICLE
V.

DISTRIBUTIONS

Section 5.1            Requirement
and Characterization of Distributions. Subject to the terms of any
Partnership Unit Designation, the General Partner shall cause the Partnership
to distribute at least quarterly all Available Cash generated by the
Partnership during such quarter to the Holders of Partnership Units on such
Partnership Record Date with respect to such quarter: (1) first, to Holders of
Series A Preferred Units, pro rata in proportion to their respective Percentage
Interests on such Partnership Record Date, in an amount equal to the Series A
Preferred Priority Return (as further set forth in Section 16.2(A) of this
Agreement), (2) second, with respect to any Partnership Interests that are
entitled to any preference in distribution (other than Partnership Interests
represented by Series A Preferred Units), in accordance with the rights of such
class(es) of Partnership Interests (and, within such class(es), pro rata in proportion to the respective
Percentage Interests on such Partnership Record Date) and (3) third, with
respect to any Partnership Interests that are not entitled to any preference in
distribution, in accordance with the rights of such class of Partnership
Interests (and, within such class, pro rata
in proportion to the respective Percentage Interests on such Partnership Record
Date). Distributions payable with respect to any Partnership Units that were
not outstanding during the entire quarterly period in respect of which any
distribution is made shall be prorated based on the portion of the period that
such units were outstanding. The General Partner in its sole and absolute
discretion may distribute to the Holders Available Cash on a more frequent
basis and provide for an appropriate Partnership Record Date. Notwithstanding
anything herein to the contrary, the General Partner shall make such reasonable
efforts, as determined by it in its sole and absolute discretion and consistent
with the Parent’s qualification as a REIT, to cause the Partnership to
distribute sufficient amounts to enable the Parent to pay stockholder dividends
that will (a) satisfy the requirements for its qualification as a REIT under
the Code and Regulations (the “REIT Requirements”) and (b) except to the
extent otherwise determined by the Parent, in its sole and absolute discretion,
avoid any federal income or excise tax liability of the Parent. Contingent
Conversion Units shall not be entitled to distributions.

 21

Section 5.2                                   Distributions
In-Kind.  No right is given to any
Partner to demand and receive property other than cash as provided in this
Agreement. The General Partner may determine, in its sole and absolute
discretion, to make a distribution in-kind of Partnership assets to the
Holders, and such assets shall be distributed in such a fashion as to ensure
that the fair market value is distributed and allocated in accordance with Articles
V, VI and X hereof.

Section 5.3                                   Amounts
Withheld. All amounts withheld pursuant to the Code or any provisions of
any state or local tax law and Section 10.4 hereof with respect to any
allocation, payment or distribution to any Holder shall be treated as amounts
paid or distributed to such Holder pursuant to Section 5.1 hereof for
all purposes under this Agreement.

Section 5.4                                   Distributions
Upon Liquidation. Notwithstanding the other provisions of this Article V,
net proceeds from a Terminating Capital Transaction, and any other cash
received or reductions in reserves made after commencement of the liquidation
of the Partnership, shall be distributed to the Holders in accordance with Section
13.2 hereof.

Section 5.5                                   Distributions
to Reflect Issuance of Additional Partnership Units. Notwithstanding Section
7.3.B hereof, in the event that the Partnership issues additional
Partnership Units pursuant to the provisions of Article IV hereof,
subject to Section 7.3.D, the General Partner is hereby authorized to
make such revisions to this Article V as it determines are necessary or
desirable to reflect the issuance of such additional Partnership Units,
including, without limitation, making preferential distributions to certain
classes of Partnership Units.

Section 5.6                                   Restricted
Distributions. Notwithstanding any provision to the contrary contained in
this Agreement, neither the Partnership nor the General Partner, on behalf of
the Partnership, shall make a distribution to any Holder on account of its
Partnership Interest or interest in Partnership Units if such distribution
would violate Section 17-607 of the Act or other applicable law.

ARTICLE
VI.

ALLOCATIONS

Section 6.1                                   Timing
and Amount of Allocations of Net Income and Net Loss. Net Income and Net
Loss of the Partnership shall be determined and allocated with respect to each
Partnership Year of the Partnership as of the end of each such year. Except as
otherwise provided in this Article VI, and subject to Section 11.6.C
hereof, an allocation to a Holder of a share of Net Income or Net Loss shall be
treated as an allocation of the same share of each item of income, gain, loss
or deduction that is taken into account in computing Net Income or Net Loss.

Section 6.2                                   General
Allocations.

A.                                   Allocations of
Net Income and Net Loss.

(a)                                  Net
Income. Except as otherwise provided herein, Net Income for any Partnership
Year or other applicable period shall be allocated in the following order and
priority:

(i)                                     First,
to the General Partner until the cumulative Net Income allocated to the General
Partner pursuant to this subparagraph (a)(i) equals the cumulative Net Loss
allocated to the General Partner pursuant to subparagraph (b)(vi) below;

(ii)                                  Second,
to each Obligated Partner until the cumulative Net Income allocated to such
Obligated Partner pursuant to this subparagraph (a)(ii) equals the cumulative
Net Loss allocated to such Obligated Partner under subparagraph (b)(v) below
(and, among the Obligated Partners, pro rata
in proportion to their respective percentages of the cumulative Net Loss
allocated to all Obligated Partners pursuant to subparagraph (b)(v) below);

(iii)                               Third,
to Holders of Series A Preferred Units until the cumulative Net Income
allocated under this subparagraph (a)(iii) equals the cumulative Net Loss
allocated to such Holders under subparagraph (b)(iv) below;

 22
 

(iv)                              Fourth,
to Holders of Series A Preferred Units until each such Partnership Unit has
been allocated, on a cumulative basis pursuant to this subparagraph (a)(iv),
Net Income equal to the Series A Preferred Priority Return;

(v)                                 Fifth,
to Holders of any Partnership Units that are entitled to any preference in
distribution (other than Series A Preferred Units) until the cumulative Net
Income allocated under this subparagraph (a)(v) equals the cumulative Net Loss
allocated to such Holders under subparagraph (b)(iii);

(vi)                              Sixth,
to Holders of any Partnership Units that are entitled to any preference in
distribution (other than Series A Preferred Units) until each such Partnership
Unit has been allocated, on a cumulative basis pursuant to this subparagraph
(a)(vi), Net Income equal to the amount of distributions which are attributable
to such Partnership Units; and

(vii)                           Thereafter,
with respect to Partnership Units that are not entitled to any preference in
distribution or with respect to which distributions are not limited to any
preference in distribution, pro rata
to each such class in accordance with the terms of such class (and, within such
class, pro rata in proportion to
the respective Percentage Interests as of the last day of the period for which
such allocation is being made).

(b)                                 Net
Loss. Except as otherwise provided herein, Net Loss for any Partnership
Year or other applicable period shall be allocated in the following order and
priority:

(i)                                     First,
to each Holder of Partnership Units in proportion to and to the extent of the
amount by which the cumulative Net Income allocated to such Partner pursuant to
subparagraph (a)(vii) above exceeds, on a cumulative basis, the sum of (a)
distributions with respect to such Partnership Units pursuant to Section 5.1
and (b) Net Loss allocated to such Partner pursuant to this subparagraph
(b)(i);

(ii)                                  Second,
with respect to classes of Partnership Units that are not entitled to any
preference in distribution or with respect to which distributions are not
limited to any preference in distribution, pro
rata to each such class in accordance with the terms of such class
(and within such class, pro rata
in proportion to the respective Percentage Interests as of the last day of the
period for which such allocation is being made); provided that Net Loss
shall not be allocated to any Partner pursuant to this subparagraph (b)(ii) to
the extent that such allocation would cause such Partner to have an Adjusted
Capital Account Deficit or increase any existing Adjusted Capital Account
Deficit (determined in each case (1) by not including in the Partners’ Adjusted
Capital Accounts any amount that a Partner who also holds classes of
Partnership Units that are entitled to any preferences in distribution upon
liquidation, by subtracting from such Partners’ Adjusted Capital Account the
amount of such preferred distribution to be made upon liquidation and (2) by
not including in the Partners’ Adjusted Capital Accounts any amount that a
Partner is obligated to contribute to the Partnership with respect to any
deficit in its Capital Account pursuant to Section 13.2.C) at the end of
such Partnership Year or other applicable period;

(iii)                               Third,
with respect to classes of Partnership Units that are entitled to any
preference in distribution upon liquidation (other than Series A Preferred
Units), in reverse order of the priorities of each such class (and within each
such class, pro rata in
proportion to their respective Percentage Interests as of the last day of the
period for which such allocation is being made); provided that Net Loss
shall not be allocated to any Partner pursuant to this subparagraph (b)(iii) to
the extent that such allocation would cause such Partner to have an Adjusted
Capital Account Deficit (or increase any existing Adjusted Capital Account
Deficit) (determined in each case by not including in the Partners’ Adjusted
Capital Accounts any amount that a Partner is obligated to contribute to the
Partnership with respect to any deficit in its Capital Account pursuant to Section
13.2.C) at the end of such Partnership Year or other applicable period;

(iv)                              Fourth,
to Holders of Series A Preferred Units; provided that Net Loss shall not be
allocated to any Partner pursuant to this subparagraph (b)(iv) to the extent
that such allocation would cause such Partner to have an Adjusted Capital
Account Deficit (or increase any existing Adjusted Capital Account Deficit)
(determined in each case by not including in the Partners’ Adjusted Capital
Accounts any amount that a Partner is obligated to contribute to the
Partnership with respect to any deficit in its Capital Account pursuant to
Section 13.2.C) at the end of such Partnership Year or other applicable period;

 23
 

(v)                                 Fifth,
to and among the Obligated Partners, in proportion to their respective
Protected Amounts, until such time as the Obligated Partners as a group have
been allocated cumulative Net Loss pursuant to this subparagraph (b)(v) equal
to the aggregate Protected Amounts of all Obligated Partners; and

(vi)                              Thereafter,
to the General Partner.

B.                                     Allocations to
Reflect Issuance of Additional Partnership Units. Notwithstanding Section
7.3.B hereof, in the event that the Partnership issues additional
Partnership Units pursuant to the provisions of Article IV hereof, the
General Partner is hereby authorized to make such revisions to this Section
6.2 as it determines are necessary or desirable to reflect the terms of the
issuance of such additional Partnership Units.

C.                                     Allocations in
Connection with a Liquidating Event. 
Except as otherwise provided in Section 6.3, the allocations of Net
Income and Net Loss set forth in the foregoing provisions of this Section 6.2
or, if necessary, allocations of individual items of income, gain, loss and
deduction which comprise such Net Income or Net Loss, shall be adjusted to the
extent necessary and to the extent possible, so as to result in the Capital
Account balance of each Partner being such that distributions to the Partners
pursuant to Article XIII hereof upon the occurrence of a Liquidating
Event shall be made first to the Holders of Series A Preferred Units (and
proportionately among such Holders) in an amount equal to the Series A
Preferred Redemption Amount for each Series A Preferred Unit, and thereafter to
the Holders of other Partnership Interests. 
If, notwithstanding such allocations, (i) the amount distributable to
any Holder of Series A Preferred Units pursuant to Article XIII hereof
would be less than the Series A Preferred Redemption Amount with respect to
such Holder’s Series A Preferred Units, and (ii) one or more other Holders
would receive a distribution pursuant to Article XIII hereof (or a
distribution in excess of the Series A Preferred Redemption Amount with respect
to any Holder of Series A Preferred Units), then the amounts otherwise payable
to such other Holders shall instead be paid (as a guaranteed payment pursuant
to Section 707(c) of the Code) to Holders of Series A Preferred Units to the
extent of the shortfall in their distributions under (i) above.  If less than all of the distributions to such
other Holders are reallocated to Holders of Series A Preferred Units as
described above, the General Partner shall have the discretion to allocate the
reduction in distributions among such other Holders in a manner that is
consistent with their economic rights under this Agreement.  In addition, the deduction created by any
such guaranteed payment to the Holders of Series A Preferred Units shall be
allocated among such other Holders as reasonably determined by the General
Partner.

Section 6.3                                   Additional
Allocation Provisions. Notwithstanding the foregoing provisions of this Article
VI:

A.                                   Tax Treatment of
Conversion of Contingent Conversion Units. Upon conversion of a Contingent
Conversion Unit into an OP Unit, the Company will specially allocate to the
converted Partner any Net Income attributable to an adjustment of Gross Asset
Values under subparagraph (b)(v) of the definition of “Gross Asset Value”
until the portion of such Partner’s Capital Account attributable to each OP
Unit received upon conversion equals the Capital Account attributable to an OP
Unit at the time of conversion. To the extent such allocation is insufficient
to bring the portion of the Capital Account attributable to each OP Unit
received upon conversion by the converting Partner up to the Capital Account
attributable to an OP Unit at the time of conversion, additional items of gross
income for the Partnership Year (and future Partnership Years, if necessary)
will be allocated to the converted Partner as quickly as possible until the
portion of such Partner’s Capital Account attributable to each OP Unit received
upon conversion equals the Capital Account attributable to an OP Unit at the
time of conversion. Notwithstanding the foregoing, the General Partner is
hereby authorized to make such revisions to this Section 6.3.A as it
determines are necessary to cause the Parent to comply with the REIT
Requirements and to prevent the Parent from being subject to any additional
taxes under Code Section 857 or Code Section 4981.

B.                                     Regulatory Allocations.

(i)                                     Minimum Gain
Chargeback. Except as otherwise provided in Regulations Section 1.704-2(f),
notwithstanding the provisions of Section 6.2 hereof, or any other
provision of this Article VI, if there is a net decrease in Partnership
Minimum Gain during any Partnership Year, each Holder shall be specially
allocated items of Partnership income and gain for such year (and, if
necessary, subsequent years) in an amount equal to such Holder’s share of the
net decrease in Partnership Minimum Gain, as determined under Regulations
Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made
in proportion to the respective amounts required to be allocated to each Holder
pursuant thereto. The items to be allocated shall be determined in accordance
with

 24
 

Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section
6.3.B(i) is intended to qualify as a “minimum gain chargeback” within the
meaning of Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith.

(ii)                                  Partner Minimum
Gain Chargeback. Except as otherwise provided in Regulations Section
1.704-2(i)(4) or in Section 6.3.B(i) hereof, if there is a net decrease
in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any
Partnership Year, each Holder who has a share of the Partner Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(5), shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent years)
in an amount equal to such Holder’s share of the net decrease in Partner
Minimum Gain attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts
required to be allocated to each General Partner, Limited Partner and other
Holder pursuant thereto. The items to be so allocated shall be determined in
accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section
6.3.B(ii) is intended to qualify as a “chargeback of partner nonrecourse
debt minimum gain” within the meaning of Regulations Section 1.704-2(i) and
shall be interpreted consistently therewith.

(iii)                               Nonrecourse
Deductions and Partner Nonrecourse Deductions. Any Nonrecourse Deductions
for any Partnership Year shall be specially allocated to the Holders of
Partnership Units in accordance with their Partnership Units. Any Partner
Nonrecourse Deductions for any Partnership Year shall be specially allocated to
the Holder(s) who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable,
in accordance with Regulations Section 1.704-2(i).

(iv)                              Qualified Income
Offset. If any Holder unexpectedly receives an adjustment, allocation or
distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or
(6), items of Partnership income and gain shall be allocated, in accordance
with Regulations Section 1.704-1(b)(2)(ii)(d), to such Holder in an amount and
manner sufficient to eliminate, to the extent required by such Regulations, the
Adjusted Capital Account Deficit of such Holder as quickly as possible. It is
intended that this Section 6.3.B(iv) qualify and be construed as a “qualified
income offset” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(d)
and shall be interpreted consistently therewith.

(v)                                 Gross Income
Allocation. In the event that any Holder has an Adjusted Capital Account
Deficit at the end of any Partnership Year, each such Holder shall be specially
allocated items of Partnership income and gain in the amount of such excess to
eliminate such deficit as quickly as possible.

(vi)                              Section 754 Adjustment.
To the extent that an adjustment to the adjusted tax basis of any Partnership
asset pursuant to Code Section 734(b) or Code Section 743(b) is required,
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section
1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Holder in complete liquidation of
its interest in the Partnership, 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 to the Holders in accordance with
their Partnership Units in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(2)
applies, or to the Holders to whom such distribution was made in the event that
Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

(vii)                           Curative Allocations.
The allocations set forth in Sections 6.3.B(i), (ii), (iii),
(iv), (v), and (vi) hereof (the “Regulatory Allocations”)
are intended to comply with certain regulatory requirements, including the
requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding
the provisions of Section 6.1 hereof, the Regulatory Allocations shall
be taken into account in allocating other items of income, gain, loss and
deduction among the Holders of Partnership Units so that to the extent possible
without violating the requirements giving rise to the Regulatory Allocations,
the net amount of such allocations of other items and the Regulatory
Allocations to each Holder of a Partnership Unit shall be equal to the net
amount that would have been allocated to each such Holder if the Regulatory
Allocations had not occurred.

C.                                     Allocation of
Excess Nonrecourse Liabilities. The Partnership shall allocate “nonrecourse
liabilities” (within the meaning of Regulations Section 1.752-1(a)(2)) of the
Partnership that are secured by multiple

 25
 

Properties under any reasonable method chosen by the General Partner in
accordance with Regulations Section 1.752-3(a)(3)(b). The Partnership shall
allocate “excess nonrecourse liabilities” of the Partnership under any method
approved under Regulations Section 1.752-3(a)(3) as chosen by the General
Partner.

Section 6.4                                   Tax
Allocations.

A.                                   In General.
Except as otherwise provided in this Section 6.4, for income tax
purposes under the Code and the Regulations each Partnership item of income,
gain, loss and deduction  (collectively, “Tax
Items”) shall be allocated among the Holders of Partnership Units in the
same manner as its correlative item of “book” income, gain, loss or deduction
is allocated pursuant to Sections 6.2 and 6.3 hereof.

B.                                     Allocations
Respecting Section 704(c) Revaluations. Notwithstanding Section 6.4.A
hereof, Tax Items with respect to Property that is contributed to the
Partnership with a Gross Asset Value that varies from its basis in the hands of
the contributing Partner immediately preceding the date of contribution shall
be allocated among the Holders of Partnership Units for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take
into account such variation. The Partnership shall account for such variation
under any method approved under Code Section 704(c) and the applicable
Regulations as chosen by the General Partner, including, without limitation,
the “remedial allocation method” as described in Regulations Section
1.704-3(d); provided, however, that the “traditional method”
shall be used for any properties held directly or indirectly by Extra Space
Storage, LLC and contributed to the Partnership simultaneously with the IPO. In
the event that the Gross Asset Value of any partnership asset is adjusted
pursuant to subsection (b) of the definition of “Gross Asset Value” (provided
in Article I hereof), subsequent allocations of Tax Items with respect
to such asset shall take account of the variation, if any, between the adjusted
basis of such asset and its Gross Asset Value in the same manner as under Code
Section 704(c) and the applicable Regulations.

ARTICLE
VII.

MANAGEMENT AND OPERATIONS OF BUSINESS

Section 7.1                                   Management.

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

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

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

 26
 

(iii)                               the
acquisition, sale, lease, transfer, exchange or other disposition of any, all
or substantially all of the assets of the Partnership (including, but not
limited to, the exercise or grant of any conversion, option, privilege or
subscription right or any other right available in connection with any assets
at any time held by the Partnership) or the merger, consolidation,
reorganization or other combination of the Partnership with or into another
entity;

(iv)                              the
mortgage, pledge, encumbrance or hypothecation of any assets of the Partnership,
the use of the assets of the Partnership (including, without limitation, cash
on hand) for any purpose consistent with the terms of this Agreement and on any
terms that it sees fit, including, without limitation, the financing of the
operations and activities of the General Partner, the Partnership or any of the
Partnership’s Subsidiaries, the lending of funds to other Persons (including,
without limitation, the Partnership’s Subsidiaries) and the repayment of
obligations of the Partnership, its Subsidiaries and any other Person in which
the Partnership has an equity investment, and the making of capital
contributions to and equity investments in the Partnership’s Subsidiaries;

(v)                                 the
management, operation, leasing, landscaping, repair, alteration, demolition,
replacement or improvement of any Property, including, without limitation, any
Contributed Property, or other asset of the Partnership or any Subsidiary,
whether pursuant to a Services Agreement or otherwise;

(vi)                              the
negotiation, execution and performance of any contracts, leases, 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;

(vii)                           the
distribution of Partnership cash or other Partnership assets in accordance with
this Agreement, the holding, management, investment and reinvestment of cash
and other assets of the Partnership and the collection and receipt of revenues,
rents and income of the Partnership;

(viii)                        the
maintenance of such insurance for the benefit of the Partnership and the
Partners as it deems necessary or appropriate, including, without limitation,
(i) casualty, liability and other insurance on the Properties and (ii)
liability insurance for the Indemnitees hereunder;

(ix)                                the
formation of, or acquisition of an interest in, and the contribution of
property to, any further limited or general partnerships, limited liability
companies, joint ventures or other relationships that it deems desirable
(including, without limitation, the acquisition of interests in, and the
contributions of property to, any Subsidiary and any other Person in which it
has an equity investment from time to time); provided, however,
that, as long as the Parent has determined to continue to qualify as a REIT,
the General Partner may not engage in any such formation, acquisition or
contribution that would cause the Parent to fail to qualify as a REIT within
the meaning of Code Section 856(a);

(x)                                   the
control of any matters affecting the rights and obligations of the Partnership,
including the settlement, compromise, submission to arbitration or any other
form of dispute resolution, or abandonment, of any claim, cause of action,
liability, debt or damages, due or owing to or from the Partnership, the
commencement or defense of suits, legal proceedings, administrative
proceedings, arbitrations or other forms of dispute resolution, and the
representation of the Partnership in all suits or legal proceedings,
administrative proceedings, arbitrations or other forms of dispute resolution,
the incurring of legal expense, and the indemnification of any Person against
liabilities and contingencies to the extent permitted by law;

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

(xii)                             except
as otherwise specifically set forth in this Agreement, the determination of the
fair market value of any Partnership property distributed in-kind using such
reasonable method of valuation as it may adopt; provided that such
methods are otherwise consistent with the requirements of this Agreement;

 27
 

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

(xiv)                         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;

(xv)                            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;

(xvi)                         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;

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

(xviii)                   the issuance of additional
Partnership Units, as appropriate and in the General Partner’s sole and
absolute discretion, in connection with Capital Contributions by Additional
Limited Partners and additional Capital Contributions by Partners pursuant to Article
IV hereof;

(xix)                           the selection and dismissal
of Company Employees (including, without limitation, employees having titles or
offices such as president, vice president, secretary and treasurer), and
agents, outside attorneys, accountants, consultants and contractors of the
Partnership or the General Partner, the determination of their compensation and
other terms of employment or hiring and the delegation to any such Company
Employee the authority to conduct the business of the Partnership in accordance
with the terms of this Agreement;

(xx)                              the distribution of cash
to acquire Partnership Units held by a Limited Partner in connection with a
Limited Partner’s exercise of its Redemption Right under Section 8.6
hereof;

(xxi)                           the amendment and
restatement of Exhibit A hereto to reflect accurately at all times the
Capital Contributions and Percentage Interests of the Partners as the same are
adjusted from time to time to the extent necessary to reflect redemptions,
conversion of Contingent Conversion Units, 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 to this Agreement, as long as the matter or event being reflected
in Exhibit A hereto otherwise is authorized by this Agreement;

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

(xxiii)                     an election to dissolve the
Partnership pursuant to Section 13.1.D hereof.

B.                                     Each of the
Limited Partners agrees that, except as provided in Section 7.3 hereof,
the General Partner is authorized to execute, deliver and perform the
above-mentioned agreements and transactions on behalf of the Partnership
without any further act, approval or vote of the Partners, notwithstanding any
other provision of this Agreement, the Act or any applicable law, rule or
regulation. 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.

 28
 

C.                                     At all times from
and after the date hereof, the General Partner may cause the Partnership to
establish and maintain working capital and other reserves in such amounts as
the General Partner, in its sole and absolute discretion, deems appropriate and
reasonable from time to time.

D.                                    In exercising its
authority under this Agreement, the General Partner may, but shall be under no
obligation to, take into account the tax consequences to any Partner (including
the General Partner) of any action taken (or not taken) by it. The General
Partner and the Partnership shall not have liability to a Limited Partner under
any circumstances as a result of an income tax liability incurred by such
Limited Partner as a result of an action (or inaction) by the General Partner
pursuant to its authority under this Agreement provided that the General
Partner has acted in good faith and pursuant to its authority under this
Agreement.

Section 7.2                                   Certificate
of Limited Partnership. 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
the things to maintain the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability) under the
laws of the State of Delaware and each other state, the District of Columbia or
any other jurisdiction, in which the Partnership may elect to do business or
own property. Except as otherwise required under the Act, 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. 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 to the extent provided by applicable law) in the State of Delaware
and any other state, or the District of Columbia or other jurisdiction, in
which the Partnership may elect to do business or own property.

Section 7.3                                   Restrictions
on General Partner’s Authority.

A.                                   The General Partner
may not take any action in contravention of an express prohibition or
limitation of this Agreement without the written consent of a Majority in
Interest of the Outside Limited Partners and may not (1) perform any act that
would subject a Limited Partner to liability as a general partner in any
jurisdiction or any other liability except as provided herein or under the Act;
or (2) enter into any contract, mortgage, loan or other agreement that
prohibits or restricts, or has the effect of prohibiting or restricting, the
ability of a Limited Partner to exercise its rights to a Redemption in full, except
in each case with the written consent of such Limited Partner. The General
Partner may not take any action in contravention of this Agreement, including,
without limitation:

B.                                     The General
Partner shall not, without the written consent of a Majority in Interest of the
Outside Limited Partners, except as provided in Sections 4.3.A, 5.5,
6.2.B and 7.3.C hereof, amend, modify or terminate this
Agreement.

C.                                     Notwithstanding Sections
7.3.B and 14.2, the General Partner shall have the exclusive power,
without the prior consent of the Limited Partners, to amend this Agreement as
may be required to facilitate or implement any of the following purposes:

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

(ii)                                  to reflect the
admission, substitution or withdrawal of Partners or the termination of the
Partnership in accordance with this Agreement, and to amend Exhibit A in
connection with such admission, substitution or withdrawal;

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

 29
 

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

(v)                                 (a) to reflect such
changes as are reasonably necessary for the Parent to maintain or restore its
status as a REIT or to satisfy the REIT Requirements; or (b) to reflect the
Transfer of all or any part of a Partnership Interest among the General
Partner, the Parent Limited Partner, the Parent and any Qualified REIT
Subsidiary;

(vi)                              to modify the manner in
which Capital Accounts are computed (but only to the extent set forth in the
definition of “Capital Account” or contemplated by the Code or the
Regulations); and

(vii)                           to issue additional
Partnership Interests in accordance with Section 4.3.

The General Partner will provide notice to the Limited
Partners whenever any action under this Section 7.3.C is taken.

D.                                    Notwithstanding Sections
7.3.B and 7.3.C hereof, this Agreement shall not be amended, and no
action may be taken by the General Partner, without the consent of each Partner
adversely affected thereby, if such amendment or action would (i) convert a
Limited Partner Interest in the Partnership into a General Partner Interest
(except as a result of the General Partner acquiring such Partnership
Interest), (ii) modify the limited liability of a Limited Partner or (iii)
amend this Section 7.3.D. Further, no amendment may alter the
restrictions on the General Partner’s authority set forth elsewhere in this Section
7.3 or in Section 11.2.B without the consent specified therein. Any
such amendment or action consented to by any Partner shall be effective as to
that Partner, notwithstanding the absence of such consent by any other Partner.

Section 7.4                                   Reimbursement
of the General Partner and Parent.

A.                                   Except as provided
in this Section 7.4 and elsewhere in this Agreement (including the
provisions of Articles V and VI regarding distributions, payments
and allocations to which it may be entitled), the General Partner shall not be
compensated for its services as general partner of the Partnership.

B.                                     The Partnership
shall be responsible for and shall pay all expenses relating to the Partnership’s,
the General Partner’s and the Parent’s organization, the ownership of their
assets and their operations. The General Partner and/or the Parent are hereby
authorized to pay compensation for accounting, administrative, legal,
technical, management and other services rendered to the Partnership. Except to
the extent provided in this Agreement, the General Partner, the Parent and
their Affiliates shall be reimbursed on a monthly basis, or such other basis as
the General Partner may determine in its sole and absolute discretion, for all
expenses that the General Partner, the Parent and their Affiliates incur relating
to the ownership and operation of, or for the benefit of, the Partnership
(including, without limitation, administrative expenses); provided, that
the amount of any such reimbursement shall be reduced by any interest earned by
the General Partner with respect to bank accounts or other instruments or
accounts held by it on behalf of the Partnership. The Partners acknowledge that
all such expenses of the General Partner and/or the Parent are deemed to be for
the benefit of the Partnership. Such reimbursement shall be in addition to any
reimbursement made as a result of indemnification pursuant to Section 7.7
hereof. In the event that certain expenses are incurred for the benefit of the
Partnership and other entities (including the General Partner and/or the
Parent), such expenses will be allocated to the Partnership and such other
entities in such a manner as the General Partner in its sole and absolute
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
and/or the Parent.

C.                                     If the Parent
shall elect to purchase from its stockholders REIT Shares for the purpose of
delivering such REIT Shares to satisfy an obligation under any dividend
reinvestment program adopted by the Parent, any employee stock purchase plan
adopted by the Parent or any similar obligation or arrangement undertaken by
the Parent in the future or for the purpose of retiring such REIT Shares, the
purchase price paid by the Parent for such REIT Shares and any other expenses
incurred by the Parent in connection with such purchase shall be considered
expenses of the Partnership and shall be advanced to the Parent or reimbursed
to the Parent, subject to

 30
 

the condition that: (1) if such REIT Shares subsequently are sold by
the Parent, the Parent shall pay or cause to be paid to the Partnership any
proceeds received by the Parent for such REIT Shares (which sales proceeds
shall include the amount of dividends reinvested under any dividend
reinvestment or similar program; provided, that a transfer of REIT Shares for
Partnership Units pursuant to Section 8.6 would not be considered a sale
for such purposes); and (2) if such REIT Shares are not retransferred by the
Parent within 30 days after the purchase thereof, or the Parent otherwise
determines not to retransfer such REIT Shares, the Parent shall cause the
Partnership to redeem a number of Partnership Units held by the Parent equal to
the number of such REIT Shares, as adjusted (x) pursuant to Section 7.7
(in the event the General Partner acquires material assets, other than on
behalf of the Partnership) and (y) for stock dividends and distributions, stock
splits and subdivisions, reverse stock splits and combinations, distributions
of rights, warrants or options, and distributions of evidences of indebtedness
or assets relating to assets not received by the General Partner pursuant to a pro rata distribution by the Partnership
(in which case such advancement or reimbursement of expenses shall be treated
as having been made as a distribution in redemption of such number of
Partnership Units held by the General Partner).

D.                                    As set forth in Section
4.3, the General Partner shall be treated as having made a Capital
Contribution in the amount of all expenses that the Parent incurs relating to
the Parent’s offering of REIT Shares, Contingent Conversion Shares, Preferred
Shares, Junior Shares or New Securities.

E.                                      If and to the extent
any reimbursements to the General Partner pursuant to this Section 7.4
constitute gross income of the General Partner (as opposed to the repayment of
advances made by the General Partner on behalf of the Partnership), such
amounts shall constitute guaranteed payments with respect to capital within the
meaning of Code Section 707(c), 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.

Section 7.5                                   Outside
Activities of the General Partner. The General Partner shall not directly
or indirectly enter into or conduct any business, other than in connection with
(a) the ownership, acquisition and disposition of Partnership Interests as General
Partner, (b) the management of the business of the Partnership, (c) if the
General Partner becomes a reporting company with a class (or classes) of
securities registered under the Exchange Act, the operation of the General
Partner as such, (d) financing or refinancing of any type related to the
Partnership or its assets or activities, (e) any of the foregoing activities as
they relate to a Subsidiary of the Partnership, and (f) such activities as are
incidental thereto. Nothing contained herein shall be deemed to prohibit the
General Partner from executing guarantees of Partnership debt for which it
would otherwise be liable in its capacity as General Partner.

Section 7.6                                   Contracts
with Affiliates.

A.                                   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 Persons may borrow funds from
the Partnership, on terms and conditions established in the sole and absolute
discretion of the General Partner. The foregoing authority shall not create any
right or benefit in favor of any Subsidiary or any other Person.

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

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 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
and/or the Parent, in its sole and absolute discretion and without the approval
of the Limited Partners, may propose and adopt on behalf of the Partnership
employee benefit plans funded by the Partnership for the benefit of employees
of the General Partner, the Partnership, Subsidiaries of the Partnership or any
Affiliate of any of them in respect of services performed, directly or
indirectly, for the benefit of the Partnership or any of the Partnership’s
Subsidiaries.

 31
 

E.                                      The General
Partner is expressly authorized to enter into, in the name and on behalf of the
Partnership, any Services Agreement with Affiliates of any of the Partnership
or the General Partner, on such terms as the General Partner, in its sole and
absolute discretion, believes are advisable.

Section 7.7                                   Indemnification.

A.                                   To the fullest
extent permitted by applicable law, the Partnership shall indemnify each
Indemnitee from and against any and all losses, claims, damages, liabilities
(whether joint or several), expenses (including, without limitation, attorney’s
fees and other legal fees and expenses), judgments, fines, settlements and
other amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that relate to
the operations of the Partnership (“Actions”) as set forth in this
Agreement in which such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise; provided, however, that the
Partnership shall not indemnify an Indemnitee (1) for willful misconduct or a
knowing violation of the law, (2) for any transaction for which such Indemnitee
received an improper personal benefit in violation or breach of any provision
of this Agreement, or (3) in the case of any criminal proceeding, the
Indemnitee had reasonable cause to believe that the act or omission was
unlawful. Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership
(including, without limitation, any indebtedness which the Partnership or any
Subsidiary of the Partnership has assumed or taken subject to), and the General
Partner is hereby authorized and empowered, on behalf of the Partnership, to
enter into one or more indemnity agreements consistent with the provisions of
this Section 7.7 in favor of any Indemnitee having or potentially having
liability for any such indebtedness. The termination of any proceeding by
judgment, order or settlement does not create a presumption that the Indemnitee
did not meet the requisite standard of conduct set forth in this Section
7.7.A. The termination of any proceeding by conviction of an Indemnitee or
upon a plea of nolo contendere or
its equivalent by an Indemnitee, or an entry of an order of probation against
an Indemnitee prior to judgment, does not create a presumption that such
Indemnitee acted in a manner contrary to that specified in this Section 7.7.A
with respect to the subject matter of such proceeding. Any indemnification
pursuant to this Section 7.7 shall be made only out of the assets of the
Partnership and any insurance proceeds from the liability policy covering the
General Partner and any Indemnitees, and neither the General Partner nor any
Limited Partner shall have any obligation to contribute to the capital of the
Partnership or otherwise provide funds to enable the Partnership to fund its
obligations under this Section 7.7.

B.                                     To the fullest
extent permitted by law, expenses incurred by an Indemnitee who is a party to a
proceeding or otherwise subject to or the focus of or is involved in any Action
shall be paid or reimbursed by the Partnership as incurred by the Indemnitee in
advance of the final disposition of the Action upon receipt by the Partnership
of (1) a written affirmation by the Indemnitee of the Indemnitee’s good faith
belief that the standard of conduct necessary for indemnification by the
Partnership as authorized in this Section 7.7.B has been met and (2) 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 7.7 shall be in addition to any
other rights to which an Indemnitee or any other Person may be entitled under
any agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity and shall inure to the benefit of the heirs, successors, assigns
and administrators of the Indemnitee unless otherwise provided in a written
agreement with such Indemnitee or in the writing pursuant to which such
Indemnitee is indemnified.

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

E.                                      Any liabilities
which an Indemnitee incurs as a result of acting on behalf of the Partnership,
the General Partner or the Parent (whether as a fiduciary or otherwise) in
connection with the operation, administration or maintenance of an employee
benefit plan or any related trust or funding mechanism (whether such
liabilities are in the form of excise taxes assessed by the IRS, penalties
assessed by the Department of Labor, restitutions to such a plan or trust or
other funding mechanism or to a participant or beneficiary of such plan, trust
or other funding

 32
 

mechanism, or otherwise) shall be treated as liabilities or judgments
or fines under this Section 7.7, unless such liabilities arise as a
result of (1) such Indemnitee’s intentional misconduct or knowing violation of
the law, (2) any transaction in which such Indemnitee received a personal
benefit in violation or breach of any provision of this Agreement or applicable
law, or (3) in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful.

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

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

H.                                    The provisions of
this Section 7.7 are for the benefit of the Indemnitees, their heirs,
successors, assigns and administrators and shall not be deemed to create any
rights for the benefit of any other Persons. Any amendment, modification or
repeal of this Section 7.7 or any provision hereof shall be prospective
only and shall not in any way affect the obligations of the Partnership or the
limitations on the Partnership’s liability to any Indemnitee under this Section
7.7 as in effect immediately prior to such amendment, modification or
repeal with respect to claims arising from or 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 7.7
constitute gross income to the General Partner (as opposed to the repayment of
advances made on behalf of the Partnership) such amounts shall be treated as “guaranteed
payments” within the meaning of Code Section 707(c), shall be treated
consistently therewith by the Partnership and all Partners, and shall not be
treated by distribution for purposes of computing the Partners’ Capital
Accounts.

Section 7.8                                   Liability
of the General Partner.

A.                                   Notwithstanding
anything to the contrary set forth in this Agreement, neither the General
Partner nor any of its trustees or officers shall be liable or accountable in
damages or otherwise to the Partnership, any Partners or any Assignees for
losses sustained, liabilities incurred or benefits not derived as a result of
errors in judgment or mistakes of fact or law or of any act or omission if the
General Partner or such trustee or officer acted in good faith.

B.                                     The Limited
Partners expressly acknowledge that the General Partner is acting for the
benefit of the Partnership, the Limited Partners and the Parent’s stockholders
collectively and that the General Partner is under no obligation to give
priority to the separate interests of the Limited Partners or the Parent’s
stockholders (including, without limitation, the tax consequences to Limited
Partners, Assignees or the Parent’s stockholders) in deciding whether to cause
the Partnership to take (or decline to take) any actions. If there is a
conflict between the interests of the stockholders of the Parent on one hand
and the Limited Partners on the other, the General Partner shall endeavor in
good faith to resolve the conflict in a manner not adverse to either the
stockholders of the Parent or the Limited Partners. The General Partner shall
not be liable under this Agreement to the Partnership or to any Partner for
monetary damages for losses sustained, liabilities incurred, or benefits not
derived by Limited Partners in connection with such decisions; provided,
that the General Partner has acted in good faith.

C.                                     Subject to its
obligations and duties as General Partner set forth in Section 7.1.A
hereof, the General Partner may exercise any of the powers granted to it by
this Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its employees or agents (subject to the supervision
and control of the General Partner). The General Partner shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by it in good faith.

D.                                    To the extent that,
at law or in equity, the General Partner has duties (including fiduciary
duties) and liabilities relating thereto to the Partnership or the Limited
Partners, the General Partner shall not be liable to the Partnership or to any
other Partner for its good faith reliance on the provisions of this Agreement.
The provisions of

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this Agreement, to the extent that they restrict the duties and
liabilities of the General Partner otherwise existing at law or in equity, are
agreed by the Partners to replace such other duties and liabilities of such
General Partner.

E.                                      Notwithstanding
anything herein to the contrary, except for fraud, willful misconduct or gross
negligence, or pursuant to any express indemnities given to the Partnership by
any Partner pursuant to any other written instrument, no Partner shall have any
personal liability whatsoever, to the Partnership or to the other Partner(s),
for the debts or liabilities of the Partnership or the Partnership’s
obligations hereunder, and the full recourse of the other Partner(s) shall be
limited to the interest of that Partner in the Partnership. To the fullest
extent permitted by law, no officer, trustee or shareholder of the General
Partner shall be liable to the Partnership for money damages except for (1)
active and deliberate dishonesty established by a non-appealable final judgment
or (2) actual receipt of an improper benefit or profit in money, property or
services. Without limitation of the foregoing, and except for fraud, willful
misconduct or gross negligence, or pursuant to any such express indemnity, no
property or assets of any Partner, other than its interest in the Partnership,
shall be subject to levy, execution or other enforcement procedures for the
satisfaction of any judgment (or other judicial process) in favor of any other
Partner(s) and arising out of, or in connection with, this Agreement. This
Agreement is executed by the trustees of the General Partner solely as trustees
of the same and not in their own individual capacities.

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

Section 7.9                                   Other
Matters Concerning the General Partner and the Parent.

A.                                   The General Partner
and the Parent 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 and the Parent 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 that the General Partner and the Parent reasonably
believe to be within such Person’s professional or expert competence shall be
conclusively presumed to have been done or omitted in good faith and in
accordance with such opinion.

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

D.                                    Notwithstanding any
other provision of this Agreement or the Act, any action of the General Partner
or the Parent on behalf of the Partnership or any decision of the General
Partner or the Parent 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 (1) to protect the ability of the Parent to continue to
qualify as a REIT, (2) for the Parent otherwise to satisfy the REIT
Requirements, or (3) to avoid the Parent incurring any taxes under Code Section
857 or Code Section 4981, is expressly authorized under this Agreement and is
deemed approved by all of the Limited Partners.

Section 7.10                            Title
to Partnership Assets. Title to Partnership assets, whether real, personal
or mixed and whether tangible or intangible, shall be deemed to be owned by the
Partnership as an entity, and no Partner, individually or collectively with
other Partners or Persons, shall have any ownership interest in such
Partnership assets or any portion thereof. Title to any or all of the
Partnership assets may be held in the name of the Partnership,

 34
 

the General Partner or
one or more nominees, as the General Partner may determine, including
Affiliates of the General Partner. The General Partner hereby declares and
warrants that any Partnership assets for which legal title is held in the name
of the General Partner or any nominee or Affiliate of the General Partner shall
be held by the General Partner for the use and benefit of the Partnership in
accordance with the provisions of this Agreement. All Partnership assets shall
be recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.

Section 7.11                            Reliance
by Third Parties. Notwithstanding anything to the contrary in this
Agreement, any Person dealing with the Partnership shall be entitled to assume
that the General Partner has full power and authority, without the 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 it were the Partnership’s sole party in interest, both legally
and beneficially. Each Limited Partner hereby waives any and all defenses or
other remedies that may be available against such Person to contest, negate or
disaffirm any action of the General Partner in connection with any such
dealing. In 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.  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 in good faith thereon or claiming thereunder that (1) at the time of
the execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (2) 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 (3) such certificate, document
or instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.

ARTICLE
VIII.

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 8.1                                   Limitation
of Liability. The Limited Partners shall have no liability under this
Agreement (other than for breach thereof) except as expressly provided in Section
10.4 or under the Act.

Section 8.2                                   Management
of Business. No Limited Partner or Assignee (other than the General
Partner, any of its Affiliates or any officer, director, member, employee,
partner, agent or trustee of the General Partner, the Partnership or any of
their Affiliates, in their capacity as such) shall take part in the operations,
management or control (within the meaning of the Act) of the Partnership’s
business, transact any business in the Partnership’s name or have the power to
sign documents for or otherwise bind the Partnership. The transaction of any
such business by the General Partner, any of its Affiliates or any officer,
director, member, employee, partner, agent, representative, shareholder or
trustee of the General Partner, the Partnership or any of their Affiliates, in
their capacity as such, shall not affect, impair or eliminate the limitations
on the liability of the Limited Partners or Assignees under this Agreement.

Section 8.3                                   Outside
Activities of Limited Partners. Subject to any agreements entered into
pursuant to Section 7.6.E hereof and any other agreements entered into
by a Limited Partner or its Affiliates with the General Partner, the
Partnership, the Parent or any Affiliate thereof (including, without limitation,
any employment agreement), any Limited Partner (other than the Parent Limited
Partner) and any Assignee, officer, director, employee, agent, trustee,
Affiliate, member or shareholder of any Limited Partner shall be entitled to
and may have business interests and engage in business activities in addition
to those relating to the Partnership, including business interests and
activities that are in direct or indirect competition with the Partnership or
that are enhanced by the activities of the Partnership. Neither the Partnership
nor any Partner shall have any rights by virtue of this Agreement in any
business ventures of any Limited Partner or Assignee. Subject to such
agreements, none of the Limited Partners nor any other Person shall have any
rights by virtue of this Agreement or the partnership relationship established
hereby in any business ventures of any other Person (other than the General
Partner, to the extent expressly provided herein), and such Person shall have
no obligation pursuant to this Agreement, subject to Section 7.6.E
hereof and any other agreements entered into by a Limited Partner or its
Affiliates with the General Partner, the Partnership, the Parent or any
Affiliate thereof, to offer any interest in any such business ventures to the

 35
 

Partnership, any Limited
Partner, the Parent or any such other Person, even if such opportunity is of a
character that, if presented to the Partnership, any Limited Partner, the
Parent or such other Person, could be taken by such Person.

Section 8.4                                   Return
of Capital. Except pursuant to the rights of Redemption set forth in Section
8.6 hereof, no Limited Partner shall be entitled to the withdrawal or
return of its Capital Contribution, except to the extent of distributions made
pursuant to this Agreement or upon termination of the Partnership as provided
herein. Except to the extent provided in Article VI hereof or otherwise
expressly provided in this Agreement, no Limited Partner or Assignee shall have
priority over any other Limited Partner or Assignee either as to the return of
Capital Contributions or as to profits, losses or distributions.

Section 8.5                                   Adjustment
Factor. The Partnership shall notify any Limited Partner that is a
Qualifying Party, on request, of the then current Adjustment Factor or any change
made to the Adjustment Factor.

Section 8.6                                   Redemption
Rights.

A.                                   On or after the date
12 months after the Effective Date, with respect to the OP Units (including any
Contingent Conversion Units that are converted into OP Units) acquired on or
contemporaneously with the Effective Date, each Limited Partner (other than the
Parent Limited Partner) shall have the right (subject to the terms and
conditions set forth herein and in any other such agreement, as applicable) to
require the Partnership to redeem all or a portion of the OP Units held by such
Limited Partner (such OP Units being hereafter referred to as “Tendered
Units”) in exchange for the Cash Amount (a “Redemption”) unless the
terms of such OP Units or a separate agreement entered into between the
Partnership and the holder of such OP Units provide that such OP Units are not
entitled to a right of Redemption. The Tendering Partner shall have no right,
with respect to any OP Units so redeemed, to receive any distributions paid on
or after the Specified Redemption Date. Any Redemption shall be exercised
pursuant to a Notice of Redemption delivered to the General Partner by the
Limited Partner who is exercising the right (the “Tendering Partner”).
The Cash Amount shall be payable to the Tendering Partner on the Specified
Redemption Date.

B.                                     Notwithstanding Section
8.6.A above, if a Limited Partner has delivered to the General Partner a
Notice of Redemption then the Parent may, in its sole and absolute discretion,
(subject to the limitations on ownership and transfer of REIT Shares set forth
in the Charter) elect to assume and satisfy the General Partner’s Redemption
obligation and acquire some or all of the Tendered Units from the Tendering
Partner in exchange for the REIT Shares Amount (as of the Specified Redemption
Date) and, if the Parent so elects, the Tendering Partner shall sell the
Tendered Units to the Parent in exchange for the REIT Shares Amount. In such
event, the Tendering Partner shall have no right to cause the Partnership to
redeem such Tendered Units. The Parent shall promptly give such Tendering
Partner written notice of its election, and the Tendering Partner may elect to
withdraw its redemption request at any time prior to the acceptance of the cash
or REIT Shares Amount by such Tendering Partner. Assuming the Parent exercises
its option to deliver REIT Shares, the Parent shall contribute the Tendered
Units to the General Partner and/or the Parent Limited Partner, as the case may
be.

C.                                     The REIT Shares
Amount, if applicable, shall be delivered as duly authorized, validly issued,
fully paid and nonassessable REIT Shares and, if applicable, free of any
pledge, lien, encumbrance or restriction, other than those provided in the
Charter or the Bylaws of the Parent, the Securities Act, relevant state
securities or blue sky laws and any applicable registration rights agreement
with respect to such REIT Shares entered into by the Tendering Partner.
Notwithstanding any delay in such delivery (but subject to Section 8.6.E),
the Tendering Partner shall be deemed the owner of such REIT Shares for all
purposes, including without limitation, rights to vote or consent, and receive
dividends, as of the Specified Redemption Date. In addition, the REIT Shares
for which the Partnership Units might be exchanged shall also bear a legend
which generally provides the following:

RESTRICTION
ON OWNERSHIP AND TRANSFER

THE SHARES OF CAPITAL STOCK REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE
OWNERSHIP AND TRANSFER FOR THE PURPOSE OF THE COMPANY’S MAINTENANCE OF ITS
STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”). SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND
EXCEPT AS EXPRESSLY PROVIDED IN THE COMPANY’S

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ARTICLES OF AMENDMENT AND RESTATEMENT, (i) NO PERSON
MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF THE COMPANY’S COMMON STOCK IN
EXCESS OF [ • %] (BY VALUE OR BY NUMBER OF SHARES, WHICHEVER IS MORE
RESTRICTIVE) OF THE OUTSTANDING COMMON STOCK OF THE COMPANY OR SHARES OF THE
COMPANY’S CAPITAL STOCK IN EXCESS OF [ • %] (BY VALUE OR BY NUMBER OF SHARES,
WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING CAPITAL STOCK OF THE COMPANY;
(ii) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK
THAT WOULD RESULT IN THE COMPANY BEING “CLOSELY HELD” UNDER SECTION 856(h) OF
THE CODE OR OTHERWISE CAUSE THE COMPANY TO FAIL TO QUALIFY AS A REIT; AND (iii)
NO PERSON MAY TRANSFER SHARES OF COMMON STOCK IF SUCH TRANSFER WOULD RESULT IN
THE COMMON STOCK OF THE COMPANY BEING OWNED BY FEWER THAN 100 PERSONS. ANY
PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY OWNS OR ATTEMPTS TO BENEFICIALLY OR
CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK IN VIOLATION OF THE ABOVE
LIMITATIONS MUST IMMEDIATELY NOTIFY THE COMPANY. IF ANY OF THE RESTRICTIONS ON
TRANSFER OR OWNERSHIP IS VIOLATED, THE SHARES OF CAPITAL STOCK REPRESENTED
HEREBY WILL BE AUTOMATICALLY TRANSFERRED TO THE TRUSTEE OF A TRUST FOR THE
BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES. IN ADDITION, THE COMPANY MAY
REDEEM SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD OF DIRECTORS
IN ITS SOLE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES THAT OWNERSHIP OR A
TRANSFER OR OTHER EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED ABOVE.
FURTHERMORE, UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED TRANSFERS IN
VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO. ALL TERMS
IN THIS LEGEND THAT ARE DEFINED IN THE ARTICLES OF AMENDMENT AND RESTATEMENT OF
THE COMPANY SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THE ARTICLES OF
AMENDMENT AND RESTATEMENT OF THE COMPANY, AS THE SAME MAY BE AMENDED FROM TIME
TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP,
WILL BE FURNISHED TO EACH HOLDER OF SHARES OF CAPITAL STOCK ON REQUEST AND
WITHOUT CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE SECRETARY OF
THE COMPANY AT ITS PRINCIPAL OFFICE.

D.                                    Each Limited
Partner covenants and agrees with the General Partner that all Tendered Units
shall be delivered to the General Partner free and clear of all liens, claims
and encumbrances whatsoever and should any such liens, claims and/or
encumbrances exist or arise with respect to such Tendered Units, the General
Partner shall be under no obligation to acquire the same. Each Limited Partner
further agrees that, in the event any state or local property transfer tax is
payable as a result of the transfer of its Tendered Units to the General
Partner (or its designee), such Limited Partner shall assume and pay such
transfer tax.

E.                                      Notwithstanding
the provisions of Section 8.6.A, 8.6.B, 8.6.C or any other
provision of this Agreement, a Limited Partner (i) shall not be entitled to
effect a Redemption for cash or an exchange for REIT Shares to the extent the
ownership or right to acquire REIT Shares pursuant to such exchange by such
Partner on the Specified Redemption Date could cause such Partner or any other
Person to violate the restrictions on ownership and transfer of REIT Shares set
forth in the Charter of the Parent and (ii) shall have no rights under this
Agreement to acquire REIT Shares which would otherwise be prohibited under the
Charter. To the extent any attempted Redemption or exchange for REIT Shares
would be in violation of this Section 8.6.E, it shall be null and void ab initio and such Limited Partner shall
not acquire any rights or economic interest in the cash otherwise payable upon
such Redemption or the REIT Shares otherwise issuable upon such exchange.

F.                                      Notwithstanding
anything herein to the contrary (but subject to Section 8.6.E), with respect
to any Redemption or exchange for REIT Shares pursuant to this Section 8.6:
(i) all OP Units acquired by the General Partner pursuant thereto shall
automatically, and without further action required, be converted into and
deemed to be General Partner Interests comprised of the same number and class
of OP Units; (ii) without the consent of the General Partner, each Limited
Partner may not effect a Redemption for less than 1,000 OP Units or, if the
Limited Partner holds less than 1,000 OP Units, all of the OP Units held by
such Limited Partner; (iii) without the consent of the General Partner, each
Limited Partner may not effect a Redemption during the period after the
Partnership Record Date with respect to a distribution and before the record
date established by the General Partner for a distribution to its shareholders
of some or all of its portion of such distribution; (iv) the consummation of
any Redemption or exchange for REIT Shares shall be subject to the expiration
or termination of the applicable waiting

 37
 

period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended; and (v) each Tendering Partner shall continue to own all
OP Units subject to any Redemption or exchange for REIT Shares, and be treated
as a Limited Partner with respect to such OP Units for all purposes of this
Agreement, until such OP Units are transferred to the General Partner and paid
for or exchanged on the Specified Redemption Date. Until a Specified Redemption
Date, the Tendering Partner shall have no rights as a shareholder of the
General Partner with respect to such Tendering Partner’s OP Units.

G.                                     In the event that
the Partnership issues additional Partnership Interests to any Additional
Limited Partner pursuant to Section 4.3, the General Partner shall make
such revisions to this Section 8.6 as it determines are necessary to
reflect the issuance of such additional Partnership Interests.

ARTICLE
IX.

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 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, without limitation, all books and records
necessary to provide to the Limited Partners any information, lists and copies
of documents required to be provided pursuant to Section 8.5 or 9.3
hereof. Any records maintained by or on behalf of the Partnership in the
regular course of its business may be kept on, or be in the form for, magnetic
tape, photographs, micrographics or any other information storage device, provided
that the records so maintained are convertible into clearly legible written
form within a reasonable period of time. The books of the Partnership shall be
maintained, for financial and tax reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles.

B.                                     The books of the
Partnership shall be maintained, for financial and tax reporting purposes, on
an accrual basis in accordance with generally accepted accounting principles,
or on such other basis as the General Partner determines to be necessary or
appropriate. To the extent permitted by sound accounting practices and
principles, the Partnership and the General Partner may operate with integrated
or consolidated accounting records, operations and principles.

Section 9.2                                   Partnership
Year. The Partnership Year of the Partnership shall be the calendar year.

Section 9.3                                   Reports.

A.                                   As soon as
practicable, but in no event later than the date on which the Parent mails its
annual report to its stockholders, the General Partner shall cause to be mailed
to the Limited Partner an annual report, as of the close of the most recently
ended Fiscal Year, containing financial statements of the Partnership, or of
the Parent if such statements are prepared solely on a consolidated basis with
the Partnership, for such Partnership Year, presented in accordance with generally
accepted accounting principles, such statements to be audited by a nationally
recognized firm of independent public accountants selected by the Parent.

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

ARTICLE
X.

TAX MATTERS

Section 10.1                            Preparation
of Tax Returns. The General Partner shall arrange for the preparation and
timely filing of all returns with respect to Partnership income, gains,
deductions, losses and other items required of the

 38
 

Partnership for federal
and state income tax purposes and shall use all reasonable effort to furnish,
within 90 days of the close of each taxable year, the tax information
reasonably required by Limited Partners for federal and state income tax
reporting purposes. The Limited Partners shall promptly provide the General
Partner with such information relating to the Contributed Properties, including
tax basis and other relevant information, as may be reasonably requested by the
General Partner from time to time.

Section 10.2                            Tax
Elections. Except as otherwise provided herein, the General Partner shall,
in its sole and absolute discretion, determine whether to make any available
election pursuant to the Code, including, but not limited to, the election
under Code Section 754 and the election to use the “recurring item” method of
accounting provided under Code Section 461(h) with respect to property taxes
imposed on the Partnership’s Properties; provided, however, that,
if the “recurring item” method of accounting is elected with respect to such
property taxes, the Partnership shall pay the applicable property taxes prior
to the date provided in Code Section 461(h) for purposes of determining
economic performance. The General Partner shall have the right to seek to
revoke any such election (including, without limitation, any election under
Code Sections 461(h) and 754) upon the General Partner’s determination in its
sole and absolute discretion that such revocation is in the best interests of
the Partners.

Section 10.3                            Tax
Matters Partner.

A.                                   The General Partner
shall be the “tax matters partner” of the Partnership for federal income tax
purposes. The tax matters partner shall receive no compensation for its
services. All third-party costs and expenses incurred by the tax matters
partner in performing its duties as such (including legal and accounting fees
and expenses) shall be borne by the Partnership in addition to any
reimbursement pursuant to Section 7.4 hereof. 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.

B.                                     The tax matters
partner is authorized, but not required:

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

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

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

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

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

 39
 

(vi)                              to take any other action
on behalf of the Partners 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 7.7 hereof
shall be fully applicable to the tax matters partner in its capacity as such.

C.                                     The tax matters
partner shall receive no compensation for its services. All third party costs
and expenses incurred by the tax matters partner in performing its duties as
such (including legal and accounting fees) shall be borne by the Partnership.
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.

Section 10.4                            Withholding.
Each Limited Partner hereby authorizes the Partnership to withhold from or pay
on behalf of or with respect to such Limited Partner any amount of federal,
state, local or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Code Sections 1441, 1442, 1445 or 1446. Any amount paid
on behalf of or with respect to a Limited Partner shall constitute a loan by
the Partnership to such Limited Partner, which loan shall be repaid by such
Limited Partner within 15 days after notice from the General Partner that such
payment must be made unless (i) the Partnership withholds such payment from a
distribution that would otherwise be made to the Limited Partner or (ii) the
General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the Available Funds of the Partnership that
would, but for such payment, be distributed to the Limited Partner. Each
Limited Partner hereby unconditionally and irrevocably grants to the
Partnership a security interest in such Limited Partner’s Partnership Interest
to secure such Limited Partner’s obligation to pay to the Partnership any
amounts required to be paid pursuant to this Section 10.4. In the event
that a Limited Partner fails to pay any amounts owed to the Partnership
pursuant to this Section 10.4 when due, the General Partner may, in its
sole and absolute discretion, elect to make the payment to the Partnership on
behalf of such defaulting Limited Partner, and in such event shall be deemed to
have loaned such amount to such defaulting Limited Partner and shall succeed to
all rights and remedies of the Partnership as against such defaulting Limited
Partner (including, without limitation, the right to receive distributions).
Any amounts payable by a Limited Partner hereunder shall bear interest at the
base rate on corporate loans at large United States money center commercial
banks, as published from time to time in The Wall Street Journal, plus
four percentage points (but not higher than the maximum lawful rate) from the
date such amount is due (i.e., 15
days after demand) until such amount is paid in full. Each Limited Partner
shall take such actions as the Partnership or the General Partner shall request
in order to perfect or enforce the security interest created hereunder.

Section 10.5                            Organizational
Expenses. The Partnership shall elect to amortize expenses, if any,
incurred by it in organizing the Partnership ratably over a 60-month period as
provided in Code Section 709.

ARTICLE
XI.

TRANSFERS AND WITHDRAWALS

Section 11.1                            Transfer.

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

B.                                     No Partnership
Interest shall be Transferred, in whole or in part, except in accordance with
the terms and conditions set forth in Section 4.7(i) and this Article
XI. Any Transfer or purported Transfer of a Partnership Interest not made
in accordance with Section 4.7(i) and this Article XI shall be
null and void ab initio unless
consented to by the General Partner in its sole and absolute discretion.

 40
 

C.                                     Notwithstanding
the other provisions of this Article XI (other than Section 11.6.D
hereof), the Partnership Interests of the General Partner may be Transferred,
at any time or from time to time, to any Person that is, at the time of such
Transfer, the Parent or any successor thereto or a Qualified REIT Subsidiary.
Any transferee of the entire General Partner Interest pursuant to this Section
11.1.C shall automatically become, without further action or Consent of any
Limited Partners, the sole general partner of the Partnership, subject to all
the rights, privileges, duties and obligations under this Agreement and the Act
relating to a general partner. Upon any Transfer permitted by this Section
11.1.C, the transferor Partner shall be relieved of all its obligations
under this Agreement. The provisions of Section 11.2.B (other than the
last sentence thereof), 11.3 and 11.4 hereof shall not apply to
any Transfer permitted by this Section 11.1.C.

D.                                    No Transfer of any
Partnership Interest may be made to a lender to the Partnership or any Person
who is related (within the meaning of Section 1.752-4(b) of the Regulations) to
any lender to the Partnership whose loan constitutes a Nonrecourse Liability,
without the consent of the General Partner in its sole and absolute discretion;
provided 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 redeem or exchange for REIT Shares any Partnership Units in which a
security interest is held by such lender concurrently with such time as such
lender would be deemed to be a partner in the Partnership for purposes of
allocating liabilities to such lender under Code Section 752.

Section 11.2                            Transfer
of General Partner’s Partnership Interest.

A.                                   The General Partner
may not Transfer any of its General Partner Interest or withdraw from the
Partnership except as provided in Sections 11.1.C, 11.2.B and 11.2.C
hereof.

B.                                     Except as set
forth in Section 11.1.C above and Section 11.2.C below, the
General Partner shall not withdraw from the Partnership and shall not Transfer
all or any portion of its interest in the Partnership (whether by sale,
disposition, statutory merger or consolidation, liquidation or otherwise)
without the Consent of a Majority in Interest of the Outside Limited Partners,
which Consent may be given or withheld in the sole and absolute discretion of
such Limited Partners. Upon any Transfer of such a Partnership Interest
pursuant to the Consent of a Majority in Interest of the Outside Limited
Partners and otherwise in accordance with the provisions of this Section
11.2.B, the transferee shall become a successor General Partner for all
purposes herein, and shall be vested with the powers and rights of the
transferor General Partner, and shall be liable for all obligations and
responsible for all duties of the General Partner, once such transferee has
executed such instruments as may be necessary to effectuate such admission and
to confirm the agreement of such transferee to be bound by all the terms and
provisions of this Agreement with respect to the Partnership Interest so
acquired. It is a condition to any Transfer otherwise permitted hereunder that
the transferee assumes, by operation of law or express agreement, all of the obligations
of the transferor General Partner under this Agreement with respect to such
Transferred Partnership Interest, and such Transfer shall relieve the
transferor General Partner of its obligations under this Agreement without the
Consent of a Majority in Interest of the Outside Limited Partners. In the event
that the General Partner withdraws from the Partnership, in violation of this
Agreement or otherwise, or otherwise dissolves or terminates, or upon the
Incapacity of the General Partner, all of the remaining Partners may elect to
continue the Partnership business by selecting a successor General Partner in
accordance with the Act.

C.                                     Notwithstanding Section
11.2.B, the General Partner may Transfer its Interest in connection with
any merger or sale of all or substantially all of the assets of the Parent.

Section 11.3                            Transfer
of Limited Partners’ Partnership Interests.

A.                                   No Limited Partner
shall Transfer all or any portion of its Partnership Interest to any transferee
without the consent of the General Partner, which consent may be withheld in
its sole and absolute discretion.

B.                                     Notwithstanding
any other provision of this Article XI (other than Section 11.6.D
hereof), the Partnership Interests of the Parent Limited Partner may be
Transferred in whole or in part, at any time and from time to time to any
Person that is, at the time of such Transfer, the Parent or any successor
thereto or any Qualified REIT Subsidiary.

 41

C.                                     Without limiting
the generality of Section 11.3.A hereof, it is expressly understood and
agreed that the General Partner will not consent to any Transfer of all or any
portion of any Partnership Interest pursuant to Section 11.3.A above
unless such Transfer meets each of the following conditions:

(i)                                     Such Transfer is
made only to a single Qualified Transferee; provided, however,
that, for such purposes, all Qualified Transferees that are Affiliates, or that
comprise investment accounts or funds managed by a single Qualified Transferee
and its Affiliates, shall be considered together to be a single Qualified
Transferee.

(ii)                                  The transferee in
such Transfer assumes by operation of law or express agreement all of the
obligations of the transferor Limited Partner under this Agreement with respect
to such Transferred Partnership Interest; provided, that no such
Transfer (unless made pursuant to a statutory merger or consolidation wherein
all obligations and liabilities of the transferor Partner are assumed by a
successor corporation by operation of law) shall relieve the transferor Partner
of its obligations under this Agreement without the approval of the General
Partner, in its sole and absolute discretion. Notwithstanding the foregoing,
any transferee of any Transferred Partnership Interest shall be subject to any
and all ownership limitations contained in the Charter that may limit or
restrict such transferee’s ability to exercise its Redemption rights,
including, without limitation, the Ownership Limit. Any transferee, whether or
not admitted as a Substituted Limited Partner, shall take subject to the
obligations of the transferor hereunder. Unless admitted as a Substituted
Limited Partner, no transferee, whether by a voluntary Transfer, by operation
of law or otherwise, shall have any rights hereunder, other than the rights of
an Assignee as provided in Section 11.5 hereof.

(iii)                               Such Transfer is
effective as of the first day of a fiscal quarter of the Partnership.

D.                                    If a Limited
Partner is subject to Incapacity, the executor, administrator, trustee,
committee, guardian, conservator or receiver of such Limited Partner’s estate
shall have all the rights of a Limited Partner, but not more rights than those
enjoyed by other Limited 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 its interest in the Partnership. The Incapacity of
a Limited Partner, in and of itself, shall not dissolve or terminate the Partnership.

E.                                      In connection
with any proposed Transfer of a Limited Partner Interest, the General Partner
shall have the right to receive an opinion of counsel reasonably satisfactory
to it to the effect that the proposed Transfer may be effected without registration
under the Securities Act and will not otherwise violate any federal or state
securities laws or regulations applicable to the Partnership or the Partnership
Interests Transferred.

F.                                      No Transfer by a
Limited Partner of its Partnership Interests (including any Redemption, any
other acquisition of Partnership Units by the Partnership or the General
Partner) may be made to or by any person if (i) in the opinion of legal counsel
for the Partnership, it would result in the Partnership being treated as an association
taxable as a corporation or would result in a termination of the Partnership
under Code Section 708, (ii) in the opinion of legal counsel for the
Partnership, it would adversely affect the ability of the Parent to continue to
qualify as a REIT or would subject the Parent to any additional taxes under
Code Section 857 or Code Section 4981, or (iii) such Transfer would be
effectuated through an “established securities market” or a “secondary market
(or the substantial equivalent thereof)” within the meaning of Code Section
7704 (provided that this clause (iii) shall not be the basis for limiting or
restricting in any manner the exercise of a Redemption Right unless, and only
to the extent 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).

Section 11.4                            Substituted
Limited Partners.

A.                                   A transferee of the
interest of a Limited Partner pursuant to a Transfer consented to by the
General Partner pursuant to Section 11.3.A may be admitted as a
Substituted Limited Partner only with the consent of the General Partner, which
consent may be given or withheld by the General Partner in its sole and
absolute discretion. The failure or refusal by the General Partner to permit a
transferee of any such interests to become a Substituted Limited Partner shall
not give rise to any cause of action against the Partnership or the General
Partner. Subject to the foregoing, an Assignee shall not be admitted as a
Substituted Limited Partner until and unless it furnishes to the General
Partner (i) evidence of acceptance, in form and substance satisfactory to the
General Partner, of all the terms, conditions and applicable obligations of
this Agreement, (ii) a counterpart signature page to this Agreement

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executed by such Assignee, and (iii) such other documents and
instruments as may be required or advisable, in the sole and absolute
discretion of the General Partner, to effect such Assignee’s admission as a
Substituted Limited Partner.

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

C.                                     Upon the admission
of a Substituted Limited Partner, the General Partner shall amend Exhibit A
to reflect the name, address and number of Partnership Units of such
Substituted Limited Partner and to eliminate or adjust, if necessary, the name,
address and number of Partnership Units of the predecessor of such Substituted
Limited Partner.

Section 11.5                            Assignees.
If the General Partner, in its sole and absolute discretion, does not consent
to the admission of any transferee of any Partnership Interest as a Substituted
Limited Partner in connection with a transfer permitted by the General Partner
pursuant to Section 11.3.A, such transferee shall be considered an
Assignee for purposes of this Agreement. An Assignee shall be entitled to all
the rights of an assignee of a limited partnership interest under the Act,
including the right to receive distributions from the Partnership and the share
of Net Income, Net Losses and other items of income, gain, loss, deduction and
credit of the Partnership attributable to the Partnership Units assigned to
such transferee and the rights to Transfer the Partnership Units only in
accordance with the provisions of this Article XI, 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 effect a Consent or vote or effect a
Redemption with respect to such Partnership Units on any matter presented to
the Limited Partners for approval (such right to Consent or vote or effect a
Redemption, to the extent provided in this Agreement or under the Act, fully
remaining with the transferor Limited Partner). In the event that any such
transferee desires to make a further assignment of any such Partnership Units,
such transferee shall be subject to all the provisions of this Article XI
to the same extent and in the same manner as any Limited Partner desiring to
make an assignment of Partnership Units.

Section 11.6                            General
Provisions.

A.                                   No
Limited Partner may withdraw from the Partnership other than as a result of a
permitted Transfer of all of such Limited Partner’s Partnership Units in
accordance with this Article XI, with respect to which the transferee
becomes a Substituted Limited Partner, or pursuant to a redemption (or
acquisition by the General Partner) of all of its Partnership Units pursuant to
a Redemption under Section 8.6 hereof and/or pursuant to any Partnership
Unit Designation.

B.                                     Any
Limited Partner who shall Transfer all of its Partnership Units in a Transfer
(i) consented to by the General Partner pursuant to this Article XI
where such transferee was admitted as a Substituted Limited Partner, (ii)
pursuant to the exercise of its rights to effect a redemption of all of its
Partnership Units pursuant to a Redemption under Section 8.6 hereof
and/or pursuant to any Partnership Unit Designation, or (iii) to the General
Partner, whether or not pursuant to Section 8.6.B hereof, shall cease to
be a Limited Partner.

C.                                     If
any Partnership Unit is Transferred in compliance with the provisions of this Article
XI, or is redeemed by the Partnership, or acquired by the General Partner
pursuant to Section 8.6 hereof, on any day other than the first day of a
Partnership Year, then Net Income, Net Losses, each item thereof and all other
items of income, gain, loss, deduction and credit attributable to such
Partnership Unit for such Partnership Year shall be allocated to the transferor
Partner or the Tendering Partner, as the case may be, and, in the case of a
Transfer or assignment other than a Redemption, to the transferee Partner, by
taking into account their varying interests during the Partnership Year in
accordance with Code Section 706(d), using the “interim closing of the books”
method or another permissible method selected by the General Partner. Solely
for purposes of making such allocations, each of such items for the calendar
month in which a Transfer occurs shall be allocated to the transferee Partner
and none of such items for the calendar month in which a Transfer or a
Redemption occurs shall be allocated to the transferor Partner or the Tendering
Partner, as the case may be, if such Transfer occurs on or before the 15th day
of the month, otherwise such items shall be allocated to the transferor. All
distributions of Available Cash attributable to such Partnership Unit with
respect to which the Partnership Record Date is before the date of such
Transfer, assignment or Redemption shall be made to the transferor Partner or
the Tendering Partner, as the case may be, and, in the case

 43
 

of a Transfer other than
a Redemption, all distributions of Available Cash thereafter attributable to
such Partnership Unit shall be made to the transferee Partner.

D.                                    In no event may any
Transfer or assignment of a Partnership Interest by any Partner (including any
Redemption, any acquisition of Partnership Units by the General Partner or any
other acquisition of Partnership Units by the Partnership) be made (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) in the event that such Transfer would cause the Parent to cease
to comply with the REIT Requirements; (v) if such Transfer would, in the
opinion of counsel to the Partnership or the General Partner, cause a
termination of the Partnership for federal or state income tax purposes; (vi)
if such Transfer would, in the opinion of legal counsel to the Partnership,
cause the Partnership to cease to be classified as a partnership for federal
income tax purposes; (vii) if 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 ERISA Section 3(14)) or a “disqualified person” (as defined in
Code Section 4975(c)); (viii) without the consent of the General Partner, to
any benefit plan investor within the meaning of Department of Labor Regulations
Section 2510.3-101(f); (ix) if such Transfer would, in the opinion of legal
counsel to the Partnership or the General Partner, 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; (x) if such
Transfer requires the registration of such Partnership Interest pursuant to any
applicable federal or state securities laws; (xi) if such Transfer would, in
the opinion of legal counsel to the Partnership or the General Partner,
adversely affect the ability of the Parent to continue to qualify as a REIT or
would subject the Parent to any additional taxes under Code Section 857 or Code
Section 4981; (xi) if such transfer would be effectuated through an “established
securities market” or a “secondary market (or the substantial equivalent
thereof)” within the meaning of Code Section 7704 (provided that this clause
(xii) shall not be the basis for limiting or restricting in any manner the
exercise of a Redemption Right unless, and only to the extent 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); (xiii) if such Transfer would cause the
Partnership to have more than 100 partners (including as partners those persons
indirectly owning an interest in the Partnership through a partnership, limited
liability company, subchapter S corporation or grantor trust); (xiv) if such
Transfer causes the Partnership (as opposed to the Parent) to become a
reporting company under the Exchange Act; or (xv) if such Transfer subjects the
Partnership to regulation under the Investment Company Act of 1940, the
Investment Advisors Act of 1940 or ERISA, each as amended.

ARTICLE
XII.

ADMISSION OF PARTNERS

Section 12.1                            Admission
of Successor General Partner

. A successor to all of the General Partner’s General
Partner Interest pursuant to Section 11.2 hereof who is proposed to be
admitted as a successor General Partner shall be admitted to the Partnership as
the General Partner, effective immediately prior to such Transfer. Any such
successor shall carry on the business of the Partnership without dissolution.
In each case, the admission shall be subject to the successor General Partner
executing and delivering to the Partnership an acceptance of all of the terms
and conditions of this Agreement and such other documents or instruments as may
be required to effect the admission.

Section 12.2                            Admission
of Additional Limited Partners.

A.                                   After the date
hereof, a Person (other than an existing Partner) who makes a Capital
Contribution to the Partnership in accordance with this Agreement shall be
admitted to the Partnership as an Additional Limited Partner only upon
furnishing to the General Partner (i) evidence of acceptance, in form and
substance satisfactory to the General Partner, of all of the terms and
conditions of this Agreement, including, without limitation, the power of
attorney granted in Section 2.4 hereof, (ii) a counterpart signature
page to this Agreement executed by such Person, and (iii) such other documents
or instruments as may be required in the sole and absolute discretion of the
General Partner in order to effect such Person’s admission as an Additional
Limited Partner.

B.                                     Notwithstanding
anything to the contrary in this Section 12.2, no Person shall be
admitted as an Additional Limited Partner without the consent of the General
Partner, which consent may be given or withheld in

 44
 

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

C.                                     If any Additional
Limited Partner is admitted to the Partnership on any day other than the first
day of a Partnership Year, then Net Income, Net Losses, each item thereof and
all other items of income, gain, loss, deduction and credit allocable among
Partners and Assignees for such Partnership Year shall be allocated pro rata 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 Code Section
706(d), using the “interim closing of the books” method or another permissible
method selected by the General Partner. Solely for purposes of making such
allocations, each of such items for the calendar month in which an admission of
any Additional Limited Partner occurs shall be allocated among all the Partners
and Assignees including such Additional Limited Partner, in accordance with the
principles described in Section 11.6.C hereof. All distributions of
Available Cash with respect to which the Partnership Record Date is before the
date of such admission shall be made solely to Partners and Assignees other
than the Additional Limited Partner, and all distributions of Available Cash
thereafter shall be made to all the Partners and Assignees including such
Additional Limited Partner.

Section 12.3                            Amendment
of Agreement and Certificate of Limited Partnership. For the admission to
the Partnership of any Partner, the General Partner shall take all steps
necessary and appropriate under the Act to amend the records of the Partnership
and, if necessary, to prepare as soon as practical an amendment of this
Agreement (including an amendment of Exhibit A) and, if required by law,
shall prepare and file an amendment to the Certificate and may for this purpose
exercise the power of attorney granted pursuant to Section 2.4 hereof.

Section 12.4                            Limit
on Number of Partners. Unless otherwise permitted by the General Partner,
no Person shall be admitted to the Partnership as an Additional Limited Partner
if the effect of such admission would be to cause the Partnership to have a
number of Partners (including as Partners for this purpose those Persons indirectly
owning an interest in the Partnership through another partnership, a limited
liability company, a subchapter S corporation or a grantor trust) that would
cause the Partnership to become a reporting company under the Exchange Act.

ARTICLE
XIII.

DISSOLUTION, LIQUIDATION AND TERMINATION

Section 13.1                            Dissolution.
The Partnership shall not be dissolved by the admission of 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
without dissolution. However, the Partnership shall dissolve, and its affairs
shall be wound up, upon the first to occur of any of the following (each a “Liquidating
Event”):

A.                                   the expiration of
its term as provided in Section 2.5;

B.                                     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, a Majority in Interest of the remaining Outside Limited
Partners agree in writing, in their sole and absolute discretion, 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 successor General Partner;

C.                                     an election to
dissolve the Partnership made by the General Partner in its sole and absolute
discretion, with or without the Consent of a Majority in Interest of the
Outside Limited Partners;

D.                                    entry of a decree of
judicial dissolution of the Partnership pursuant to the provisions of the Act;

E.                                      the occurrence of
a Terminating Capital Transaction; or

 45
 

F.                                      the Redemption
(or acquisition by the General Partner) of all Partnership Units other than
Partnership Units held by the General Partner and the Parent Limited Partner;
or

G.                                     the Incapacity of
the General Partner, unless all of the remaining Partners in their sole and
absolute discretion agree in writing to continue the business of the
Partnership and to the appointment, effective as of a date prior to the date of
such Incapacity, of a substitute General Partner.

Section 13.2                            Winding
Up.

A.                                   Upon the occurrence
of a Liquidating Event, the Partnership shall continue solely for the purposes
of winding up its affairs in an orderly manner, liquidating its assets and
satisfying the claims of its creditors and Partners. After the occurrence of a
Liquidating Event, no Partner shall take any action that is inconsistent with,
or not necessary to or appropriate for, the winding up of the Partnership’s
business and affairs. The General Partner or, in the event that there is no
remaining General Partner or the General Partner has dissolved, become bankrupt
within the meaning of the Act or ceased to operate, any Person elected by a
Majority in Interest of the Outside Limited Partners (the General Partner or
such other Person being referred to herein as the “Liquidator”) shall be
responsible for overseeing the winding up and dissolution of the Partnership
and shall take full account of the 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 stock in the
General Partner) shall be applied and distributed in the following order:

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

(ii)                                  Second, to the
satisfaction of all of the Partnership’s debts and liabilities to the General
Partner (whether by payment or the making of reasonable provision for payment
thereof), including, but not limited to, amounts due as reimbursements under Section
7.4 hereof;

(iii)                               Third, to the
satisfaction of all of the Partnership’s debts and liabilities to the other
Partners and any Assignees (whether by payment or the making of reasonable
provision for payment thereof); and

(iv)                              The balance, if any, to
the General Partner, the Limited Partners and any Assignees in accordance with
their Capital Account balances, after giving effect to all contributions,
distributions and allocations for all periods; provided, however, that the
distribution provisions in this Section 13.2.A(iv) shall be made by
giving effect to Section 6.2.C hereof and any distributions under this Section
13.2.A(iv) shall be made first to Holders of Series A Preferred Units.

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

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

 46
 

C.                                     In the event that
the Partnership is “liquidated” within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Article
XIII to the Partners and Assignees that have positive Capital Accounts in
compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2) to the extent of,
and in proportion to, positive Capital Account balances. If any Partner has a
deficit balance in its Capital Account (after giving effect to all
contributions, distributions and allocations for all taxable years, including
the year during which such liquidation occurs) (a “Capital Account Deficit”),
such Partner shall not be required to make any contribution to the capital of
the Partnership with respect to a Capital Account Deficit, if any, of such
Partner, and such Capital Account Deficit shall not be considered a debt owed
to the Partnership or any other person for any purpose whatsoever.

D.                                    Notwithstanding the
foregoing, (i) if the General Partner has a Capital Account Deficit, the
General Partner shall contribute to the capital of the Partnership the amount
necessary to restore such Capital Account Deficit balance to zero; (ii) if an
Obligated Partner has a Capital Account Deficit, such Obligated Partner shall
be obligated to make a contribution to the Partnership with respect to any such
Capital Account Deficit balance upon a liquidation of the Partnership or a “liquidation”
of such Partner’s Partnership Interest within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g) (which term shall include a redemption by the
Partnership of such Obligated Partner’s Partnership Interest upon exercise of
the Redemption Right) in an amount equal to the lesser of such Capital Account
Deficit balance or such Obligated Partner’s Protected Amount; and (iii) the
second sentence of Section 13.2.C shall not apply with respect to any
other Partner to the extent, but only to the extent, that such Partner
previously has agreed in writing, with the consent of the General Partner, to
undertake an express obligation to restore all or any portion of a deficit that
may exist in its Capital Account upon a liquidation of the Partnership. Solely
for purposes of determining an Obligated Partner’s Capital Account balance upon
a liquidation of such Partner’s Partnership Interest, the General Partner shall
redetermine the Gross Asset Value of the Partnership’s assets on such date
based upon the principles set forth in the definition of “Gross Asset Value,”
and shall take into account the Obligated Partner’s allocable share of any
unrealized gain or unrealized loss resulting from such adjustment in
determining the Obligated Partner’s Capital Account balance. No Partner shall
have any right to become an Obligated Partner, to increase its Protected
Amount, or otherwise agree to restore any portion of any Capital Account
Deficit without the express written consent of the General Partner, in its sole
and absolute discretion. The General Partner shall not have the right to
eliminate or decrease any Partner’s Protected Amount without the written
consent of such Partner unless otherwise agreed to by the parties. Any
contribution required of a Partner under this Section 13.2.D shall be
made on or before the later of (i) the end of the Partnership Year in which the
interest is liquidated or (ii) the ninetieth (90th) day following the date of
such liquidation. The proceeds of any contribution to the Partnership made by
an Obligated Partner with respect to such Obligated Partner’s Capital Account
Deficit balance shall be treated as a Capital Contribution by such Obligated
Partner and the proceeds thereof shall be treated as assets of the Partnership
to be applied as set forth in Section 13.2.A.

E.                                      In the sole and
absolute discretion of the General Partner or the Liquidator, a pro rata portion of the distributions that
would otherwise be made to the Partners pursuant to this Article XIII
may be:

(i)                                     distributed to a
trust established for the benefit of the General Partner and the Limited
Partners for the purpose of liquidating Partnership assets, collecting amounts
owed to the Partnership, and paying any contingent or unforeseen liabilities or
obligations of the Partnership or of the General Partner arising out of or in
connection with the Partnership and/or Partnership activities. The assets of
any such trust shall be distributed to the General Partner and the Limited
Partners, from time to time, in the reasonable discretion of the General
Partner or the Liquidator, in the same proportions and amounts as would
otherwise have been distributed to the General Partner and the Limited Partners
pursuant to this Agreement; or

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

Section 13.3                            Deemed
Distribution and Recontribution. Notwithstanding any other provision of
this Article XIII, in the event that the Partnership is liquidated
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), but no
Liquidating Event has occurred, the Partnership’s Property shall not be liquidated,
the Partnership’s liabilities shall not be paid or discharged and the
Partnership’s affairs shall not be wound up. Instead, for federal income tax

 47
 

purposes the Partnership
shall be deemed to have contributed all of its assets and liabilities to a new
partnership in exchange for an interest in the new partnership; and,
immediately thereafter, distributed interests in the new partnership to the
Partners in accordance with their respective Capital Accounts in liquidation of
the Partnership, and the new partnership is deemed to continue the business of
the Partnership. Nothing in this Section 13.3 shall be deemed to have
constituted any Assignee as a Substituted Limited Partner without compliance
with the provisions of Section 11.4 hereof.

Section 13.4                            Rights
of Limited Partners. Except as otherwise provided in this Agreement, (a)
each Limited Partner shall look solely to the assets of the Partnership for the
return of its Capital Contribution, (b) no Limited Partner shall have the right
or power to demand or receive property other than cash from the Partnership,
and (c) no Limited Partner (other than any Limited Partner who holds Preferred
Units, including Series A Preferred Units, to the extent specifically set forth
herein and in the applicable Partnership Unit Designation) shall have priority
over any other Limited Partner as to the return of its Capital Contributions,
distributions or allocations.

Section 13.5                            Notice
of Dissolution. In the event that a Liquidating Event occurs or an event
occurs that would, but for an election or objection by one or more Partners
pursuant to Section 13.1 hereof, result in a dissolution of the
Partnership, the General Partner shall, within 30 days thereafter, provide
written notice thereof to each of the Partners and, in the General Partner’s
sole and absolute discretion or as required by the Act, to all other parties
with whom the Partnership regularly conducts business (as determined in the
sole and absolute discretion of the General Partner), and the General Partner
may, or, if required by the Act, shall, publish notice thereof in a newspaper
of general circulation in each place in which the Partnership regularly
conducts business (as determined in the sole and absolute discretion of the
General Partner).

Section 13.6                            Cancellation
of Certificate of Limited Partnership. Upon the completion of the
liquidation of the Partnership cash and property as provided in Section 13.2
hereof, the Partnership shall be terminated, a certificate of cancellation
shall be filed with the State of Delaware, all qualifications of the
Partnership as a foreign limited partnership or association in jurisdictions
other than the State of Delaware shall be cancelled, and such other actions as
may be necessary to terminate the Partnership shall be taken.

Section 13.7                            Reasonable
Time for Winding-Up. A reasonable time shall be allowed for the orderly
winding-up of the business and affairs of the Partnership and the liquidation
of its assets pursuant to Section 13.2 hereof, in order to minimize any losses
otherwise attendant upon such winding up, and the provisions of this Agreement
shall remain in effect between the Partners during the period of liquidation.

ARTICLE
XIV.

PROCEDURES FOR ACTIONS AND CONSENTS 

OF PARTNERS; AMENDMENTS; MEETINGS

Section 14.1                            Procedures
for Actions and Consents of Partners. The actions requiring consent or
approval of Limited Partners pursuant to this Agreement, including Section
7.3 hereof, or otherwise pursuant to applicable law, are subject to the
procedures set forth in this Article XIV.

Section 14.2                            Amendments.
Amendments to this Agreement requiring Consent of the Limited Partners may be
proposed by the General Partner. Following such proposal, the General Partner
shall submit any proposed amendment to the Limited Partners. The General
Partner shall seek the written consent of the Limited Partners on the proposed
amendment or shall call a meeting to vote thereon and to transact any other
business that the General Partner may deem appropriate. For purposes of
obtaining a written consent, the General Partner may require a response within
a reasonable specified time, but not less than 10 days, and failure to respond
in such time period shall constitute a consent that is consistent with the
General Partner’s recommendation with respect to the proposal; provided,
however, that an action shall become effective at such time as requisite
consents are received even if prior to such specified time. Notwithstanding
anything to the contrary in this Agreement, the General Partner shall have the
power, without the consent of the Limited Partners, to amend this Agreement as
may be required to reflect the admission, substitution, termination or
withdrawal of Partners or an increase or decrease in a Partner’s Protected
Amount in accordance with this Agreement (which may be affected through the
replacement of Exhibit C with an amended Exhibit C).

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Section 14.3                            Meetings
of the Partners.

A.                                   Meetings of the
Partners may be called by the General Partner and shall be called upon the
receipt by the General Partner of a written request by a Majority in Interest
of the Outside Limited Partners. The call shall state the nature of the
business to be transacted. Notice of any such meeting shall be given to all
Partners not less than seven days nor more than 30 days prior to the date of
such meeting. Partners may vote in person or by proxy at such meeting. Whenever
the vote or Consent of Partners is permitted or required under this Agreement,
such vote or Consent may be given at a meeting of Partners or may be given in
accordance with the procedure prescribed in Section 14.3.B hereof.

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

C.                                     Each Limited
Partner may authorize any Person or Persons to act for it by proxy on all
matters in which a Limited Partner is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. Every
proxy must be signed by the Limited Partner or its attorney-in-fact. No proxy
shall be valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy (or there is receipt of a proxy authorizing a
later date). Every proxy shall be revocable at the pleasure of the Limited
Partner executing it, such revocation to be effective upon the Partnership’s
receipt of written notice of such revocation from the Limited Partner executing
such proxy. The use of proxies will be governed in the same manner as in the
case of corporations organized under the General Corporation Law of Delaware
(including Section 212 thereof).

D.                                    Each meeting of
Partners shall be conducted by the General Partner or such other Person as the
General Partner may appoint pursuant to such rules for the conduct of the
meeting as the General Partner or such other Person deems appropriate in its
sole and absolute discretion. Without limitation, meetings of Partners may be
conducted in the same manner as meetings of the General Partner’s stockholders
and may be held at the same time as, and as part of, the meetings of the
General Partner’s stockholders.

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

F.                                      Except as
otherwise expressly provided in this Agreement, the Consent of Holders of
Partnership Interests representing a majority of the Partnership Interests of
the Limited Partners shall control.

ARTICLE
XV.

GENERAL PROVISIONS

Section 15.1                            Addresses
and Notice. Any notice, demand, request or report required or permitted to
be given or made to a Partner or Assignee under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when sent
by first class United States mail or by other means of written communication
(including by telecopy, facsimile, or commercial courier service) 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.

Section 15.2                            Titles
and Captions. All article or section titles or captions in this Agreement
are for convenience only. They shall not be deemed part of this Agreement and
in no way define, limit, extend or describe the scope or intent of any
provisions hereof. Except as specifically provided otherwise, references to “Articles”
or “Sections” are to Articles and Sections of this
Agreement.

 49
 

Section 15.3                            Pronouns
and Plurals. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa.

Section 15.4                            Further
Action. The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.

Section 15.5                            Binding
Effect. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their heirs, executors, administrators, successors,
legal representatives and permitted assigns.

Section 15.6                            Waiver.

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

B.                                     The restrictions,
conditions and other limitations on the rights and benefits of the Limited
Partners contained in this Agreement, and the duties, covenants and other
requirements of performance or notice by the Limited Partners, are for the
benefit of the Partnership and, except for an obligation to pay money to the
Partnership, may be waived or relinquished by the General Partner, in its sole
and absolute discretion, on behalf of the Partnership in one or more instances
from time to time and at any time.

Section 15.7                            Counterparts.
This Agreement may be executed in counterparts, all of which together shall
constitute one agreement binding on all the parties hereto, notwithstanding
that all such parties are not signatories to the original or the same
counterpart. Each party shall become bound by this Agreement immediately upon
affixing its signature hereto.

Section 15.8                            Applicable
Law. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of law. In the event of a conflict between any provision of this
Agreement and any non-mandatory provision of the Act, the provisions of this
Agreement shall control and take precedence.

Section 15.9                            Entire
Agreement. This Agreement contains all of the understandings and agreements
between and among the Partners with respect to the subject matter of this
Agreement and the rights, interests and obligations of the Partners with
respect to the Partnership.

Section 15.10                     Invalidity of
Provisions. If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby.

Section 15.11                     Limitation to
Preserve REIT Status. Notwithstanding anything else in this Agreement, to
the extent that the amount paid, credited, distributed or reimbursed by the
Partnership to the Parent, the General Partner or the Parent Limited Partner or
their trustees, officers, directors, employees or agents, whether as a
reimbursement, fee, expense or indemnity (a “REIT Payment”), would
constitute gross income to the Parent for purposes of Code Section 856(c)(2) or
Code Section 856(c)(3), then, notwithstanding any other provision of this
Agreement, the amount of such REIT Payments, as selected by the General Partner
in its discretion from among items of potential distribution, reimbursement,
fees, expenses and indemnities, shall be reduced for any Partnership Year so
that the REIT Payments, as so reduced, for or with respect to the Parent, the
General Partner or the Parent Limited Partner, shall not exceed the lesser of:

(i)                                     an
amount equal to the excess, if any, of (a) 4.9% of the Parent’s total gross
income (but excluding the amount of any REIT Payments) for the Partnership Year
that is described in subsections (A) through (H) of Code Section 856(c)(2) over
(b) the amount of gross income (within the meaning of Code Section 856(c)(2))
derived by the Parent from sources other than those described in subsections
(A) through (H) of Code Section 856(c)(2) (but not including the amount of any
REIT Payments); or

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(ii)                                  an
amount equal to the excess, if any, of (a) 24% of the Parent’s total gross
income (but excluding the amount of any REIT Payments) for the Partnership Year
that is described in subsections (A) through (I) of Code Section 856(c)(3) over
(b) the amount of gross income (within the meaning of Code Section 856(c)(3))
derived by the Parent from sources other than those described in subsections
(A) through (I) of Code Section 856(c)(3) (but not including the amount of any
REIT Payments); provided, however, that REIT Payments in excess
of the amounts set forth in clauses (i) and (ii) above may be made if the
General Partner, as a condition precedent, obtains an opinion of tax counsel
that the receipt of such excess amounts shall not adversely affect the Parent’s
ability to qualify as a REIT. To the extent that REIT Payments may not be made
in a Partnership Year as a consequence of the limitations set forth in this Section
15.11, such REIT Payments shall carry over and shall be treated as arising
in the following Partnership Year. The purpose of the limitations contained in
this Section 15.11 is to prevent the Parent from failing to qualify as a
REIT under the Code by reason of the Parent’s share of items, including
distributions, reimbursements, fees, expenses or indemnities, receivable
directly or indirectly from the Partnership, and this Section 15.11
shall be interpreted and applied to effectuate such purpose.

Section 15.12                     No Partition.
No Partner nor any successor-in-interest to a Partner shall have the right
while this Agreement remains in effect to have any property of the Partnership
partitioned, or to file a complaint or institute any proceeding at law or in
equity to have such property of the Partnership partitioned, and each Partner,
on behalf of itself and its successors and assigns hereby waives any such
right. It is the intention of the Partners that the rights of the parties
hereto and their successors-in-interest to Partnership property, as among
themselves, shall be governed by the terms of this Agreement, and that the
rights of the Partners and their successors-in-interest shall be subject to the
limitations and restrictions as set forth in this Agreement.

Section 15.13                     No
Third-Party Rights Created Hereby. The provisions of this Agreement are
solely for the purpose of defining the interests of the Partners, inter se; and no other person, firm or
entity (i.e., a party who is not
a signatory hereto or a permitted successor to such signatory hereto) shall
have any right, power, title or interest by way of subrogation or otherwise, in
and to the rights, powers, title and provisions of this Agreement. No creditor
or other third party having dealings with the Partnership (other than as
expressly set forth herein with respect to Indemnitees) shall have the right to
enforce the right or obligation of any Partner to make Capital Contributions or
loans to the Partnership or to pursue any other right or remedy hereunder or at
law or in equity. None of the rights or obligations of the Partners herein set
forth to make Capital Contributions or loans to the Partnership shall be deemed
an asset of the Partnership for any purpose by any creditor or other third
party, nor may any such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or any of the Partners.

Section 15.14                     No Rights as
Shareholders of General Partner or Stockholders of Parent. Nothing
contained in this Agreement shall be construed as conferring upon the Holders
of Partnership Units any rights whatsoever as shareholders of the General
Partner or stockholders of the Parent, including without limitation any right
to receive dividends or other distributions made to shareholders of the General
Partner or stockholders of the Parent or to vote or to consent or receive
notice as shareholders in respect of any meeting of shareholders for the
election of trustees of the General Partner or of any meeting of the
stockholders of the Parent for the election of directors or any other matter.

Section 15.15                     Creditors.
Other than as expressly set forth herein with respect to Indemnitees, none of
the provisions of this Agreement shall be for the benefit of, or shall be
enforceable by, any creditor of the Partnership.

ARTICLE
XVI.

SERIES A PARTICIPATING REDEEMABLE PREFERRED UNITS

Section 16.1                            Designation
and Number.

A series of Partnership Units in the Partnership
designated as the “Series A Participating Redeemable Preferred Units” (the
“Series A Preferred Units”) is hereby established.

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Section 16.2                            Distributions.

A.                                   Payment of
Preferred Distributions. Pursuant to Section 5.1, each Holder of the Series A
Preferred Units will be entitled to receive, at least quarterly to the extent
of Available Cash, an amount equal to the Series A Preferred Priority
Return. Such distributions shall be cumulative, shall accrue from the original
date of issuance and will be payable quarterly (such quarterly periods for
purposes of payment and accrual will be the quarterly periods ending on the
dates specified in this sentence and not calendar quarters) in arrears, on or
about the date of any distribution made with respect to the OP Units,
commencing on the first of such dates to occur after the original date of
issuance (the “Series A Preferred Unit Distribution Payment Date”).
If any date on which distributions are to be made on the Series A
Preferred Units is not a Business Day, then payment of the distribution to be
made on such date will be made on the next succeeding day that is a Business
Day.

B.                                     Preferred
Distributions Cumulative. Notwithstanding the foregoing, distributions on
the Series A Preferred Units will accrue whether or not the terms and
provisions set forth in Section 16.2.C hereof at any time prohibit
the current payment of distributions, whether or not the Partnership has
earnings, whether or not there are funds legally available for the payment of
such distributions and whether or not such distributions are authorized.

C.                                     Priority as to
Distributions. 

(i)                                     No distributions
shall be declared or paid or set apart for payment and no other distribution of
cash or other property may be declared or made on or with respect to any Junior
Unit or Preferred Unit (that is not a Series A Preferred Unit) as to
distributions (other than a distribution paid in Junior Units or Preferred
Units (that are not Series A Preferred Units) as to distributions and upon
liquidation) for any period, nor shall any Junior Units or Preferred Units
(that are not Series A Preferred Units) as to distributions or upon liquidation
be redeemed, purchased or otherwise acquired for any consideration (and no
funds shall be paid or made available for a sinking fund for the redemption of
such units) and no other distribution of cash or other property may be made,
directly or indirectly, on or with respect thereto by the Partnership (except
by conversion into or exchange for Junior Units or Preferred Units (that are
not Preferred Units) as to distributions and upon liquidation or pursuant to
the Charter to the extent necessary to preserve the Parent’s status as a REIT),
unless full cumulative distributions on the Series A Preferred Units for
all past periods shall have been or contemporaneously are (i) declared and
paid in cash or (ii) declared and a sum sufficient for the payment thereof
in cash is set apart for such payment.

(ii)                                  No interest, or sum
of money in lieu of interest, shall be payable in respect of any distribution
payment or payments on the Series A Preferred Units which may be in
arrears.

D.                                    Series A
Preferred Return.  Holders of Series
A Preferred Units will be entitled to receive the Series A Preferred Return,
which will be paid to Holders of Series A Preferred Units as part of the Series
A Preferred Priority Return and before any distributions are made to Holders of
OP Units pursuant to Section 5.1(3).

E.                                      No Further
Rights. Holders of the Series A Preferred Units shall not be entitled
to any distributions, whether payable in cash, other property or otherwise, in
excess of the full cumulative distributions described herein. Any distribution
payment made on the Series A Preferred Units shall first be credited
against the earliest accrued but unpaid distribution due with respect to such
Series A Preferred Units which remains payable.  Accrued but unpaid distributions on the
Series A Preferred Units will accumulate as of the Series A Preferred
Unit Distribution Payment Date on which they first become payable.

Section 16.3                            Liquidation
Proceeds.

A.                                   Distributions.
Upon any voluntary or involuntary liquidation, dissolution or winding-up of the
affairs of the Partnership, distributions on the Series A Preferred Units
shall be made in accordance with Article 13 hereof.

B.                                     Notice.
Written notice of any such voluntary or involuntary liquidation, dissolution or
winding-up of the Partnership, stating the payment date or dates when, and the
place or places where, the amounts distributable in such circumstances shall be
payable, shall be given by the General Partner pursuant to Section 13.5
hereof.

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C.                                     No Further
Rights. After payment of the full amount of the liquidating distributions
to which they are entitled pursuant to this Section 16.3, the Holders of the
Series A Preferred Units will have no right or claim to any of the
remaining assets of the Partnership.

D.                                    Consolidation,
Merger or Certain Other Transactions. The voluntary sale, conveyance,
lease, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Partnership to, or the consolidation or merger or other business combination of
the Partnership with or into, any corporation, trust or other entity (or of any
corporation, trust or other entity with or into the Partnership) shall not be
deemed to constitute a liquidation, dissolution or winding-up of the
Partnership.

Section 16.4                            Redemption.

A.                                   On or after
September 1, 2008, with respect to the Series A Preferred Units, each Holder of
Series A Preferred Units shall have the right (subject to the terms and
conditions set forth herein and in any separate agreement entered into between
the Partnership and the Holder of such Series A Preferred Units that provides otherwise)
to require the Partnership to redeem (a “Series A Preferred Redemption”)
all or a portion of the Series A Preferred Units held by such Holder (such
Series A Preferred Units being hereafter referred to as “Tendered Series A
Preferred Units”) in exchange for a cash amount per Series A Preferred Unit
(the “Series A Preferred Redemption Amount”) equal to the sum of (i) the
Series A Preferred Capital and (ii) the product of (x) the Adjustment Factor
and (y) the Value of a REIT Share unless the terms of such Series A Preferred
Units or such separate agreement provides that such Series A Preferred Units
are not entitled to a right of Series A Preferred Redemption or are entitled to
consideration other than the Series A Preferred Redemption Amount.  The tendering Series A Preferred Unit Holder
shall have no right, with respect to any Series A Preferred Units so redeemed,
to receive any distributions paid on or after the Series A Preferred Redemption
Date. Any Series A Preferred Redemption shall be exercised pursuant to a Notice
of Series A Preferred Redemption delivered to the General Partner by the Series
A Preferred Unit Holder who is exercising the right (the “Tendering Series A
Preferred Unit Holder”) and surrender to the General Partner of
certificates representing the Series A Preferred Units. The Series A Preferred
Redemption Amount shall be payable to the Tendering Series A Preferred Unit
Holder on the Series A Preferred Redemption Date.

B.                                     Notwithstanding Section
16.4.A above, if a Series A Preferred Unit Holder has delivered to the
General Partner a Notice of Series A Preferred Redemption and the certificates
representing the Series A Preferred Units, then the Parent may, in its sole and
absolute discretion (subject to the limitations on ownership and transfer of
REIT Shares set forth in the Charter), elect to assume and satisfy the General
Partner’s Series A Preferred Redemption obligation and acquire some or all of
the Tendered Series A Preferred Units from the Tendering Series A Preferred
Unit Holder in exchange for the Series A Preferred REIT Shares Amount (as of
the Series A Preferred Redemption Date) and, if the Parent so elects, the
Tendering Series A Preferred Unit Holder shall sell the Tendered Series A
Preferred Units to the Parent in exchange for the Series A Preferred REIT
Shares Amount (to the extent then permitted by the rules of the New York Stock
Exchange without having to obtain the approval of Parent’s stockholders). In
such event, the Tendering Series A Preferred Unit Holder shall have no right to
cause the Partnership to redeem such Tendered Series A Preferred Units. The
Parent shall promptly, and in no event later than the Series A Preferred
Redemption Date, give such Tendering Series A Preferred Unit Holder written
notice of its election to deliver the Series A Preferred REIT Shares Amount,
and the Tendering Series A Preferred Unit Holder may elect to withdraw its
redemption request at any time prior to the acceptance of the cash or Series A
Preferred REIT Shares Amount by such Tendering Series A Preferred Unit Holder.
Assuming the Parent exercises its option to deliver the Series A Preferred REIT
Shares Amount, the Parent shall contribute the Tendered Series A Preferred
Units to the Parent Limited Partner. 
Upon Parent Limited Partner’s acquisition of the Series A Preferred
Units (including the certificates, if any, representing such Series A Preferred
Units), such Series A Preferred Units shall automatically be converted into a
number of OP Units equal to the number of REIT Shares issued by Parent in such
Series A Preferred Redemption.  In
addition, upon or subsequent to such conversion, the General Partner shall be
permitted to make adjustments to the Capital Accounts of the Partners in order
to prevent any differences in distributions among OP Units resulting from such
conversion.

C.                                     The Series A
Preferred REIT Shares Amount, if applicable, shall be delivered as duly
authorized, validly issued, fully paid and nonassessable REIT Shares and, if
applicable, free of any pledge, lien, encumbrance or restriction, other than
those provided in the Charter or the Bylaws of the Parent, the Securities Act,
relevant state securities or blue sky laws and any applicable registration
rights agreement with respect to such REIT Shares

 53
 

entered into by the Tendering Series A Preferred Unit Holder.
Notwithstanding any delay in such delivery (but subject to Section 16.4.E),
the Tendering Series A Preferred Unit Holder shall be deemed the owner of such
REIT Shares for all purposes, including without limitation, rights to vote or
consent, and receive dividends, as of the Series A Preferred Redemption Date.
In addition, the REIT Shares for which the Series A Preferred Units might be
exchanged shall also bear a legend which generally provides the following:

RESTRICTION
ON OWNERSHIP AND TRANSFER

THE SHARES OF CAPITAL STOCK REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE
OWNERSHIP AND TRANSFER FOR THE PURPOSE OF THE COMPANY’S MAINTENANCE OF ITS
STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”). SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND
EXCEPT AS EXPRESSLY PROVIDED IN THE COMPANY’S ARTICLES OF AMENDMENT AND
RESTATEMENT, (i) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF THE
COMPANY’S COMMON STOCK IN EXCESS OF [ • %] (BY VALUE OR BY NUMBER OF SHARES,
WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING COMMON STOCK OF THE COMPANY
OR SHARES OF THE COMPANY’S CAPITAL STOCK IN EXCESS OF [ • %] (BY VALUE OR BY
NUMBER OF SHARES, WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING CAPITAL
STOCK OF THE COMPANY; (ii) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN
SHARES OF CAPITAL STOCK THAT WOULD RESULT IN THE COMPANY BEING “CLOSELY HELD”
UNDER SECTION 856(h) OF THE CODE OR OTHERWISE CAUSE THE COMPANY TO FAIL TO
QUALIFY AS A REIT; AND (iii) NO PERSON MAY TRANSFER SHARES OF COMMON STOCK IF
SUCH TRANSFER WOULD RESULT IN THE COMMON STOCK OF THE COMPANY BEING OWNED BY
FEWER THAN 100 PERSONS. ANY PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY OWNS OR
ATTEMPTS TO BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK IN
VIOLATION OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE COMPANY. IF ANY
OF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP IS VIOLATED, THE SHARES OF CAPITAL
STOCK REPRESENTED HEREBY WILL BE AUTOMATICALLY TRANSFERRED TO THE TRUSTEE OF A
TRUST FOR THE BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES. IN ADDITION, THE
COMPANY MAY REDEEM SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD
OF DIRECTORS IN ITS SOLE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES THAT
OWNERSHIP OR A TRANSFER OR OTHER EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED
ABOVE. FURTHERMORE, UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED TRANSFERS
IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO. ALL
TERMS IN THIS LEGEND THAT ARE DEFINED IN THE ARTICLES OF AMENDMENT AND
RESTATEMENT OF THE COMPANY SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THE
ARTICLES OF AMENDMENT AND RESTATEMENT OF THE COMPANY, AS THE SAME MAY BE AMENDED
FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND
OWNERSHIP, WILL BE FURNISHED TO EACH HOLDER OF SHARES OF CAPITAL STOCK ON
REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE
SECRETARY OF THE COMPANY AT ITS PRINCIPAL OFFICE.

D.                                    Each
Holder of Series A Preferred Units covenants and agrees with the General
Partner that all Tendered Series A Preferred Units shall be delivered to the
General Partner and/or Parent free and clear of all liens, claims and
encumbrances whatsoever and should any such liens, claims and/or encumbrances
exist or arise with respect to such Tendered Series A Preferred Units, the
General Partner shall be under no obligation to acquire the same. Each Holder
of Series A Preferred Units further agrees that, in the event any state or
local property transfer tax is payable as a result of the transfer of its
Tendered Series A Preferred Units to the General Partner (or its designee),
such Holder of Series A Preferred Units shall assume and pay such transfer tax.

E.                                      Notwithstanding
the provisions of Section 16.4.A, 16.4.B, 16.4.C or any
other provision of this Agreement, a Holder of Series A Preferred Units (i)
shall not be entitled to effect a Series A Preferred Redemption for cash or an
exchange for REIT Shares to the extent the ownership or right to acquire REIT
Shares pursuant to such exchange by such Holder on the Series A Preferred
Redemption Date could cause such Holder or any other Person to violate the
restrictions on ownership and transfer of REIT Shares set forth in the Charter
of the Parent and (ii) shall have no rights under this Agreement to acquire
REIT Shares which would otherwise be prohibited under

 54
 

the Charter. To the extent any attempted Series A
Preferred Redemption or exchange for REIT Shares would be in violation of this Section
16.4.E, it shall be null and void ab
initio and such Holder of Series A Preferred Units shall not acquire
any rights or economic interest in the cash otherwise payable upon such Series
A Preferred Redemption or the REIT Shares otherwise issuable upon such
exchange.

F.                                      Notwithstanding
anything herein to the contrary (but subject to Section 16.4.E), with
respect to any Series A Preferred Redemption or exchange for REIT Shares
pursuant to this Section 16.4: (i) all Series A Preferred Units acquired
by the Parent Limited Partner pursuant thereto shall automatically, and without
further action required, be converted into and deemed to be OP Units comprised
of the same number of REIT Shares issued by Parent upon such Series A Preferred
Redemption; (ii) without the consent of the General Partner, each Holder of
Series A Preferred Units may not effect a Series A Preferred Redemption for
less than 1,000 Series A Preferred Units or, if the Series A Preferred Unit
Holder holds less than 1,000 Series A Preferred Units, all of the Series A
Preferred Units held by such Holder; (iii) without the consent of the General
Partner, each Series A Preferred Unit Holder may not effect a Series A
Preferred Redemption during the period after the Partnership Record Date with
respect to a distribution and before the record date established by the Parent
for a distribution to its stockholders of some or all of its portion of such
distribution; (iv) the consummation of any Series A Preferred Redemption or
exchange for REIT Shares shall be subject to the expiration or termination of
the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended; and (v) each Tendering Series A Preferred
Unit Holder shall continue to own all Series A Preferred Units subject to any
Series A Preferred Redemption or exchange for REIT Shares, and be treated as a
Holder of such Series A Preferred Units for all purposes of this Agreement,
until such Series A Preferred Units are transferred to the Parent Partner and
paid for or exchanged on the Series A Preferred Redemption Date. Until a Series
A Preferred Redemption Date, the Tendering Series A Preferred Unit Holder shall
have no rights as a stockholder of the Parent with respect to such Tendering
Series A Preferred Unit Holder’s Series A Preferred Units.

G.                                     In the event that
the Partnership issues additional Series A Preferred Units to any Additional
Limited Partner pursuant to Section 4.3, the General Partner shall make
such revisions to this Section 16.4 as it determines are necessary to
reflect the issuance of such additional Series A Preferred Units.

Section 16.5                            Ranking.  The Series A Preferred Units shall, with
respect to distribution rights and rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Partnership, rank senior to all
other Partnership Units.   So long as the
Series A Preferred Units remain issued and outstanding,  the Partnership shall not (A) authorize or
issue any securities having any preference as to or on parity with the dividend
or redemption rights, liquidation preferences, conversion rights, voting rights
or any other rights or privileges of the Series A Preferred Units, (B)
reclassify any Partnership Interests into interests having any preference as to
or on a parity with the dividend or redemption rights, liquidation preferences,
conversion rights, voting rights or any other rights or privileges of the
Series A Preferred Units, (C) authorize or issue any debt convertible into or
exchangeable for Partnership Interests having any preference as to or on parity
with the dividend or redemption rights, liquidation preferences, conversion
rights, voting rights or any other rights or privileges of the Series A Preferred
Units, or (D) amend or repeal any provision of, or add any provision to this
Agreement if such actions would alter or change the preferences, rights,
privileges or restrictions provided for the benefit of the Series A Preferred
Units.

Section 16.6                            Voting
Rights.  The General Partner is
expressly authorized to without the approval of the Holders of Series A
Preferred Units, cause the Partnership to issue additional Series A Preferred
Units in accordance with Section 4.3 hereof.

Section 16.7                            Transfer
Restrictions.  The Series A
Preferred Units shall not be transferable except in accordance with Section
11.3 and Section 3(g) of the Contribution Agreement.

Section 16.8                            No
Conversion Rights.  Except as
contemplated in Section 16.4, the Series A Preferred Units shall not be
convertible into any other class or series of interest in the Partnership.

Section 16.9                            No
Sinking Fund.  No sinking fund shall
be established for the retirement or redemption of Series A Preferred
Units.

 55
 

Section 16.10                     Article 8
Opt-In. The Partnership hereby irrevocably elects that all Series A
Preferred Units shall be “securities” governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Utah and each other applicable
jurisdiction.  The ownership of Series A
Preferred Units shall be evidenced by certificates.  Each certificate evidencing Series A
Preferred Units shall bear the following legend: “This certificate evidences an
interest in Extra Space Storage LP and shall be a security governed by Article
8 of the Uniform Commercial Code as in effect in the State of Utah and, to the
extent permitted by applicable law, each other applicable jurisdiction.” This
provision shall not be amended, and any purported amendment to this provision
shall not take effect, until all outstanding certificates evidencing Series A
Preferred Units have been surrendered for cancellation.

[the next page is the signature
page]

 56
 

IN WITNESS
WHEREOF, this Second Amended and Restated Agreement of Limited Partnership has
been executed as of the date first written above.

	
  

  	
  GENERAL PARTNER:

  
	
   

  	
   

  
	
   

  	
  ESS HOLDINGS
  BUSINESS TRUST I

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Charles L. Allen

  	
   

  
	
   

  	
   

  	
  Name: Charles L.
  Allen

  
	
   

  	
   

  	
  Title: Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LIMITED
  PARTNERS:

  
	
   

  	
   

  
	
   

  	
  ESS HOLDINGS BUSINESS
  TRUST II

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Charles L. Allen

  	
   

  
	
   

  	
   

  	
  Name: Charles L.
  Allen

  
	
   

  	
   

  	
  Title: Trustee

  
					

 

 57

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