Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption. (b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof. (c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b). (d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax. (e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 5 contracts
Sources: Agreement of Limited Partnership (Education Realty Trust, Inc.), Contribution Agreement (Education Realty Trust, Inc.), Merger Agreement (Education Realty Trust, Inc.)
Redemption Right. (a) Subject to Section 7.4(bSections 8.6(b) and Section 7.4(c)8.6(c) and on or after the Automatic Conversion Date (but in no event earlier than the twelve (12) month anniversary of the date hereof) or such date, and the provisions of if any, as expressly provided for in any agreements agreement entered into between the Partnership and one or more any Limited PartnersPartner, each Limited Partner (other than the Company) shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units (provided that such Partnership Units constitute Common Units) held by such Limited Partner at a redemption price per Unit equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the redemption right (the “Redeeming Partner”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the Company elects to purchase the Partnership Units subject to the Notice of Redemption pursuant to Section 8.6(b). A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units at any one time or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid on or after the Specified Redemption Date. Each Redeeming The Assignee of any Limited Partner agrees may exercise the rights of such Limited Partner pursuant to provide such representations and related indemnities regarding good and unencumbered titlethis Section 8.6, and such Limited Partner shall be deemed to execute have assigned such documents, as rights to such Assignee and shall be bound by the General Partner may reasonably require in exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Any Partnership Units redeemed by the Partnership pursuant to this Section 8.6(a) shall be cancelled upon such redemption.
(b) Notwithstanding the provisions of Section 7.4(a8.6(a), in the event a Limited Partner elects to exercise that exercises the Redemption Right, Right shall be deemed to have offered to sell the General Partner at Partnership Units described in the direction Notice of Redemption to the Company, directly or indirectly through one or more Affiliates, and the Company may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. If the Company shall elect to exercise its right to purchase Partnership Units under this Section 8.6(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five (5) Business Days after the receipt by it of such Notice of Redemption. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy purchase Partnership Units from the Redemption RightRedeeming Partner pursuant to this Section 8.6(b), neither the General Partner nor the Company itself shall not have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's ’s exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 7.4(b8.6(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's ’s exercise of the such Redemption Right, and each of the Redeeming Partner, the Partnership, Partnership and the Company shall treat the transaction between the Company and the Redeeming Partner Partner, for federal income tax purposes purposes, as a sale of the Redeeming Partner's Common ’s Partnership Units to the Company or its AffiliatesCompany. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If In case of any reclassification of the Redemption Right REIT Shares (including any reclassification upon a consolidation or merger in which the Company is satisfied by the delivery of continuing corporation) into securities other than REIT Common Shares, for purposes of this Section 8.6(b), the Redeeming Partner shall be deemed Company (or its Successor) may thereafter exercise its right to become purchase Partnership Units for the kind and amount of shares of such securities receivable upon such reclassification by a holder of the number of REIT Common Shares as of the close of business on the Specified Redemption Date or on for which such later date permitted by Units could be purchased pursuant to this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything immediately prior to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereofreclassification.
(c) Notwithstanding the provisions of Section 7.4(a8.6(a) and Section 7.4(b8.6(b), a Limited Partner shall not be entitled to receive REIT Common Shares if exercise the Redemption Right pursuant to Section 8.6(a) to the extent that the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b8.6(b) (regardless of whether or not the Company would in fact exercise its rights under Section 8.6(b)) would (i) be prohibited prohibited, as determined in the sole discretion of the Company, under the Articles of Incorporation or (ii) cause the acquisition of the Company, as amended or restated from time REIT Shares by such Partner to time. Without limiting the effect be “integrated” with any other distribution of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles for purposes of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance complying with the terms set forth in Section 7.4(a) or 7.4(b)Securities Act.
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 4 contracts
Sources: Agreement of Limited Partnership (NetSTREIT Corp.), Agreement of Limited Partnership (NetSTREIT Corp.), Agreement of Limited Partnership (NetSTREIT Corp.)
Redemption Right. (a) A. Subject to Section 7.4(b) Sections 8.6.B and Section 7.4(c)8.6.C hereof and on or after such date, and the provisions of if any, as expressly provided for in any agreements agreement entered into between the Partnership and one or more any Limited PartnersPartner, each Limited Partner (other than the Company) shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units (provided that such Partnership Units constitute Common Units) held by such Limited Partner at a redemption price per Unit equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the redemption right (the “Redeeming Partner. ”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the Company elects to purchase the Partnership Units subject to the Notice of Redemption pursuant to Section 8.6.B. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units at any one time or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid on or after the Specified Redemption Date. Each Redeeming The Assignee of any Limited Partner agrees may exercise the rights of such Limited Partner pursuant to provide such representations and related indemnities regarding good and unencumbered titlethis Section 8.6, and such Limited Partner shall be deemed to execute have assigned such documents, as rights to such Assignee and shall be bound by the General Partner may reasonably require in exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Any Partnership Units redeemed by the Partnership pursuant to this Section 8.6.A shall be cancelled upon such redemption.
(b) B. Notwithstanding the provisions of Section 7.4(a)8.6.A, in the event a Limited Partner elects to exercise that exercises the Redemption Right, Right shall be deemed to have offered to sell the General Partner at Partnership Units described in the direction Notice of Redemption to the Company, directly or indirectly through one or more Affiliates, and the Company may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. If the Company shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five (5) Business Days after the receipt by it of such Notice of Redemption. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy purchase Partnership Units from the Redemption RightRedeeming Partner pursuant to this Section 8.6.B, neither the General Partner nor the Company itself shall not have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's ’s exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 7.4(b)8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's ’s exercise of the such Redemption Right, and each of the Redeeming Partner, the Partnership, Partnership and the Company shall treat the transaction between the Company and the Redeeming Partner Partner, for federal income tax purposes purposes, as a sale of the Redeeming Partner's Common ’s Partnership Units to the Company or its AffiliatesCompany. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If In case of any reclassification of the Redemption Right REIT Shares (including, but not limited to, any reclassification upon a consolidation or merger in which the Company is satisfied by the delivery of continuing corporation) into securities other than REIT Common Shares, for purposes of this Section 8.6.B, the Redeeming Partner shall be deemed Company (or its Successor) may thereafter exercise its right to become purchase Partnership Units for the kind and amount of shares of such securities receivable upon such reclassification by a holder of the number of REIT Common Shares as of the close of business on the Specified Redemption Date or on for which such later date permitted by Units could be purchased pursuant to this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything immediately prior to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereofreclassification.
(c) C. Notwithstanding the provisions of Section 7.4(a) 8.6.A and Section 7.4(b)8.6.B, a Limited Partner shall not be entitled to receive REIT Common Shares if exercise the Redemption Right pursuant to Section 8.6.A to the extent that the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b8.6.B (regardless of whether or not the Company would in fact exercise its rights under Section 8.6.B) would (i) be prohibited under prohibited, as determined in the Articles of Incorporation sole discretion of the Company, as amended under the Declaration of Trust or restated from time (ii) cause the acquisition of REIT Shares by such Partner to time. Without limiting the effect be “integrated” with any other distribution of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles for purposes of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance complying with the terms set forth in Section 7.4(a) or 7.4(b)Securities Act.
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 4 contracts
Sources: Limited Partnership Agreement (Starwood Waypoint Residential Trust), Limited Partnership Agreement (Starwood Waypoint Residential Trust), Limited Partnership Agreement (PennyMac Mortgage Investment Trust)
Redemption Right. The Company shall be entitled, on any day (athe "Calculation Date") Subject on which the Closing Price (as defined below) of the Common Stock for ten (10) consecutive Trading Days (as defined below) is equal to Section 7.4(b) and Section 7.4(c)or greater than $4.50, and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner shall have the right to deliver a written notice (the "Redemption RightNotice") to require the Partnership Holder that the Company will redeem this Warrant (the "Redemption Date") at the Redemption Price (as defined below) provided, however, that the Company shall have such right if and only if (x) for a period of thirty (30) days prior to redeem on a Specified the Calculation Date and (y) at all times during such thirty (30) day period and continuing through the Redemption Date all or a portion Date, the Warrant Shares issuable upon exercise of the Common Partnership Units held Warrants are (i) authorized and reserved for issuance, (ii) registered for resale under the Securities Act of 1933, as amended, by such Limited Partner at a redemption price equal to the holder of this Warrant (or may otherwise be resold publicly without restriction) and in the form sales of the Cash Amount to Warrant Shares may be made continuously thereunder during such time periods, and (iii) listed for trading on each principal exchange or market on which the shares of Common Stock of the Company were then traded. The Redemption Price shall be paid by the PartnershipCompany to the Holder within two (2) business days of the Redemption Date. The Partnership "Redemption Price" shall have up equal the Closing Price (as defined below) on the Redemption Date less the Exercise Price, multiplied by the number of Warrants being redeemed hereunder. Nothing in this Section 1(b) shall prohibit exercise of the Warrant otherwise permitted pursuant to one (1) year the terms of this Warrant during the pendency of any Redemption Notice prior to the payment of the Redemption Price. "Trading Day" shall mean any day on which the Common Stock is traded for any period on the Over-the-Counter Bulletin Board (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming PartnerOTCBB"), or on the principal securities exchange or other securities market on which the Common Stock is then being traded. From and after the Specified Redemption Date"Closing Price," as of any date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) means the Company's annual dividend rate on REIT Common Shares last reported sale price for the prior twelve (12) month period, shares of Common Stock on the OTCBB as reported by Bloomberg Financial Markets or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full other similar reliable reporting service as designated by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership Holder (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a"Bloomberg"), or (ii) if the REIT OTCBB is not the principal trading market for the shares of Common Shares AmountStock, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), last reported sale price on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire principal trading market for the Common Partnership Units offered for redemption Stock as reported by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General PartnerBloomberg, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after if the Specified Redemption Date. If last reported sale price cannot be determined as of such shareholder approval is not obtaineddate on any of the foregoing bases, the Partnership Closing Price shall pay to be the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, fair market value as directed reasonably determined in good faith by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions Board of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors Directors of the Company or, at the option of a majority-in-interest of the holders of the outstanding Warrants, by an independent investment bank of nationally recognized standing in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation valuation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered businesses similar to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result business of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer taxcorporation.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 3 contracts
Sources: Warrant Agreement (Veridicom International Inc), Warrant Agreement (Veridicom International Inc), Warrant Agreement (Veridicom International Inc)
Redemption Right. (a) Subject to this Section 7.4(b) and Section 7.4(c), 8.5 and the provisions of any agreements between the Partnership and one or more Limited PartnersPartners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the "Redemption Right"terms and conditions set forth herein) to require the Partnership to redeem on (a Specified Redemption Date “Redemption”) all or a portion of the Common such Partnership Units held by such Limited Partner at (the “Tendered Units”) in exchange (a redemption price equal to and in the form of “Redemption Right”) for REIT Shares issuable on, or the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after payable on, the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full as determined by the PartnershipGeneral Partner in its sole discretion. The Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming PartnerLimited Partner exercising the Redemption Right (the “Tendering Party”). Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. A Limited Partner (other than the Special Limited Partner or the Adviser) may not exercise the Redemption Right for less than one thousand (1,000) Common 1,000 Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common 1,000 Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner The Tendering Party shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions foregoing, the Special Limited Partner and the Adviser shall have the right to require the Partnership to redeem all or a portion of their Class E Units at any time irrespective of the period the Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units of the Special Limited Partner or the Adviser for Class E REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units will be redeemed for an amount of Class E REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Class E Units.
(c) If the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to redeem Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 7.4(a8.5(c), in the event a Limited Partner elects to exercise the Redemption Rightwhich case, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash AmountGeneral Partner, acting as provided for in Section 7.4(a)a distinct legal entity, or shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption Right, and (ii) the REIT Common Shares Amountsuch transaction shall be treated, for federal income tax purposes, as elected a transfer by the Tendering Party of such Tendered Units to the General Partner, as directed Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Company Tendering Party for which the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to issue REIT Shares (rather than cash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the Partnership shall act in its sole a fair, equitable and absolute discretion)reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If the Partnership elects to redeem any number of Tendered Units for REIT Shares rather than cash, on the Specified Redemption Date, provided that the Company may defer payment Tendering Party shall sell such number of the Cash Amount until Tendered Units to the end General Partner in exchange for a number of REIT Shares equal to the product of the Payout Period described in Section 7.4(a) (in which case REIT Shares Amount and the Cash Amount shall bear interest as described in Section 7.4(a)), Applicable Percentage. The product of the Applicable Percentage and provided, further, that the Company mayREIT Shares Amount, if it has elected so to defer payment applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Cash Amount, further elect at any time before Aggregate Share Ownership Limit (as calculated in accordance with the end Articles of Incorporation) and other restrictions provided in the Payout Period to pay all or any portion Article of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such electionIncorporation, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes bylaws of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole Securities Act and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner relevant state securities or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right“blue sky” laws. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a8.5(a) and this Section 7.4(b8.5(c), a Limited Partner the Tendering Parties shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) have no rights under this Agreement that would otherwise be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b)Incorporation.
(d) Each Limited Partner covenants and agrees In connection with the General Partner that all Common Partnership Units delivered for redemption shall be delivered an exercise of Redemption Rights pursuant to the Partnershipthis Section 8.5, the Company or its Affiliates, as Tendering Party shall submit the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units following to the General Partner, Partnership in addition to the Notice of Redemption:
(1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(2) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date
(3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the written affidavit or representation required by Section 8.5(d)(1) or (2) after giving effect to the CompanyRedemption, such Limited neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(4) Any other documents as the General Partner shall assume and pay such transfer taxmay reasonably require.
(e) REIT Common Shares issued Any Cash Amount to be paid to a Tendering Party pursuant to this Section 7.4(b8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the General Partner to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount. Notwithstanding the foregoing, the General Partner agrees to use its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(f) may contain such legends regarding Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights to qualify prevent, among other things, (a) any person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the General Partner’s common stock from being owned by less than 100 persons, the General Partner from being “closely held” within the meaning of section 856(h) of the Code, and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the Partnership be treated as a REIT“publicly traded partnership” under section 7704 of the Code.
(g) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 3 contracts
Sources: Limited Partnership Agreement (Sculptor Diversified Real Estate Income Trust, Inc.), Limited Partnership Agreement (Sculptor Diversified Real Estate Income Trust, Inc.), Limited Partnership Agreement (Sculptor Diversified Real Estate Income Trust, Inc.)
Redemption Right. (a) Subject to this Section 7.4(b) and Section 7.4(c), 8.5 and the provisions of any agreements between the Partnership and one or more Limited PartnersPartners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year, shall have the right (subject to the "Redemption Right"terms and conditions set forth herein) to require the Partnership to redeem on (a Specified Redemption Date “Redemption”) all or a portion of the Common such Partnership Units held by such Limited Partner at (the “Tendered Units”) in exchange (a redemption price equal to and in the form of “Redemption Right”) for the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after payable on the Specified Redemption Date. Notwithstanding the foregoing, the Cash Amount (or portion thereof) due and payable General Partner shall have the right but not the obligation, in its sole discretion, to elect to acquire any Tendered Units in exchange for a Redeeming Partner with respect to such Redeeming Partner's exercise number of its Redemption Right shall bear interest at the rate REIT Shares equal to the lower amount of (i) the Company's annual dividend rate on such Tendered Units, in which case such REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid to the holder of such Tendered Units in full by lieu of the PartnershipCash Amount. The Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Limited Partner exercising the Redemption Right (the “Tendering Party”). Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for the Cash Amount or acquired for REIT Shares. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser shall have the right to require the Partnership to redeem all or a portion of their Class E Units pursuant to this Section 8.5 at any time irrespective of the period the Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units of the Special Limited Partner or the Adviser for the Cash Amount unless the Board of Directors of the General Partner determines that any such redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units will be redeemed for an amount of Class E REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Class E Units. No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner other than the Special Limited Partner and the Adviser may not exercise the Redemption Right for less than one thousand (1,000) Common 1,000 Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common 1,000 Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner The Tendering Party shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding If the provisions of General Partner elects to acquire Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 7.4(a8.5(b), in which case, (i) the event General Partner, acting as a Limited distinct legal entity, shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption Right, and (ii) such transaction shall be treated, for federal income tax purposes, as a transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to exercise issue REIT Shares (rather than cash) is referred to as the Redemption Right“Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner at the direction shall act in a fair, equitable and reasonable manner that neither prefers one group or class of the Company, directly Limited Partners over another nor discriminates against a group or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by class of Limited Partners. If the General Partner, as directed by the Company (in its sole and absolute discretion)Partner elects to acquire any number of Tendered Units for REIT Shares rather than cash, on the Specified Redemption Date, provided that the Company may defer payment Tendering Party shall sell such number of the Cash Amount until Tendered Units to the end General Partner in exchange for a number of REIT Shares equal to the product of the Payout Period described in Section 7.4(a) (in which case REIT Shares Amount and the Cash Amount shall bear interest as described in Section 7.4(a)), Applicable Percentage. The product of the Applicable Percentage and provided, further, that the Company mayREIT Shares Amount, if it has elected so to defer payment applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Cash Amount, further elect at any time before Aggregate Share Ownership Limit (as calculated in accordance with the end Articles of Incorporation) and other restrictions provided in the Payout Period to pay all or any portion Article of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such electionIncorporation, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes bylaws of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole Securities Act and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner relevant state securities or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right“blue sky” laws. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a8.5(a) and this Section 7.4(b8.5(b), a Limited Partner the Tendering Parties shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) have no rights under this Agreement that would otherwise be prohibited under the Articles of Incorporation Incorporation.
(c) In connection with an exercise of Redemption Rights pursuant to this Section 8.5, the CompanyTendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(A) a written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as amended or restated from time to time. Without limiting the effect determined for purposes of the preceding sentenceCode Sections 856(a)(6) and 856(h), no Person shall be permitted to receive of REIT Common Shares if as a result ofby (i) such Tendering Party and (ii) any Related Party and (b) representing that, and after giving effect toto the Redemption, such exercise neither the Tendering Party nor any Person would Beneficially Own Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(B) a written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date
(C) an undertaking to certify, at and as defined a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the Articles of Incorporation affidavit required by Section 8.5(c)(A) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the CompanyAggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(D) any other documents as amended or restated from time the General Partner may reasonably require.
(d) Any Cash Amount to time) more than 9.8% be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the General Partner to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the total number Cash Amount. Notwithstanding the foregoing, the General Partner agrees to use its best efforts to cause the closing of issued and outstanding the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, a holder of Partnership Units (i) shall not be entitled to effect a Redemption, whether for cash or an exchange for REIT Common Shares, unless waived to the extent the ownership of or right to acquire REIT Shares pursuant to such exchange by such Partner could cause such Partner or any other Person to violate the board Common Share Ownership Limit, the Aggregate Share Ownership Limit, or any Excepted Holder Limit, could cause the General Partner’s common stock to be owned by less than 100 persons, could cause the General Partner to be “closely held” within the meaning of directors section 856(h) of the Company in its sole discretionCode, or could cause the Partnership to constitute a “publicly traded partnership” under section 7704 of the Code 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 Redemption or exchange for REIT Common Shares would be a in violation of this Section 7.4(c8.5(e), it shall be null and void ab initio. The Cash Amount initio and such holder of OP Units shall be paid not acquire any rights or economic interest in the cash otherwise payable upon such instances, in accordance with Redemption or the terms set forth in Section 7.4(a) or 7.4(b)REIT Shares otherwise issuable upon such exchange.
(df) Each A redemption fee may be charged (other than to the Adviser, Special Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its their Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result connection with an exercise of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued Redemption Rights pursuant to this Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT8.5.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Apollo Realty Income Solutions, Inc.), Limited Partnership Agreement (Apollo Realty Income Solutions, Inc.)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c8.05(c), and on or after the provisions date that is one (1) year after the closing of any agreements between the Partnership and one or more Limited PartnersInitial Offering, each Class A Limited Partner (other than the General Partner and any Class B Limited Partner who becomes a Class A Limited Partner upon conversion of some or all of its Preferred Partnership Units) shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership General Partner by the Class A Limited Partner who is exercising the Redemption Right (with a copy the "Redeeming Partner"); provided, however, that no Class A Limited Partner may deliver to the General PartnerPartner more than two (2) by the Redeeming PartnerNotices of Redemption during each calendar year. A Class A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Common Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a8.05(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), Redemption Amount on the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, General Partner shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company Partner shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b)preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company General Partner shall treat the transaction between the Company General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming such Partner's Common Partnership Units to the Company or its AffiliatesGeneral Partner for federal income tax purposes. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If .
(c) The Partnership or the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash AmountGeneral Partner, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of shall pay the Cash Amount, as provided above, should the General Partner, as directed by the Company elect Amount to satisfy a Redemption Right by paying the Redeeming Partner as the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order Redemption Amount for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: Partner if (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery acquisition of REIT Common Shares to by such Partner on the Specified Redemption Date would (A) result in such Partner or such later date permitted by Section 7.4(b)any other person owning, as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation directly or indirectly, REIT Shares in excess of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own ("Ownership Limit," as defined in the Articles Declaration of Incorporation Trust and calculated in accordance therewith, except as provided in the Declaration of Trust, (B) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in the Declaration of Trust, (C) result in the Company being "closely held" within the meaning of Section 856(h) of the Code, (D) cause the Company to own, actually or constructively, 10% or more of the ownership interests in a tenant of the Company's or the Partnership's real property, as amended or restated from time to timewithin the meaning of Section 856(d)(2)(B) more than 9.8% of the total number Code, or (E) cause the acquisition of issued and outstanding REIT Common Shares, unless waived Shares by such Partner to be "integrated" with any other distribution of REIT Shares for purposes of complying with the board of directors registration provisions of the Company in its sole discretion. To Securities Act or (ii) the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) Partnership or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its AffiliatesPartner, as the case may be, free and clear so elects in its sole discretion. Any Cash Amount to be paid to a Redeeming Partner pursuant to this Section 8.05 shall be paid within sixty (60) days after the initial date of all liens and, notwithstanding anything herein contained receipt by the General Partner of the Notice of Redemption relating to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to be redeemed; provided, however, that such sixty (60) day period may be extended for up to an additional one hundred eighty (180) days to the extent required for the Company to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount. Notwithstanding the foregoing, the General PartnerPartner and the Partnership agree to use their best efforts to cause the closing of the acquisition of redeemed Common Partnership Units hereunder to occur as quickly as reasonably possible.
(d) Each certificate, if any, evidencing REIT Shares that may be issued in redemption of Common Partnership Units under this Section 8.05 shall bear a restrictive legend in substantially the following form: "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"), or any state securities law. No transfer of the Company, such Limited Partner Shares represented by this certificate shall assume and pay be valid or effective unless (A) such transfer taxis made pursuant to an effective registration statement under the Act or (B) the holder of the securities proposed to be transferred shall have delivered to the company either a no-action letter from the Securities and Exchange Commission or an opinion of counsel (who may be an employee of such holder) experienced in securities matters to the effect that such proposed transfer is exempt from the registration requirements of the Act which opinion shall be reasonably satisfactory to the company."
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as The redemption rights of each Class B Limited Partner and each Class B Limited Partner who becomes a Class A Limited Partner upon conversion of some or all of its Preferred Partnership Units are set forth in the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act separate Redemption and applicable state securities laws and (2) protect the ability Registration Rights Agreement of the Company to continue to qualify as a REITeven date herewith that is incorporated by reference into this Agreement.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Innkeepers Usa Trust/Fl), Limited Partnership Agreement (Innkeepers Usa Trust/Fl)
Redemption Right. (a) Subject to Section 7.4(b8.5(c) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners9.8, each Limited Partner who holds Common Partnership Units (including Limited Partners who have obtained Common Partnership Units through the exercise of conversion rights, if any, applicable to their Preferred Partnership Units), other than the General Partner, shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date to either (i) redeem all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until to exchange all or a portion of the Cash Amount (or portion thereof) shall be paid in full Common Partnership Units held by such Limited Partner for REIT Shares at a ratio equal to the PartnershipConversion Factor. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership General Partner by the Limited Partner who is exercising the Redemption Right (with a copy the "Redeeming Partner"), provided that no more than two (2) Notices of Redemption from any single Limited Partner may be delivered to the General Partner) by the Redeeming PartnerPartner during each calendar year. A No such Limited Partner may not exercise the Redemption Right for less than one thousand five hundred (1,000500) Common Partnership Units or, if such Limited Partner holds less than one thousand five hundred (1,000500) Common Partnership Units, less than all of the Common Partnership Units held by such Limited Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Common Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees Notwithstanding the preceding sentence to provide such representations and related indemnities regarding good and unencumbered titlethe contrary, and to execute such documents, as if the Partnership or the General Partner may reasonably require in connection elects under Section 8.5(c) to extend the payment date for the Cash Amount, then to the extent a Partnership Record Date occurs between the Specified Redemption Date and the date such Cash Amount is paid, the Redeeming Partner shall receive the distribution relating to such Partnership Record Date with any redemptionrespect to such Common Partnership Units being redeemed.
(b) Notwithstanding the provisions of Section 7.4(a8.5(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), Redemption Amount on the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, General Partner shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company Partner shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b)preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company General Partner shall treat the transaction between the Company General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its AffiliatesGeneral Partner for federal income tax purposes. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents and take such other actions as the Company General Partner may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (The Partnership or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its AffiliatesPartner, as the case may be, free shall pay the Cash Amount to a Redeeming Partner as the Redemption Amount for such Limited Partner if:
(i) the acquisition of REIT Shares by such Limited Partner on the Specified Redemption Date would (A) result in such Limited Partner or any other person owning, directly or indirectly REIT Shares in excess of the "Ownership Limit," as defined in the Articles of Incorporation, (B) result in REIT Shares being owned by fewer than one hundred (100) persons (determined as provided by Section 856(a)(5) of the Code), except as provided in the Articles of Incorporation, (C) result in the General Partner being "closely held" within the meaning of Section 856(h) of the Code, (D) cause the Company to own, directly or constructively, ten percent (10%) or more of the ownership interests in a tenant of the Company's or the Partnership's real property, within the meaning of Section 856(d)(2)(B) of the Code, or (E) cause the acquisition of REIT Shares by such Partner to be "integrated" with any other distribution of REIT Shares or other securities of the Company for purposes of complying with the registration provisions of the Securities Act;
(ii) there is not an effective registration statement on file with the Commission covering the Redemption Shares to be issued upon the redemption of the Partnership Units described in the Notice of Redemption for such Redeeming Partner (a) as of the Specified Redemption Date, if the Cash Amount is less than the Threshold Cash Amount, and clear (b) within 45 days of all liens andthe Specified Redemption Date (and if such date is not a Business Day, notwithstanding anything herein contained to then the contrary, neither next Business Day) if the Cash Amount is more than the Threshold Cash Amount; or
(iii) the Partnership or the General Partner, as the Company case may be, so elects in its sole discretion. Any Cash Amount to be paid to a Redeeming Partner pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that if the Cash Amount to be paid to all Limited Partners who have sent a Notice of Redemption during the period from the date of receipt of the initial Notice of Redemption triggering a Specified Redemption Date and such Specified Redemption Date exceeds $500,000 (nor any the "Threshold Cash Amount"), then such payment date may be extended for up to an additional one hundred eighty (180) days to the extent required for the General Partner to cause additional REIT Shares to be issued to provide financing to be used to make such payment of its Affiliates) nor the Cash Amount. Notwithstanding the foregoing, the General Partner and the Partnership shall be under any obligation agree to acquire Common use their best efforts to cause the closing of the acquisition of redeemed Partnership Units which are or may be subject hereunder to any liens. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable occur as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer taxquickly as reasonably possible without incurring unreasonable expense.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 2 contracts
Sources: Merger Agreement (Westbrook Real Estate Partners LLC), Merger Agreement (Alter Robert A)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner, other than Ashford Prime OP Limited Partner LLC, shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner (the “Redeeming Partner”) at a redemption price per Common Partnership Unit equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after on the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption DateDate except as provided in Section 7.4(b). Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event if a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that if the Company may defer payment of General Partner has not affirmatively notified the Redeeming Partner on or before one Business Day before the Specified Redemption Date that either the Partnership, the General Partner or its Affiliates will pay the Cash Amount until then the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount General Partner shall bear interest as described in Section 7.4(a))be deemed to have elected, and provideddirectly or through one or more Affiliates, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal Amount to the Redeeming Partner on the Specified Redemption Date, and the Company agrees that it will provide such portion REIT Common Shares on the Specified Redemption Date, subject to the other provisions of the Cash Amount plus any accrued but unpaid interest thereonthis Section 7.4. On any such electionelection of the General Partner to assume and satisfy a Redemption Right, the Company, directly or indirectly through one or more of its Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, or unless the General Partner has been deemed to assume the Redemption Right as provided in this Section 7.4(b), neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's ’s exercise of the Redemption Right. In the event If the General Partner, as directed by the Company Company, shall exercise its right right, or shall be deemed to have elected, to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), except as provided in the following paragraph, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's ’s exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's ’s Common Partnership Units to the Company or its Affiliates; provided that if the Redeeming Partner is redeeming all of its Common Partnership Units, the Partnership shall redeem any fractional Common Partnership Unit (constituting less than one Common Partnership Unit) owned by the Redeeming Partner by paying the Cash Amount with respect to such fractional Common Partnership Unit to such Redeeming Partner. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash AmountShares, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash AmountRedemption Right, as provided above, should the General Partner, as directed by the Company elect elect, or be deemed to elect, to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder stockholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder stockholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder stockholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay . If such Redeeming Partner the Cash Amount; or (iii) stockholder approval is not obtained within one hundred and thirty (130) days after such Common Partnership Units are presented for redemption or the stockholders have voted against the issuance of the REIT Common Shares and payment of the REIT Common Shares, the Partnership will distribute to the Redeeming Partner any distributions pursuant to Section 8.1 that were not made after the Specified Redemption Date. If such shareholder approval is not obtainedDate with respect to the Common Partnership Units redeemed because of the provisions of Section 7.4(a), the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end earlier of what (i) ten (10) days after stockholders have voted against the Payout Period would have been had the General Partner, as directed by the Company not elected to pay issuance of the REIT Common Share Amount upon the Shares, or (ii) one hundred and thirty (130) days after such Common Partnership Units are presented for redemption, together with interest on such Cash Amount as specified in Section 7.4(afrom the Specified Redemption Date to the date of payment at the rate equal to the lesser of (i) hereofthe Company’s annual dividend rate on REIT Common Shares for the twelve (12) month period prior to the Valuation Date and based upon the Cash Amount for Common Partnership Units redeemed, or (ii) eight percent (8%).
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall shall, to the fullest extent permitted by law, be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or Section 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event if any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 2 contracts
Sources: Agreement of Limited Partnership (Ashford Hospitality Trust Inc), Agreement of Limited Partnership (Ashford Hospitality Trust Inc)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner Partner, other than Ashford OP Limited Partner, LLC, shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "“Payout Period"”) following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "“Redeeming Partner"”). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's ’s exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's ’s annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's ’s exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's ’s exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's ’s Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Datesuch Common Partnership Units are presented for redemption. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Ashford Hospitality Trust Inc), Limited Partnership Agreement (Ashford Hospitality Trust Inc)
Redemption Right. (a) Subject to Section 7.4(b8.04(c) and Section 7.4(c), and the provisions of any agreements agreement between the Partnership and one or more Limited Partners, beginning on the date that is twelve months after the date of issuance of any Common Units (including any Common Units that are issued upon the conversion of LTIP Units), each Limited Partner (other than the General Partner, Parent REIT or any Subsidiary of the General Partner or Parent REIT) shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner Partner’s Common Units at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to Parent REIT) by the Limited Partner who is exercising the Redemption Right (the “Redeeming Limited Partner”), and such notice shall be irrevocable unless otherwise agreed upon by the General Partner. In such event, the Partnership shall deliver the Cash Amount to the Redeeming Limited Partner. Notwithstanding the foregoing, the Partnership shall not be obligated to satisfy such Redemption Right if Parent REIT elects to purchase the Common Units subject to the Notice of Redemption pursuant to Section 8.04(b) hereof. No Limited Partner may deliver more than one Notice of Redemption during each calendar quarter unless otherwise agreed upon by the Redeeming General Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Limited Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Common Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a)8.04(a) hereof, in the event if a Limited Partner elects to exercise exercises the Redemption RightRight by delivering to the Partnership a Notice of Redemption, then the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, Partnership may, in its sole and absolute discretion, elect to assume cause Parent REIT to purchase directly and satisfy a Redemption Right acquire some or all of, and in such event Parent REIT agrees to purchase and acquire, such Common Units by paying to the Redeeming Limited Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company Partner (in its sole and absolute discretion), ) on the Specified Specific Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with whereupon Parent REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered tendered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless In the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership event Parent REIT purchases Common Units with respect to the Redeeming Partner's exercise of the a Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner's ’s exercise of the such Redemption Right, and each of the Redeeming Limited Partner, the Partnership, Partnership and the Company Parent REIT shall treat the transaction between the Company Parent REIT and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner's ’s Common Partnership Units to the Company or its AffiliatesParent REIT for federal income tax purposes. Each Redeeming Limited Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company Parent REIT may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(aSections 8.04(a) and Section 7.4(b)8.04(b) hereof, a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if the delivery of REIT Common Shares to such Limited Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company Parent REIT pursuant to Section 7.4(b8.04(b) hereof (regardless of whether or not Parent REIT would in fact exercise its rights under Section 8.04(b)) would be prohibited under the Articles of Incorporation of the Company, as amended (i) result in such Limited Partner or restated from time to time. Without limiting the effect of the preceding sentence, no any other Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation Charter) owning, directly or indirectly, REIT Shares in excess of the CompanyStock Ownership Limit or any Excepted Holder Limit (each as defined in the Charter) and calculated in accordance therewith, except as amended or restated from time provided in the Charter, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to timeany rules of attribution), (iii) more than 9.8% result in Parent REIT being “closely held” within the meaning of Section 856(h) of the total number of issued and outstanding Code, (iv) cause Parent REIT Common Sharesto own, unless waived by the board of directors actually or constructively, 10% or more of the Company ownership interests in a tenant (other than a TRS) of Parent REIT’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause Parent REIT to fail to qualify as a REIT under the Code, or (vi) cause the acquisition of REIT Shares by such Limited Partner to be “integrated” with any other distribution of REIT Shares or Common Units for purposes of complying with the registration provisions of the Securities Act. Parent REIT, in its sole and absolute discretion. To , may waive the extent any attempted restriction on redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in this Section 7.4(a) or 7.4(b8.04(c).
(d) Each Redeeming Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered tendered for redemption shall pursuant to this Section 8.04 will be delivered to the Partnership, the Company Partnership or its Affiliates, as the case may be, Parent REIT free and clear of all liens andliens, notwithstanding anything herein contained claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to the contrarysuch Common Units, neither the General Partner, the Company (Partnership nor any of its Affiliates) nor the Partnership Parent REIT shall be under any obligation to acquire such Common Partnership Units which are pursuant to Section 8.04(a) or may be subject to any liensSection 8.04(b) hereof. Each Redeeming Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the CompanyParent REIT, such Redeeming Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued Any Cash Amount to be paid to a Redeeming Limited Partner pursuant to this Section 7.4(b8.04 shall be paid on the Specified Redemption Date; provided that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for Parent REIT to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Shares Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, Parent REIT agrees to use its commercially reasonable efforts to cause the closing of the acquisition of redeemed Common Units hereunder to occur as quickly as reasonably possible.
(f) may contain such legends regarding restrictions on transfer as Notwithstanding any other provision of this Agreement, the Company in good faith General Partner is authorized to take any action that it determines to be necessary or advisable in order appropriate to (1) cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Redeeming Limited Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership, Parent REIT or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units, and such Redeeming Limited Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(g) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights as and if deemed necessary or reasonable to qualify ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the Partnership being treated as a REIT“publicly traded partnership” under Section 7704 of the Code.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Alpine Income Property Trust, Inc.), Limited Partnership Agreement (Alpine Income Property Trust, Inc.)
Redemption Right. (a) Subject to this Section 7.4(b) and Section 7.4(c), 8.5 and the provisions of any agreements between the Partnership and one or more Limited PartnersPartners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the "Redemption Right"terms and conditions set forth herein) to require the Partnership to redeem on (a Specified Redemption Date “Redemption”) all or a portion of the Common such Partnership Units held by such Limited Partner at (the “Tendered Units”) in exchange (a redemption price equal to and in the form of “Redemption Right”) for REIT Shares issuable on, or the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after payable on, the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full as determined by the PartnershipGeneral Partner in its sole discretion. The Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming PartnerLimited Partner exercising the Redemption Right (the “Tendering Party”). Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. A Limited Partner (other than the Special Limited Partner or the Adviser) may not exercise the Redemption Right for less than one thousand (1,000) Common 1,000 Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common 1,000 Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner The Tendering Party shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions foregoing, the Special Limited Partner, the Adviser and its Affiliates and officers and employees of the Advisor and its Affiliates shall have the right to require the Partnership to redeem all or a portion of their respective Class E Units pursuant to this Section 7.4(a8.5 at any time irrespective of the period the Partnership Units have been held by them, subject to any separate lock-up restrictions with respect to the Sponsor Committed Amount. The Partnership shall redeem any such Class E Units of the Special Limited Partner, the Adviser and its Affiliates and officers and employees of the Adviser and its Affiliates for Class E REIT Shares or the Cash Amount (at such Person’s election) unless the Board of Directors of the General Partner determines that any such redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units will be redeemed for an amount of Class E REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Class E Units.
(c) If the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to redeem Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in the event a Limited Partner elects to exercise the Redemption Rightwhich case, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash AmountGeneral Partner, acting as provided for in Section 7.4(a)a distinct legal entity, or shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption Right, and (ii) the REIT Common Shares Amountsuch transaction shall be treated, for federal income tax purposes, as elected a transfer by the Tendering Party of such Tendered Units to the General Partner, as directed Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Company Tendering Party for which the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to issue REIT Shares (rather than cash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the Partnership shall act in its sole a fair, equitable and absolute discretion)reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If the Partnership elects to redeem any number of Tendered Units for REIT Shares rather than cash, on the Specified Redemption Date, provided that the Company may defer payment Tendering Party shall sell such number of the Cash Amount until Tendered Units to the end General Partner in exchange for a number of REIT Shares equal to the product of the Payout Period described in Section 7.4(a) (in which case REIT Shares Amount and the Cash Amount shall bear interest as described in Section 7.4(a)), Applicable Percentage. The product of the Applicable Percentage and provided, further, that the Company mayREIT Shares Amount, if it has elected so to defer payment applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Cash Amount, further elect at any time before Aggregate Share Ownership Limit (as calculated in accordance with the end Articles of Incorporation) and other restrictions provided in the Payout Period to pay all or any portion Article of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such electionIncorporation, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes bylaws of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole Securities Act and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner relevant state securities or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right“blue sky” laws. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a8.5(a) and this Section 7.4(b8.5(c), a Limited Partner the Tendering Parties shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) have no rights under this Agreement that would otherwise be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b)Incorporation.
(d) Each Limited Partner covenants and agrees In connection with the General Partner that all Common Partnership Units delivered for redemption shall be delivered an exercise of Redemption Rights pursuant to the Partnershipthis Section 8.5, the Company or its Affiliates, as Tendering Party shall submit the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units following to the General Partner, Partnership in addition to the Notice of Redemption:
(1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(2) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date
(3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the written affidavit or representation required by Section 8.5(d)(1) or (2) after giving effect to the CompanyRedemption, such Limited neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(4) Any other documents as the General Partner shall assume and pay such transfer taxmay reasonably require.
(e) REIT Common Shares issued Any Cash Amount to be paid to a Tendering Party pursuant to this Section 7.4(b8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the General Partner to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount. Notwithstanding the foregoing, the General Partner agrees to use its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(f) may contain such legends regarding Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights to qualify prevent, among other things, (a) any person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the General Partner’s common stock from being owned by less than 100 persons, the General Partner from being “closely held” within the meaning of section 856(h) of the Code, and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the Partnership be treated as a REIT“publicly traded partnership” under section 7704 of the Code.
(g) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Sources: Limited Partnership Agreement (EQT Exeter Real Estate Income Trust, Inc.), Limited Partnership Agreement (EQT Exeter Real Estate Income Trust Inc.)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 2 contracts
Sources: Contract of Sale (Education Realty Trust, Inc.), Contract of Sale/Contribution (Education Realty Trust, Inc.)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner Partner, other than Ashford OP Limited Partner, LLC, shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Datesuch Common Partnership Units are presented for redemption. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Ashford Hospitality Trust Inc), Limited Partnership Agreement (Ashford Hospitality Trust Inc)
Redemption Right. (a) Subject to this Section 7.4(b) and Section 7.4(c), 8.5 and the provisions of any agreements between the Partnership and one or more Limited PartnersPartners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the "Redemption Right"terms and conditions set forth herein) to require the Partnership to redeem on (a Specified Redemption Date “Redemption”) all or a portion of the Common such Partnership Units held by such Limited Partner at a redemption price equal to and (the “Tendered Units”) in the form of exchange for REIT Shares issuable on, or the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after payable on, the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full as determined by the PartnershipGeneral Partner in its sole discretion (a “Redemption Right”). The Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Limited Partner exercising the Redemption Right (the “Tendering Party”). Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Advisor (or in the case of the Partnership Units received in consideration for management fees or the Performance Allocation, the assignees of the Special Limited Partner or the Advisor) shall have the right to require the Partnership to redeem all or a portion of their Class P Units, Class I Units, or other Partnership Units, as applicable, pursuant to this Section 8.5 at any time irrespective of the period the Partnership Units have been held by the Special Limited Partner or the Adviser or their respective assignees. The Partnership shall redeem any such Partnership Units of the Special Limited Partner or the Advisor for equivalent class REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such redemption for cash would be prohibited by applicable law or this Agreement, in which case such Partnership Units will be redeemed for an amount of the equivalent class REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). Notwithstanding the foregoing, the redemption of any Partnership Units by the Special Limited Partner or its assignee received in connection with the Performance Allocation will be subject to the limits set forth in the General Partner’s share repurchase plan as if such Partnership Units were REIT Shares; provided that such Partnership Units will not be subject to the Early Repurchase Deduction (as defined therein). A Limited Partner other than the Special Limited Partner and the Advisor may not exercise the Redemption Right for less than one thousand (1,000) Common 1,000 Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common 1,000 Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner The Tendering Party shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding If the provisions of General Partner (or, if applicable, the Advisor or Special Limited Partner) elects to redeem Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 7.4(a8.5(b), in the event a Limited Partner elects to exercise the Redemption Rightwhich case, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash AmountGeneral Partner, acting as provided for in Section 7.4(a)a distinct legal entity, or shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption Right, and (ii) the REIT Common Shares Amountsuch transaction shall be treated, for federal income tax purposes, as elected a transfer by the Tendering Party of such Tendered Units to the General Partner, as directed Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Company Tendering Party for which the General Partner (or, if applicable, the Advisor or Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the Partnership shall act in its sole a fair, equitable and absolute discretion)reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If the Partnership elects to redeem any number of Tendered Units for REIT Shares rather than Cash Amount, on the Specified Redemption Date, provided that the Company may defer payment Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (A) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (B) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (A) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (B) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount until to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and Specified Redemption Date; provided, furtherhowever, that the Company may, if it has elected so General Partner may elect to defer cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, further elect at any time before by causing additional REIT Shares to be issued or otherwise. Notwithstanding the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such electionforegoing, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor agrees to use its commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (i) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (ii) the REIT Shares from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (iii) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (iv) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (v) the violation of the Securities Act or other comparable state law, (vi) the registration of the Partnership as an investment company under the Investment Company itself shall have any obligation to Act, (vii) the Redeeming registration of the Partnership, the General Partner or to any Affiliate thereof (that is not already registered as an investment adviser under the Partnership with respect to Advisers Act) as an investment adviser under the Redeeming Partner's exercise Advisers Act, (viii) the termination of the Redemption Right. In Partnership’s status as a partnership for tax purposes, (ix) the event the General Partnerviolation of any law, as directed rule, regulation by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Limited Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (x) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that all Common imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units delivered for redemption Units, which notice shall be delivered accompanied by a copy of an opinion of counsel to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees states that, in the event any state or local property transfer tax is payable opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer taxapplicable.
(ef) REIT Common Shares issued A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) in connection with an exercise of Redemption Rights pursuant to this Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT8.5.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Cohen & Steers Income Opportunities REIT, Inc.), Limited Partnership Agreement (Cohen & Steers Income Opportunities REIT, Inc.)
Redemption Right. (a) Subject to Section 7.4(b8.04(c) and Section 7.4(c), and the provisions of any agreements agreement between the Partnership and one or more Limited Partners, beginning on the date that is eighteen months after the date of issuance of any Common Units (treating any Common Units that are issued upon the conversion of LTIP Units as having been issued when the LTIP Units into which they were converted were issued), each Limited Partner (other than GIP REIT or any Subsidiary of GIP REIT) shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner Partner’s Common Units at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to the General PartnerPartner ) by the Redeeming Limited Partner who is exercising the Redemption Right (the “Tendering Party”), and such notice shall be irrevocable unless otherwise agreed upon by the General Partner. No Limited Partner may deliver more than one Notice of Redemption during each calendar quarter unless otherwise agreed upon by the General Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Limited Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner The Tendering Party shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Common Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a)8.04(a) hereof, in the event if a Limited Partner elects to exercise exercises the Redemption RightRight by delivering to the Partnership a Notice of Redemption, then the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume cause GIP REIT to purchase directly and satisfy a Redemption Right acquire some or all of, and in such event GIP REIT agrees to purchase and acquire, such Common Units by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) Tendering Party the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with whereupon GIP REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered tendered for redemption by the Redeeming Partner Tendering Party and GIP REIT shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company GIP REIT shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b)preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Partner Tendering Party with respect to such Redeeming Partner's Tendering Party’s exercise of the Redemption Right, and each of the Redeeming PartnerTendering Party, the Partnership, Partnership and the Company GIP REIT shall treat the transaction between the Company GIP REIT and the Redeeming Partner for federal income tax purposes Tendering Party as a sale of the Redeeming Partner's Tendering Party’s Common Partnership Units to the Company or its AffiliatesGIP REIT for federal income tax purposes. Each Redeeming Partner Tendering Party agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company GIP REIT may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(aSections 8.04(a) and Section 7.4(b)8.04(b) hereof, a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if the delivery of REIT Common Shares to such Limited Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company GIP REIT pursuant to Section 7.4(b8.04(b) hereof (regardless of whether or not GIP REIT would in fact exercise its rights under Section 8.04(b)) would be prohibited under the Articles of Incorporation of the Company, as amended (i) result in such Limited Partner or restated from time to time. Without limiting the effect of the preceding sentence, no any other Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation Articles) owning, directly or indirectly, REIT Shares in excess of the CompanyAggregate Share Ownership Limit or any Excepted Holder Limit (each as defined in Articles) and calculated in accordance therewith, except as amended or restated from time provided in the Articles, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to timeany rules of attribution), (iii) more than 9.8% result in GIP REIT being “closely held” within the meaning of Section 856(h) of the total number of issued and outstanding Code, (iv) cause GIP REIT Common Sharesto own, unless waived by the board of directors actually or constructively, 10% or more of the Company ownership interests in a tenant (other than a TRS) of GIP REIT’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause GIP REIT to fail to qualify as a REIT under the Code, or (vi) cause the acquisition of REIT Shares by such Limited Partner to be “integrated” with any other distribution of REIT Shares or Common Units for purposes of complying with the registration provisions of the Securities Act. GIP REIT, in its sole and absolute discretion. To , may waive the extent any attempted restriction on redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in this Section 7.4(a) or 7.4(b8.04(c).
(d) Each Limited Partner Tendering Party covenants and agrees with the General Partner that all Common Partnership Units delivered tendered for redemption shall pursuant to this Section 8.04 will be delivered to the Partnership, the Company Partnership or its Affiliates, as the case may be, GIP REIT free and clear of all liens andliens, notwithstanding anything herein contained claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to the contrarysuch Common Units, neither the General Partner, the Company (Partnership nor any of its Affiliates) nor the Partnership GIP REIT shall be under any obligation to acquire such Common Partnership Units which are pursuant to Section 8.04(a) or may be subject to any liensSection 8.04(b) hereof. Each Limited Partner Tendering Party further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the CompanyGIP REIT, such Limited Partner Tendering Party shall assume and pay such transfer tax.
(e) REIT Common Shares issued Any Cash Amount to be paid to a Tendering Party pursuant to this Section 7.4(b8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the General Partner to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Share Amount to be paid to a Tendering Party pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, the General Partner agrees to use its commercially reasonable efforts to cause the closing of the acquisition of redeemed Common Units hereunder to occur as quickly as reasonably possible.
(f) may contain such legends regarding restrictions on transfer as Notwithstanding any other provision of this Agreement, the Company in good faith General Partner is authorized to take any action that it determines to be necessary or advisable in order appropriate to (1) cause the General Partner and the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Tendering Party’s exercise of the Redemption Right. If a Tendering Party believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Tendering Party must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership, GIP REIT or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Tendering Party’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Tendering Party in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Tendering Party shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Tendering Party in redemption of its Common Units, and such Tendering Party shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(g) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights as and if deemed necessary or reasonable to qualify ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to prevent the Partnership from being treated as a REIT“publicly traded partnership” under Section 7704 of the Code.
(h) A redemption fee may be charged in connection with an exercise of Redemption Rights pursuant to this Section 8.04.
Appears in 1 contract
Sources: Limited Partnership Agreement (Generation Income Properties, Inc.)
Redemption Right. (a) Subject to Section 7.4(bSections 8.04(b), 8.04(c), 8.04(d), 8.04(e) and Section 7.4(c8.04(f), and the provisions of any agreements between the Partnership and one or more Limited PartnersPartners with respect to Partnership Units held by them and any restriction agreed to in writing between the Redeeming Limited Partner and the General Partner, each Limited Partner Partner, other than the General Partner, shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units that have been held by such Limited Partner for at least one year (or such lesser time as determined by the General Partner in its sole and absolute discretion) at a redemption price equal to and in the form of the Cash Redemption Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption (a form of which as attached as Exhibit C) delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the "Redeeming Limited Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Partnership Units subject to the Notice of Redemption; and provided, further, that no Limited Partner may deliver more than two Notices of Redemption during each calendar year. A Without the consent of the General Partner, a Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common 1,000 Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common 1,000 Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a8.04(a), in the event a Limited Partner elects to exercise that exercises the Redemption RightRight shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the General Partner, and the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Limited Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company Partner (in its sole and absolute discretion), on the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, General Partner shall acquire the Common Partnership Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless If the General Partner, as directed by the Company (in its sole and absolute discretion), Partner shall elect to exercise its right to assume directly and satisfy purchase Partnership Units under this Section 8.04(b) with respect to a Notice of Redemption, it shall so notify the Redemption Right, neither Redeeming Limited Partner within five Business Days after the receipt by the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Rightsuch Notice of Redemption. In the event the General Partner, as directed by the Company Partner shall exercise its right to satisfy purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 7.4(b)Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner's exercise of the such Redemption Right, and each of the Redeeming Limited Partner, the Partnership, and the Company General Partner shall treat the transaction between the Company General Partner and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner's Common Partnership Units to the Company or its AffiliatesGeneral Partner. Each Redeeming Limited Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company General Partner may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a8.04(a) and Section 7.4(b8.04(b), a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company General Partner pursuant to Section 7.4(b8.04(b) (regardless of whether or not the General Partner would in fact exercise its rights under Section 8.04(b)) would be prohibited (i) result in such Partner or any other person owning, directly or indirectly or under the Articles applicable attribution rules, REIT Shares in excess of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own Share Ownership Limitation (as defined in the Articles Declaration of Incorporation Trust) and calculated in accordance therewith, except as provided in the Declaration of Trust, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), (iii) result in the General Partner being "closely held" within the meaning of Section 856(h) of the CompanyCode, as amended (iv) cause the General Partner to own, directly or restated from time to time) under the applicable constructive ownership rules, 10% or more than 9.8% of the total number of issued and outstanding REIT Common Sharesownership interests, unless waived by the board of directors value or vote, in a tenant of the Company in its sole discretion. To General Partner's, the extent Partnership's or a Subsidiary Partnership's real property, within the meaning of Section 856(d)(2)(B) of the Code, other than a "taxable REIT subsidiary" of the General Partner within the meaning of Section 856(l) of the Code, provided that rents from such taxable REIT subsidiary qualify under Section 856(d)(8) of the Code, or (v) be likely to cause the acquisition of REIT Shares by such Partner to be "integrated" with any attempted redemption other distribution of REIT Shares or Partnership Units for REIT Common Shares would be a violation purposes of this Section 7.4(c), it shall be null and void ab initiocomplying with the registration provisions of the Securities Act. The Cash Amount shall be paid in such instances, in accordance with General Partner may waive the terms restriction on redemption set forth in this Section 7.4(a8.04(c) upon the receipt of a ruling from the Internal Revenue Service or an opinion of counsel or other evidence satisfactory to the General Partner confirming that the increased ownership of REIT Shares pursuant to the waiver will not result in the General Partner being "closely held" within the meaning of section 856(h) of the Code or cause any person or group of persons to own directly or indirectly 10 percent or more, within the meaning of section 856(d)(2)(B)(i) or 7.4(b)(ii) of the Code, of any tenant of the General Partner (other than a "taxable REIT subsidiary," as defined in section 856(l) of the Code, if the requirements of section 856(d)(8) of the Code are satisfied) from whom the General Partner anticipates deriving more than $200,000 in gross income during the current taxable year.
(d) Each Any Cash Amount to be paid to a Redeeming Limited Partner covenants and agrees with pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner that all Common may elect to cause the Specified Redemption Date to be delayed for up to an additional 90 days to the extent required for the General Partner to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount. Notwithstanding the foregoing, the General Partner agrees to use its best efforts to cause the closing of the acquisition of redeemed Partnership Units delivered for redemption shall be delivered hereunder to the Partnership, the Company or its Affiliates, occur as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable quickly as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer taxreasonably possible.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Limited Partnership Agreement (First Potomac Realty Trust)
Redemption Right. (a) Subject to Section 7.4(bAt any time on and after the fifth (5th) and Section 7.4(canniversary of the Original Issue Date (the “Optional Redemption Date”), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner holder shall have the right (the "“Redemption Right"”) to require the Partnership Company to redeem on a Specified Redemption Date for cash any or all or a portion of the Common Partnership Units held by shares of Series A Preferred Stock (including, for the avoidance of doubt, outstanding shares of Series A Preferred Stock paid to such Limited Partner holders as PIK Dividends) of such holder outstanding at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period"“Redemption Price”) following exercise per share of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption DateSeries A Preferred Stock, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower sum of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or Liquidation Preference per share of Series A Preferred Stock to be redeemed and (ii) eight percent any Accrued Dividends (8%) per annum, until up to and including the Cash Amount (or portion thereof) Redemption Date). In the event that any certificate for shares of Series A Preferred Stock shall be paid surrendered for partial redemption, the Company shall execute and deliver to or upon the written order of the holder of the certificate so surrendered a new certificate for the shares of Series A Preferred Stock not so redeemed. Shares of Series A Preferred Stock redeemed in full accordance with this 2222.1(a), shall return to the status of and constitute authorized but unissued shares of Preferred Stock, without classification as to series until such shares are once more classified as a particular series by the Partnership. The Redemption Right shall be exercised Board of Directors pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all provisions of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number Certificate of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemptionIncorporation.
(b) Notwithstanding Such holder shall deliver to the provisions Company a written notice of Section 7.4(a), in the event such redemption (a Limited Partner elects “Redemption Notice”) not less than fifteen (15) Business Days prior to exercise the Redemption Right, Date. The Redemption Notice must state the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either following: (iA) the Cash Amount, as provided for in Section 7.4(a), or aggregate number of shares of Series A Preferred Stock to be redeemed; (iiB) the REIT Common Shares Amount, as elected by Redemption Date; (C) the General Partner, as directed by the Company Redemption Price; and (in its sole and absolute discretion), D) that Preferred Dividends on the Specified shares to be redeemed will cease to accrue on such Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described Redemption Price shall have been paid in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy full on the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(bSubject to 2222.1(d), a Limited Partner upon the Redemption Date, the Company shall not be entitled to receive REIT Common Shares if pay the delivery Redemption Price in respect of REIT Common Shares each share of Series A Preferred Stock to such Partner holder by wire transfer of immediately available funds on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by Date. The Company shall remain liable for the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation payment of the Company, as amended or restated from time Redemption Price in respect of each share of Series A Preferred Stock and any Preferred Dividends with respect to time. Without limiting the effect shares of the preceding sentence, no Person shall Series A Preferred Stock to be permitted redeemed to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be such amounts are not promptly paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b)as provided herein.
(d) Each Limited Partner covenants Solely in the event that the Company does not have the funds legally available for such redemption in cash on all of the shares of Common Stock and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the PartnershipSeries A Preferred Stock then outstanding, the Company or its Affiliatesshall, as the case may bein lieu of paying such holder in cash, free and clear of all liens and, notwithstanding anything herein contained issue a senior unsecured note with a principal amount equal to the contraryRedemption Price in respect of each share of Series A Preferred Stock of such holder, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units an interest rate equal to the General PartnerDividend Rate, Partnership or a term to maturity of one year and such other terms as reasonably acceptable to the Company, such Limited Partner shall assume and pay such transfer taxapplicable holder.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Securities Purchase Agreement (Synchronoss Technologies Inc)
Redemption Right. (a) A. Subject to Section 7.4(bSections 8.6.B and 8.6.C, on or after the date one (1) and Section 7.4(c), and year after the provisions closing of any agreements between the Partnership and one or more Limited Partnersinitial public offering of REIT Shares by the Gables Trust, each Limited Partner Partner, other than the General Partner, shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner (other than Series B Preferred Units which such Units shall have only those Redemption Rights set forth in Exhibit F, attached hereto) at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner. "); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the Gables Trust and/or the General Partner elects to purchase the Partnership Units subject to the Notice of Redemption pursuant to Section 8.6.B. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid on or after the Specified Redemption Date. Each Redeeming The Assignee of any Limited Partner agrees may exercise the rights of such Limited Partner pursuant to provide such representations and related indemnities regarding good and unencumbered titlethis Section 8.6, and such Limited Partner shall be deemed to execute have assigned such documents, as rights to such Assignee and shall be bound by the General Partner may reasonably require in exercise of such rights by such Assignee. In connection with any redemptionexercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
(b) B. Notwithstanding the provisions of Section 7.4(a)8.6.A, in the event a Limited Partner elects to exercise that exercises the Redemption Right, Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the General Partner at and the direction Gables Trust, and either of the Company, directly General Partner or indirectly through one the Gables Trust (or more Affiliates, both) may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by Partner or the Company Gables Trust (in its sole and absolute discretion), on the Specified Redemption Date, provided that whereupon the Company may defer payment of General Partner or the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, Gables Trust shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. If the General Partner and/or the Gables Trust shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, they shall so notify the Redeeming Partner within five Business Days after the receipt by the General Partner of such Notice of Redemption. Unless the General Partner, as directed by Partner and/or the Company Gables Trust (in its their sole and absolute discretion), ) shall exercise its right to assume directly and satisfy purchase Partnership Units from the Redemption RightRedeeming Partner pursuant to this Section 8.6.B, neither the General Partner nor the Company itself Gables Trust shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by Partner or the Company Gables Trust shall exercise its right to satisfy purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 7.4(b)8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the such Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company General Partner or the Gables Trust, as the case may be, shall treat the transaction between the Company General Partner or the Gables Trust, as the case may be, and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company General Partner or its Affiliatesthe Gables Trust, as the case may be. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company General Partner may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) C. Notwithstanding the provisions of Section 7.4(a) 8.6.A and Section 7.4(b)8.6.B, a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right pursuant to Section 8.6.A if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company General Partner or the Gables Trust pursuant to Section 7.4(b8.6.B (regardless of whether or not the General Partner or the Gables Trust would in fact exercise its rights under Section 8.6.B) would be prohibited under the Articles Declaration of Incorporation Trust or would violate any federal or state securities laws.
D. In connection with a redemption by Gables Trust of any or all of the CompanyGables Trust Series A Preferred Shares, the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series A Preferred Units that the Gables Trust and/or the General Partner holds, and such redemption proceeds shall be distributed to the Gables Trust and/or the General Partner, as amended applicable, pursuant to the provisions of Section 5.1(b).
E. In connection with a redemption by Gables Trust of any or restated from time to time. Without limiting the effect all of the preceding sentence, no Person shall Gables Trust Series B Preferred Shares that may at any time be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, (in accordance with the terms set forth in Section 7.4(a) or 7.4(bof the Series B Preferred Units).
(d) Each Limited Partner covenants and agrees with , the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series B Preferred Units that all Common Partnership Units delivered for Gables Trust and/or the General Partner then holds, and such redemption proceeds shall be delivered distributed to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither Gables Trust and/or the General Partner, as applicable, in an amount equal to the Company (nor portion of the Gables Trust's and the General Partner's Adjusted Capital Account balance attributable to such units being redeemed, after adjusting such Capital Accounts pursuant to the provisions of Section 13.2.
F. In connection with a redemption by Gables Trust of any or all of its Affiliates) nor the Gables Trust Series C Preferred Shares, the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series C Preferred Units that the Gables Trust and/or the General Partner holds, and such redemption proceeds shall be under any obligation distributed to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to Gables Trust and/or the General Partner, Partnership as applicable, pursuant to the provisions of Section 5.1(b).
G. In connection with a redemption by Gables Trust of any or all of the CompanyGables Trust Series C-1 Preferred Shares, such Limited the General Partner shall assume have the right to cause the Partnership to redeem all or a portion of the Series C-1 Preferred Units that the Gables Trust and/or the General Partner holds, and pay such transfer taxredemption proceeds shall be distributed to the Gables Trust and/or the General Partner, as applicable, pursuant to the provisions of Section 5.1(b).
H. In connection with a redemption by Gables Trust of any or all of the Gables Trust Series D Preferred Shares, the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series D Preferred Units that the Gables Trust and/or General Partner holds, and such redemption proceeds shall be distributed to the Gables Trust and/or the General Partner, as applicable, pursuant to the provisions of Section 5.1(b).
I. In connection with a redemption by Gables Trust of any or all of the Gables Trust Series Z Preferred Shares, the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series Z Preferred Units that the Gables Trust and/or the General Partner holds, and such redemption proceeds shall be distributed to the Gables Trust and/or the General Partner, as applicable, pursuant to the provisions of Section 5.1(c).
J. In connection with a redemption by the Partnership of any or all of the Series B Preferred Units that may at any time be issued and outstanding and not held by Gables Trust (e) REIT Common Shares issued in accordance with the terms of the Series B Preferred Units as set forth in Exhibit F hereto), the General Partner shall have the right to cause the Partnership to distribute to the holders of the Series B Preferred Units being redeemed an amount equal to the aggregate Series B Liquidation Preference with respect to such Units as determined pursuant to Section 7.4(b13.2 hereof, without regard to the requirements of Section 13.2(A)(iv) may contain with respect to distributions to holders of the Series A Preferred Units, the Series C Preferred Units, the Series C-1 Preferred Units or the Series D Preferred Units (or any other then outstanding Units or Shares ranking on a parity thereto), to the extent that at the time of such legends regarding restrictions on transfer as redemption the Company in good faith determines to be necessary or advisable in order to terms of (1) comply with restrictions on transfer under the Securities Act Series A Preferred Units and applicable state securities laws and the Gables Trust Series A Preferred Shares, (2) protect the ability terms of the Company to continue to qualify as Series C Preferred Units and the Gables Trust Series C Preferred Shares, (3) the terms of the Series C-1 Preferred Units and the Gables Trust Series C-1 Preferred Shares and (4) the terms of the Series D Preferred Units and the Gables Trust Series D Preferred Shares (and of any other then outstanding Units or Shares ranking on a REIT.parity thereto) permit a redemption of the Series B Preferred Units only. ARTICLE 9
Appears in 1 contract
Sources: Limited Partnership Agreement (Gables Realty Limited Partnership)
Redemption Right. (a) Subject to this Section 7.4(b) and Section 7.4(c), 8.5 and the provisions of any agreements between the Partnership and one or more Limited PartnersPartners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the "Redemption Right"terms and conditions set forth herein) to require the Partnership to redeem on (a Specified Redemption Date “Redemption”) all or a portion of the Common such Partnership Units held by such Limited Partner at (the “Tendered Units”) in exchange (a redemption price equal to and in the form of “Redemption Right”) for REIT Shares issuable on, or the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after payable on, the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full as determined by the PartnershipGeneral Partner in its sole discretion. The Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming PartnerLimited Partner exercising the Redemption Right (the “Tendering Party”). Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. A Limited Partner (other than the Special Limited Partner or the Adviser) may not exercise the Redemption Right for less than one thousand (1,000) Common 1,000 Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common 1,000 Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner The Tendering Party shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions foregoing, the Special Limited Partner, the Adviser and its Affiliates and officers and employees of the Advisor and its Affiliates shall have the right to require the Partnership to redeem all or a portion of their respective Class E Units pursuant to this Section 7.4(a8.5 at any time irrespective of the period the Partnership Units have been held by them, subject to any separate lock-up restrictions with respect to the Sponsor Committed Amount. The Partnership shall redeem any such Class E Units of the Special Limited Partner, the Adviser and its Affiliates and officers and employees of the Adviser and its Affiliates for Class E REIT Shares or the Cash Amount (at such Person’s election) unless the Board of Directors of the General Partner determines that any such redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units will be redeemed for an amount of Class E REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Class E Units.
(c) If the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to redeem Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in the event a Limited Partner elects to exercise the Redemption Rightwhich case, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash AmountGeneral Partner, acting as provided for in Section 7.4(a)a distinct legal entity, or shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption Right, and (ii) the REIT Common Shares Amountsuch transaction shall be treated, for federal income tax purposes, as elected a transfer by the Tendering Party of such Tendered Units to the General Partner, as directed Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Company ACTIVE\193981801.8 Tendering Party for which the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to issue REIT Shares (rather than cash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the Partnership shall act in its sole a fair, equitable and absolute discretion)reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If the Partnership elects to redeem any number of Tendered Units for REIT Shares rather than cash, on the Specified Redemption Date, provided that the Company may defer payment Tendering Party shall sell such number of the Cash Amount until Tendered Units to the end General Partner in exchange for a number of REIT Shares equal to the product of the Payout Period described in Section 7.4(a) (in which case REIT Shares Amount and the Cash Amount shall bear interest as described in Section 7.4(a)), Applicable Percentage. The product of the Applicable Percentage and provided, further, that the Company mayREIT Shares Amount, if it has elected so to defer payment applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Cash Amount, further elect at any time before Aggregate Share Ownership Limit (as calculated in accordance with the end Articles of Incorporation) and other restrictions provided in the Payout Period to pay all or any portion Article of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such electionIncorporation, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes bylaws of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole Securities Act and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner relevant state securities or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right“blue sky” laws. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a8.5(a) and this Section 7.4(b8.5(c), a Limited Partner the Tendering Parties shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) have no rights under this Agreement that would otherwise be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b)Incorporation.
(d) Each Limited Partner covenants and agrees In connection with the General Partner that all Common Partnership Units delivered for redemption shall be delivered an exercise of Redemption Rights pursuant to the Partnershipthis Section 8.5, the Company or its Affiliates, as Tendering Party shall submit the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units following to the General Partner, Partnership in addition to the Notice of Redemption:
(1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(2) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date
(3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the written affidavit or representation required by Section 8.5(d)(1) or (2) after giving effect to the CompanyRedemption, such Limited neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(4) Any other documents as the General Partner shall assume and pay such transfer taxmay reasonably require.
(e) REIT Common Shares issued Any Cash Amount to be paid to a Tendering Party pursuant to this Section 7.4(b8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the General Partner to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount. Notwithstanding the foregoing, the General Partner agrees to use its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(f) may contain such legends regarding Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights to qualify prevent, among other things, (a) any person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the General Partner’s common stock from being owned by less than 100 persons, the General Partner from being “closely held” within the meaning of section 856(h) of the Code, and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the Partnership be treated as a REIT“publicly traded partnership” under section 7704 of the Code.
(g) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Sources: Limited Partnership Agreement (EQT Exeter Real Estate Income Trust, Inc.)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and Beginning on the provisions date of any agreements between the Partnership and one or more Limited Partnersthis Agreement, each Limited Partner Holder shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common number of Partnership Units held by such Limited Partner Holder and set forth on Exhibit A under the heading "Immediate Redemption Units" at a redemption price equal to and in the form of the Cash Amount Redemption Amount. Notwithstanding any provisions of the Partnership Agreement to the contrary, the Partnership agrees that any Immediate Redemption Units tendered for redemption within 10 days following the date of this Agreement shall be paid by redeemed for the PartnershipREIT Shares Amount. The Partnership On or after the date that is six months from the date of this Agreement, each Holder shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay require the Cash Amount Partnership to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the redeem on a Specified Redemption DateDate all or a portion of the total number of Partnership Units held by such Holder and set forth on Exhibit A, the Cash Amount (or portion thereof) due and payable to including any Immediate Redemption Units not previously tendered for redemption, at a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate redemption price equal to and in the lower form of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipRedemption Amount. The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form of Exhibit B delivered to the Partnership (with a copy to the General Partner) Company by the Redeeming PartnerHolder who is exercising the Redemption Right. A Limited Partner Holder may not exercise the Redemption Right for less than one thousand hundred (1,000100) Common Partnership Units or, if such Limited Partner Holder holds less than one thousand hundred (1,000100) Common Partnership Units, less than all of the Common Partnership Units held by such PartnerHolder. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner A Holder shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units on or after the Specified Redemption Date. Each Redeeming Partner agrees Subject to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole Sections 4.2 and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes 4.3 of this Agreement as the owner of such Common Partnership Units. Unless the General PartnerAgreement, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation otherwise be subject to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the applicable provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation 8.05 of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b)Partnership Agreement.
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Redemption and Registration Rights Agreement (Winston Hotels Inc)
Redemption Right. (a) Subject to the terms of Section 7.4(b8.05, on or after the date (i) that is one (1) year after the closing of the Offering, James I. Humphrey, Jr. and Section 7.4(c)Humphrey ▇▇▇▇▇▇▇▇▇▇, and ▇▇▇. ▇▇ ▇imite▇ ▇▇▇▇▇▇rs with respect to the provisions Units received by them in connection with the offering of the REIT Shares issued on November 29, 1994, or (ii) that is six months after the issuance by the Partnership of any agreements between Units other than those issued in connection with the Partnership and one or more Limited PartnersNovember 29, 1994 issuance of REIT Shares (each such date, a "First Redemption Date" with respect to the applicable Units), each Limited Partner shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership applicable Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right (the "Redeeming Partner"). A Limited Partner may not exercise the Redemption Right for (i) less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right and (ii) more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises Partnership Units that would, upon redemption, entitle such Limited Partner to 9.9% of the Redemption Right by the Limited Partners to not less than once per calendar yearREIT Shares. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a8.05(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, HHTI may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right within the maximum and minimum limits provided in Section 8.05(a) by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), Redemption Amount on the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest General Partner or HHTI, as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliatesapplicable, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company Partner or HHTI shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b)preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company General Partner shall treat the transaction between the Company General Partner or HHTI, applicable, and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company General Partner or its AffiliatesHHTI, as applicable, for federal income tax purposes. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company General Partner may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares.
(c) Except as provided in Section 8.05(e), the Redeeming Partnership, the General Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash AmountHHTI, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of shall pay the Cash Amount, as provided above, should the General Partner, as directed by the Company elect Amount to satisfy a Redemption Right by paying the Redeeming Partner as the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order Redemption Amount for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: Partner if (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery acquisition of REIT Common Shares to by such Partner on the Specified Redemption Date would (A) result in such Partner or such later date permitted by Section 7.4(b)any other person owning, as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation directly or indirectly, REIT Shares in excess of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own ("Ownership Limit," as defined in the Articles of Incorporation and calculated in accordance therewith, except as provided in the Articles of Incorporation, (B) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in the Articles of Incorporation, (C) result in HHTI being "closely held" within the meaning of Section 856(h) of the CompanyCode, as amended or restated from time to time(D) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with cause the General Partner that all Common Partnership Units delivered or HHTI to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner's, HHTI's, the Partnership's or the Subsidiary Partnership's real property, within the meaning of Section 856(d)(2)(B) of the Code, or (E) cause the acquisition of REIT Shares by such Partner to be "integrated" with any other distribution of REIT Shares for redemption shall be delivered to purposes of complying with the registration provisions of the Securities Act of 1933, as amended, or (ii) the Partnership, the Company General Partner or its AffiliatesHHTI, as the case may be, free and clear so elects in its sole discretion, unless the Redeeming Partner delivers an opinion of all liens and, notwithstanding anything herein contained counsel satisfactory to the contraryPartnership or HHTI, neither as the case may be, in its sole discretion, opining that the acquisition of REIT Shares would not adversely affect HHTI's status as a REIT under Sections 856-860 of the Code. Any Cash Amount to be paid to a redeeming Limited Partner pursuant to this Section 8.05 shall be paid within sixty (60) days after the initial date of receipt by the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer Notice of its Common Redemption relating to the Partnership Units to be redeemed; provided, however, that such sixty (60) day period may be extended for up to an additional one hundred eighty (180) day period to the extent required for the General PartnerPartner and HHTI to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount. Notwithstanding the foregoing, the General Partner and HHTI and the Partnership agree to use their best efforts to cause the closing of the acquisition of redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(d) Each certificate, if any, evidencing REIT Shares that may be issued in redemption of Partnership Units under Section 8.05 above (the "Redemption Shares") shall bear a restrictive legend in substantially the following form: "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, or any state securities law. No transfer of the Shares represented by this certificate shall be valid or effective unless (A) such transfer is made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Act"), or (B) the holder of the securities proposed to be transferred shall have delivered to the company either a no-action letter from the Securities and Exchange Commission or an opinion of counsel (who may be an employee of such holder) experienced in securities matters to the effect that such proposed transfer is exempt from the registration requirements of the Act which opinion shall be reasonably satisfactory to the Company, such Limited Partner shall assume and pay such transfer tax."
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights as and if deemed necessary to qualify as ensure that the partnership does not constitute a REIT"publicly traded partnership" under Section 7704 of the Code.
Appears in 1 contract
Sources: Limited Partnership Agreement (Humphrey Hospitality Trust Inc)
Redemption Right. (a) Subject to Section 7.4(b8.5(c) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited PartnersArticle 12 hereof, each Limited Partner Partner, other than the General Partner, shall have the right (the "Redemption Right") to require the Partnership to redeem on (or, in the General Partner's sole discretion, before) a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership General Partner by the Limited Partner who is exercising the Redemption Right (with a copy to the "Redeeming Partner"); PROVIDED, HOWEVER, that unless the General Partner, in its sole discretion, shall waive this clause in writing, a Specified Redemption Date with respect to any Class A Limited Partner who shall acquire Class A Common Units on or after the date set forth in the preamble hereof shall not occur until after six (6) by months and one (1) day following the Redeeming date in the preamble, or, if later, until six (6) months and one (1) day following the issuance of Partnership Units to a Limited Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid with respect to Partnership Units where the Partnership Record Date for such distribution shall be after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as date of redemption of the General Partner may reasonably require in connection with any redemptionPartnership Units.
(b) Notwithstanding the provisions of Section 7.4(a8.5(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Redemption Amount on or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on before the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, General Partner shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner; PROVIDED, as directed by the Company (in its sole and absolute discretion)HOWEVER, that such Partnership Units shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Rightthereupon be converted into Class B Common Units. In the event the General Partner, as directed by the Company Partner shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b)preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company General Partner shall treat the transaction between the Company General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its AffiliatesGeneral Partner for federal income tax purposes. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company General Partner may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (The Partnership or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its AffiliatesPartner, as the case may be, free and clear of all liens and, notwithstanding anything herein contained may elect to pay the contrary, neither Cash Amount to a Redeeming Partner as the Redemption Amount for such Partner. Such determination shall be made by the General Partner, the Company (nor any of Partner in its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer taxsole discretion.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Limited Partnership Agreement (Mid America Apartment Communities Inc)
Redemption Right. A. Beginning with the fiscal year of the Partnership ending December 31, 2000 and until such time as the Common Stock shall be quoted or listed on the NASDAQ National Market or a national securities exchange, Heritage shall cause a valuation report of the assets and liabilities of the Partnership (aan "ANNUAL VALUATION REPORT") to be prepared and delivered to the holders of the Common Units. For each fiscal year of the Partnership, such Annual Valuation Report shall be delivered to the holders of Common Units no later than one hundred and twenty (120) days following the end of the Partnership's fiscal year.
B. Subject to Section 7.4(b) Sections 3.2.C and Section 7.4(c)3.2.D, and beginning after the provisions delivery by the General Partner to the holders of any agreements between Common Units of an Annual Valuation Report following the fiscal year of the Partnership ended December 31, 2000 and one or more Limited Partnerseach year thereafter, during a Redemption Period, each Limited Partner Partner, other than the General Partner, shall have the right (the "Redemption RightREDEMPTION RIGHT") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate for an amount equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month periodCash Amount, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) which shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise who is exercising the Redemption Right for less than one thousand redemption right (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, "REDEEMING PARTNER"); PROVIDED, HOWEVER, that the General Partner may amend this Partnership shall not be obligated to satisfy such Redemption Right if Heritage elects to purchase the Common Units subject to the Notice of Redemption pursuant to Section 7.4(a) to limit the number of exercises 3.2.C. Effective as of the Specified Redemption Right by the Limited Partners to not less than once per calendar year. Neither Date, the Redeeming Partner nor shall not receive any permitted dividends or purported assignee of any Limited Partner shall have any right distributions with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Dateredeemed. Neither the Redeeming Partner nor any permitted or purported assignee The Transferee of any Limited Partner shall have any right, with respect may exercise the rights of such Limited Partner pursuant to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered titlethis Section 3.2, and such Limited Partner shall be deemed to execute have assigned such documentsrights to such Transferee and shall be bound by the exercise of such rights by such Transferee. In connection with any exercise of such rights by such Transferee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership or Heritage, as the General Partner case may reasonably require in connection with any redemptionbe, directly to such Transferee and not to such Limited Partner.
(b) C. Notwithstanding the provisions of Section 7.4(a)3.2.B, in the event a Limited Partner elects to exercise that exercises the Redemption RightRight shall be deemed to have offered to sell the number of Common Units set forth in the Notice of Redemption to Heritage, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, and Heritage may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Common Units by paying to the Redeeming Partner either (i) the Cash AmountAmount or, as provided for in Section 7.4(a)if the Common Stock is quoted or listed on the NASDAQ National Market or a national securities exchange, or (ii) the REIT Common Shares Amount and the Fractional Share Cash Amount, as elected by the General Partner, as directed by the Company Heritage (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to whereupon on such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, date Heritage shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless If Heritage shall elect to exercise its right to purchase Common Units under this Section 3.2.C with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five (5) Trading Days after the receipt by the General Partner, as directed by the Company Partner of such Notice of Redemption. If Heritage (in its sole and absolute discretion), shall ) elects not to exercise its right to assume directly and satisfy purchase Common Units from the Redemption RightRedeeming Partner pursuant to this Section 3.2.C, neither Heritage nor the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. , and the Partnership shall be required to pay the Redeeming Partner the Cash Amount in accordance with the provisions of Section 3.2.B. In the event the General Partner, as directed by the Company Heritage shall exercise its right to satisfy purchase Common Units with respect to the exercise of a Redemption Right in the manner as described in the first sentence of this Section 7.4(b)3.2.C, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the such Redemption Right, and each of the Redeeming Partner, the Partnership, Partnership and the Company General Partner, as the case may be, shall treat the transaction between the Company Heritage and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its AffiliatesHeritage. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as Heritage and the Company General Partner may reasonably require in connection with the issuance of REIT shares of Common Shares Stock by Heritage upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) D. Notwithstanding the provisions of Section 7.4(a) 3.2.B and Section 7.4(b)3.2.C, (i) a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right pursuant to Section 3.2.B if the delivery of REIT shares of Common Shares Stock to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) 3.2.C would be prohibited under the Articles of Incorporation or violate any provision of the Company, as amended Charter of Heritage or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise would violate any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended federal or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2ii) protect a Limited Partner shall not have the ability right to exercise the Redemption Right pursuant to Section 3.2.B if in the opinion of counsel for Heritage, Heritage or the Company to continue to qualify General Partner would, as a result thereof, no longer qualify (or if there is a material risk that Heritage or the General Partner no longer would qualify) as a REIT or a REIT-qualified subsidiary.
E. A Limited Partner shall not be entitled to exercise the Redemption Right with respect to any Preferred Unit; but this Section 3.2.E shall not preclude the General Partner from amending this Agreement in connection with the issuance or proposed issuance of Preferred Units pursuant to Section 3.1.C so as to provide a right of holders hereof to have such Preferred Units redeemed by the Partnership on terms set forth in such amendment."
Appears in 1 contract
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner, other than Ashford Prime OP Limited Partner LLC, shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner (the “Redeeming Partner”) at a redemption price per Common Partnership Unit equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after on the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption DateDate except as provided in Section 7.4(b). Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event if a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that if the Company may defer payment of General Partner has not affirmatively notified the Redeeming Partner on or before one Business Day before the Specified Redemption Date that either the Partnership, the General Partner or its Affiliates will pay the Cash Amount until then the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount General Partner shall bear interest as described in Section 7.4(a))be deemed to have elected, and provideddirectly or through one or more Affiliates, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal Amount to the Redeeming Partner on the Specified Redemption Date, and the Company agrees that it will provide such portion REIT Common Shares on the Specified Redemption Date, subject to the other provisions of the Cash Amount plus any accrued but unpaid interest thereonthis Section 7.4. On any such electionelection of the General Partner to assume and satisfy a Redemption Right, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, or unless the General Partner has been deemed to assume the Redemption Right as provided in this Section 7.4(b), neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's ’s exercise of the Redemption Right. In the event If the General Partner, as directed by the Company Company, shall exercise its right right, or shall be deemed to have elected, to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), except as provided in the following paragraph, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's ’s exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's ’s Common Partnership Units to the Company or its Affiliates; provided that if the Redeeming Partner is redeeming all of its Common Partnership Units, the Partnership shall redeem any fractional Common Partnership Unit (constituting less than one Common Partnership Unit owned by the Redeeming Partner by paying the Cash Amount with respect to such fractional Common Partnership Unit to such Redeeming Partner. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash AmountShares, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash AmountRedemption Right, as provided above, should the General Partner, as directed by the Company elect elect, or be deemed to elect, to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder stockholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder stockholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder stockholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay . If such Redeeming Partner the Cash Amount; or (iii) stockholder approval is not obtained within one hundred and thirty (130) days after such Common Partnership Units are presented for redemption or the stockholders have voted against the issuance of the REIT Common Shares and payment of the REIT Common Shares, the Partnership will distribute to the Redeeming Partner any distributions pursuant to Section 8.1 that were not made after the Specified Redemption Date. If such shareholder approval is not obtainedDate with respect to the Common Partnership Units redeemed because of the provisions of Section 7.4(a), the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end earlier of what (i) ten (10) days after stockholders have voted against the Payout Period would have been had the General Partner, as directed by the Company not elected to pay issuance of the REIT Common Share Amount upon the Shares, or (ii) one hundred thirty (130) days after such Common Partnership Units are presented for redemption, together with interest on such Cash Amount as specified in Section 7.4(afrom the Specified Redemption Date to the date of payment at the rate equal to the lesser of (i) hereofthe Company’s annual dividend rate on REIT Common Shares for the twelve (12) month period prior to the Valuation Date and based upon the Cash Amount for Common Partnership Units redeemed, or (ii) eight percent (8%).
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall shall, to the fullest extent permitted by law, be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or Section 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event if any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Limited Partnership Agreement (Ashford Hospitality Prime, Inc.)
Redemption Right. (a) Subject to Section 7.4(b8.04(c) and Section 7.4(c), 8.04(d) and the provisions of any agreements agreement between the Partnership and one or more Limited Partners, beginning on the date that is twelve months after the date of issuance of any Common Units (including any Common Units that are issued upon the conversion of LTIP Units), each Limited Partner (other than the Company or any Subsidiary of the Company) shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner Partner’s Common Units at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Redeeming Limited Partner”), and such notice shall be irrevocable unless otherwise agreed upon by the General Partner. No Limited Partner may deliver more than one Notice of Redemption during each calendar quarter unless otherwise agreed upon by the General Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Limited Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Common Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a)8.04(a) hereof, in the event if a Limited Partner elects to exercise exercises the Redemption RightRight by delivering to the Partnership a Notice of Redemption, then the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume cause the Company to purchase directly and satisfy a Redemption Right acquire some or all of, and in such event the Company agrees to purchase and acquire, such Common Units by paying to the Redeeming Limited Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by whereupon the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered tendered for redemption by the Redeeming Limited Partner and the Company shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b)preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner's ’s exercise of the Redemption Right, and each of the Redeeming Limited Partner, the Partnership, the General Partner and the Company shall treat the transaction between the Company and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner's ’s Common Partnership Units to the Company or its Affiliatesfor federal income tax purposes. Each Redeeming Limited Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a8.04(a) hereof, any Limited Partner that holds Common Units issued to the contributors of limited liability company interests in Elizon Residential Phoenix I LLC, Elizon Residential II LLC and Elizon Housing 2012-AI LLC contributed to the Partnership pursuant to the Contribution and Sale Agreements dated as of January 18, 2013, shall have a Redemption Right with respect to such Common Units that can be exercised at any time prior to February 1, 2013 (without being subject to the twelve month holding period referenced in Section 8.04(a) hereof), and in the event any such Limited Partner exercises such Redemption Right prior to February 1, 2013, (i) the Specified Redemption Date for such redemption shall be the next business day after such Redeeming Limited Partner provides the Company with a Notice of Redemption with respect to such Common Units and (ii) the Company shall be required to issue to such Redeeming Limited Partner REIT Shares on a one-for-one basis in satisfaction of the Company’s redemption obligation (and shall not have the right to pay such Redeeming Limited Partner the Cash Amount in respect of such redemption).
(d) Notwithstanding the provisions of Sections 8.04(a), 8.04(b) and Section 7.4(b)8.04(c) hereof, a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if the delivery of REIT Common Shares to such Limited Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b8.04(b) or Section 8.04(c) hereof (regardless of whether or not the Company would in fact exercise its rights under Section 8.04(b) or Section 8.04(c)) would be prohibited under the Articles of Incorporation of the Company, as amended (i) result in such Limited Partner or restated from time to time. Without limiting the effect of the preceding sentence, no any other Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles Articles) owning, directly or indirectly, REIT Shares in excess of Incorporation the Stock Ownership Limit or any Excepted Holder Limit (each as defined in Articles) and calculated in accordance therewith, except as provided in the Articles, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), (iii) result in the Company being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause the Company to own, actually or constructively, 10% or more of the ownership interests in a tenant (other than a TRS) of the Company’s, as amended the Partnership’s or restated from time to timea Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) more than 9.8% of the total number Code, (v) otherwise cause the Company to fail to qualify as a REIT under the Code, or (vi) cause the acquisition of issued and outstanding REIT Shares by such Limited Partner to be “integrated” with any other distribution of REIT Shares or Common Shares, unless waived by Units for purposes of complying with the board of directors registration provisions of the Company Securities Act. The General Partner, in its sole and absolute discretion. To , may waive the extent any attempted restriction on redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in this Section 7.4(a) or 7.4(b8.04(d).
(de) Each Redeeming Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered tendered for redemption shall pursuant to this Section 8.04 will be delivered to the Partnership, Partnership or the Company or its Affiliates, as the case may be, free and clear of all liens andliens, notwithstanding anything herein contained claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to the contrarysuch Common Units, neither the General Partner, Partnership nor the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire such Common Partnership Units which are pursuant to Section 8.04(a) or may be subject to any liensSection 8.04(b) hereof. Each Redeeming Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Redeeming Limited Partner shall assume and pay such transfer tax.
(ef) REIT Common Shares issued Any Cash Amount to be paid to a Redeeming Limited Partner pursuant to this Section 7.4(b) 8.04 shall be paid on the Specified Redemption Date; provided, that the General Partner may contain such legends regarding restrictions on transfer as elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Company in good faith to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Share Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, the General Partner agrees to use its commercially reasonable efforts to cause the closing of the acquisition of redeemed Common Units hereunder to occur as quickly as reasonably possible.
(g) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or advisable in order appropriate to (1) cause the General Partner and the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Redeeming Limited Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units, and such Redeeming Limited Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(h) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights as and if deemed necessary or reasonable to qualify ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the Partnership being treated as a REIT“publicly traded partnership” under Section 7704 of the Code.
Appears in 1 contract
Sources: Limited Partnership Agreement (Ellington Housing Inc.)
Redemption Right. (a) Subject to Section 7.4(b8.04(c) and Section 7.4(c), and the provisions of any agreements agreement between the Partnership and one or more Limited Partners, beginning on the date that is eighteen months after the date of issuance of any Common Units (treating any Common Units that are issued upon the conversion of LTIP Units as having been issued when the LTIP Units into which they were converted were issued), each Limited Partner (other than GIP REIT or any Subsidiary of GIP REIT) shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner Partner’s Common Units at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to the General PartnerPartner ) by the Redeeming Limited Partner who is exercising the Redemption Right (the “Tendering Party”), and such notice shall be irrevocable unless otherwise agreed upon by the General Partner. No Limited Partner may deliver more than one Notice of Redemption during each calendar quarter unless otherwise agreed upon by the General Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Limited Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner The Tendering Party shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Common Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Contribution and Subscription Agreement (Generation Income Properties, Inc.)
Redemption Right. (a) Subject to Section 7.4(bSections 8.05(b), 8.05(c), 8.05(d), 8.05(e) and Section 7.4(c), 8.05(i) and the provisions of any agreements agreement between the Partnership and one or more any Limited Partner with respect to Partnership Units held by such Limited Partners, each such Limited Partner Partner, other than the Original Limited Partner, shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date, or on the Class A Specified Redemption Date with respect to a Class A Partner, all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The , provided, that such Partnership Units shall have up to been outstanding for at least one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnershipyear. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Partnership Units subject to the Notice of Redemption pursuant to Section 8.05(b); and provided, further, that no Limited Partner may deliver more than two Notices of Redemption during each calendar year, provided that each Class A Partner may deliver a Notice of Redemption more frequently provided it is limited to one Notice of Redemption per calendar quarter. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common 1,000 Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common 1,000 Partnership Units, less than all of the Common Partnership Units held by such Partner. MoreoverExcept as otherwise provided in Section 8.05(h), a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date or the Class A Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemptionapplicable.
(b) Notwithstanding the provisions of Section 7.4(a8.05(a), in the event a Limited Partner elects to exercise that exercises the Redemption RightRight shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the General Partner, and the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretiondiscretion but subject to the last sentence of this subsection (b), elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company Partner (in its sole and absolute discretion), on the Specified Redemption DateDate or on the Class A Specified Redemption Date with respect to a Class A Partner, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, General Partner shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five (three for any Class A Partner) Business Days after the receipt by the General Partner of such Notice of Redemption. Such notice shall indicate whether the General Partner will pay the Cash Amount or the REIT Shares Amount. Unless the General Partner, as directed by the Company Partner (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy purchase Partnership Units from the Redemption RightRedeeming Partner pursuant to this Section 8.05(b), neither the General Partner nor the Company itself shall not have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company Partner shall exercise its right to satisfy purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 7.4(b8.05(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the such Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company General Partner shall treat the transaction between the Company General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its AffiliatesGeneral Partner. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company Partnership may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If Section 5.05 hereof shall prevent the Partnership from satisfying, in whole or in part, any exercise of the Redemption Right by a Redeeming Partner, then the Company (whether or not it is satisfied by then the delivery of REIT Common Shares, the Redeeming Partner General Partner) shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by have elected pursuant to this Section 7.4(b8.05(b) that the Company delivers REIT Common Shares in satisfaction to purchase, and hereby agrees to purchase, directly from such Redeeming Partner, such number of a deferred payment of the Cash Amount, Partnership Units as the case may be. Notwithstanding anything Partnership is unable to redeem due to the contrary in operation of Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof5.05.
(c) Notwithstanding the provisions of Section 7.4(a8.05(a) and Section 7.4(b8.05(b), a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b8.05(b) (regardless of whether or not the Company would in fact exercise its rights under Section 8.05(b)) would be prohibited under (i) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), (ii) result in the Articles Company being "closely held" within the meaning of Incorporation Section 856(h) of the Code, (iii) cause the Company to own, directly or constructively, 10% or more of the ownership interests in a tenant of the Company's, the Partnership's or a Subsidiary's real property, within the meaning of Section 856(d)(2)(B) of the Code, (iv) in the good faith opinion of the Board of Directors of the Company, as amended or restated from time to time. Without limiting otherwise disqualify the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if Company as a result ofREIT, and after giving effect to, such exercise any Person would Beneficially Own or (as defined v) in the Articles opinion of Incorporation of counsel for the Company, as amended constitute or restated from time to time) more than 9.8% result in a violation of Section 5 of the total number Securities Act, or cause the acquisition of issued and outstanding REIT Common Shares, unless waived Shares by such Partner to be "integrated" with any other distribution of REIT Shares for purposes of complying with the board of directors registration provisions of the Company Securities Act. The Company, in its sole and absolute discretion. To , may waive the extent any attempted restriction on redemption for REIT Common Shares would be a violation of set forth in this Section 7.4(c8.05(c); provided, it shall be null and void ab initio. The Cash Amount however, that in the event such restriction is waived, the Redeeming Partner shall be paid in the Cash Amount. Notwithstanding the foregoing, each Class A Partner shall be entitled to exercise its Redemption Right with respect to the Class A Partnership Units regardless of whether the issuance of REIT Shares to such instances, in accordance with Class A Partner would violate the terms restrictions set forth above, provided that the Class A Partner shall receive the Cash Amount in Section 7.4(a) or 7.4(b)connection with such redemption.
(d) Each Limited Any Cash Amount to be paid by the Partnership to a Redeeming Partner covenants pursuant to Section 8.05(a), and agrees with any Cash Amount or REIT Shares Amount to be paid by the General Partner that all Common Partnership Units delivered for redemption to a Redeeming Partner pursuant to Section 8.05(b), shall be delivered paid within 20 Business Days, or with respect to a Redeeming Partner who is a Class A Partner, five Business Days, after the initial date of receipt by the General Partner of the Notice of Redemption relating to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to be redeemed; provided, however, that such 20 Business Day period, but not the five Business Day period, may be extended for up to an additional 180-day period to the extent required for the Company to issue and sell securities the proceeds of which will be contributed to the Partnership to provide cash for payment of the Cash Amount. Notwithstanding the foregoing, the General Partner, Partner agrees to use its best efforts to cause the closing of the acquisition of redeemed Partnership or the Company, such Limited Partner shall assume and pay such transfer taxUnits hereunder to occur as quickly as reasonably possible.
(e) REIT Common Shares issued pursuant to Section 7.4(b) Notwithstanding any other provision of this Agreement, the General Partner may contain such legends regarding place appropriate restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights as and if deemed necessary to qualify ensure that the Partnership does not constitute a "publicly traded partnership" under Section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, such restrictions are necessary in order to avoid the Partnership being treated as a REIT"publicly traded partnership" under Section 7704 of the Code.
(f) The Conversion Factor shall be adjusted from time to time as follows:
(i) In the event that the Company (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) subdivides its outstanding REIT Shares, or (C) combines its outstanding REIT Shares into a smaller number of REIT Shares, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of REIT Shares issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time), and the denominator of which shall be the actual number of REIT Shares (determined without the above assumption) issued and outstanding on such date.
(ii) In the event that the Company declares or pays a dividend or other distribution on its outstanding REIT Shares (other than (a) ordinary cash dividends or (b) dividends payable in REIT Shares that give rise to an adjustment in the Conversion Factor under subsection (i) hereof) and the Value of the REIT Shares on the 20th trading day following the record date ("Record Date") for such dividend or distribution (the "Post-Distribution Value") is less than the Value of the REIT Shares on the Business Day immediately preceding such Record Date (the "Pre-Distribution Value"), then the Conversion Factor in effect after the Record Date shall be adjusted by multiplying the Conversion Factor in effect prior to the Record Date by a fraction, the numerator of which is the Pre-Distribution Value and the denominator of which is the Post-Distribution Value, provided. however, that no adjustment shall be made if (a) with respect to any cash dividend or distribution with respect to REIT shares, the Partnership distributes with respect to each Partnership Unit an amount equal to the amount of such dividend or distribution multiplied by the Conversion Factor or (b) with respect to any dividend or distribution of securities or property other than cash, the Partnership distributes with respect to each Partnership Unit an amount of securities or other property equal to the amount distributed with respect to each REIT share multiplied by the Conversion Ratio or a partnership interest or other security readily convertible into such securities or other property.
(iii) Any adjustment to the Conversion Factor shall become effective immediately after the effective date of any of the events described in subsections (i) and (ii), retroactive to the record date, if any, for such event, provided, however, that if the Partnership receives Notice of Redemption after the record date, but prior to the payment date or effective date, of any dividend, distribution, subdivision or combination referred to in subsection (i) or (ii), the Conversion Factor shall be determined as if the Company had received the Notice of Exchange immediately prior to the record date for such dividend, distribution, subdivision or combination.
(iv) If the rights (the "Stockholder Rights") governed by the Rights Agreement, dated as of January 27, 1998 (the "Rights Agreement"), by and between the General Partner and ChaseMellon Shareholder Services L.L.C., are issued and exercised, the Conversion Factor shall be equitably adjusted to take into account the resulting dilution in the REIT Shares, provided, however, that the Conversion Factor shall not be adjusted with respect to any Partnership Units held by any person to which the provisions of Section 7(e) of the Rights Agreement apply or would apply if such person were a holder of Stockholder Rights.
(g) If a Class A Partner exercises its Redemption Right with respect to Class A Partnership Units and the Partnership elects to pay the Cash Amount with respect to such redemption and does not pay such amount to such Class A Partner by the Class A Specified Redemption Date then on such date the Partnership shall issue such Class A Partner a promissory note (the "Class A Note"). The Class A Note shall be payable within 30 calendar days and will bear interest at a rate per annum equal to LIBOR plus 90 basis points. Payment of the Class A Note shall be guaranteed by the General Partner. For purposes of this Section 8.05(g), "LIBOR" means the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the date the Class A Note is issued for a term of 30 days. If for any reason such rate is not available, the term "LIBOR" shall mean the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on the Reuters Screen LIBOR Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the date the Class A Note is issued for a term of 30 days; provided, however, if more than one rate is specified on the Reuters Screen LIBOR Page, the applicable rate shall be the arithmetic mean of all such rates.
Appears in 1 contract
Sources: Limited Partnership Agreement (United Dominion Realty Trust Inc)
Redemption Right. (a) Subject to Section 7.4(b8.04(c) and Section 7.4(c), and the provisions of any agreements agreement between the Partnership and one or more Limited Partners, beginning on the date that is twelve months after the date of issuance of any Common Units (including any Common Units that are issued upon the conversion of LTIP Units), each Limited Partner (other than the General Partner or any Subsidiary of the General Partner) shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner Partner’s Common Units at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to c/o the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Redeeming Limited Partner”), and such notice shall be irrevocable unless otherwise agreed upon by the General Partner. No Limited Partner may deliver more than one Notice of Redemption during each calendar quarter unless otherwise agreed upon by the General Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Limited Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Common Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a)8.04(a) hereof, in the event if a Limited Partner elects to exercise exercises the Redemption RightRight by delivering to the Partnership a Notice of Redemption, then the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire some or all of, and in such event the General Partner agrees to purchase and acquire, such Common Units by paying to the Redeeming Limited Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by whereupon the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, Partner shall acquire the Common Partnership Units offered tendered for redemption by the Redeeming Limited Partner and the General Partner shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company Partner shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b)preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner's ’s exercise of the Redemption Right, and each of the Redeeming Limited Partner, the Partnership, Partnership and the Company General Partner shall treat the transaction between the Company General Partner and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner's ’s Common Partnership Units to the Company or its AffiliatesGeneral Partner for federal income tax purposes. Each Redeeming Limited Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company General Partner may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(aSections 8.04(a) and Section 7.4(b)8.04(b) hereof, a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if the delivery of REIT Common Shares to such Limited Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company General Partner pursuant to Section 7.4(b8.04(b) hereof (regardless of whether or not the General Partner would in fact exercise its rights under Section 8.04(b)) would be prohibited under the Articles of Incorporation of the Company, as amended (i) result in such Limited Partner or restated from time to time. Without limiting the effect of the preceding sentence, no any other Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation Articles) owning, directly or indirectly, REIT Shares in excess of the CompanyStock Ownership Limit or any Excepted Holder Limit (each as defined in Articles) and calculated in accordance therewith, except as amended or restated from time provided in the Articles, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to timeany rules of attribution), (iii) more than 9.8% result in the General Partner being “closely held” within the meaning of Section 856(h) of the total number of issued and outstanding REIT Common SharesCode, unless waived by (iv) cause the board of directors General Partner to own, actually or constructively, 10% or more of the Company ownership interests in a tenant (other than a TRS) of the General Partner’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause the General Partner to fail to qualify as a REIT under the Code, or (vi) cause the acquisition of REIT Shares by such Limited Partner to be “integrated” with any other distribution of REIT Shares or Common Units for purposes of complying with the registration provisions of the Securities Act. The General Partner, in its sole and absolute discretion. To , may waive the extent any attempted restriction on redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in this Section 7.4(a) or 7.4(b8.04(c).
(d) Each Redeeming Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered tendered for redemption shall pursuant to this Section 8.04 will be delivered to the Partnership, Partnership or the Company or its Affiliates, as the case may be, General Partner free and clear of all liens andliens, notwithstanding anything herein contained claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to the contrarysuch Common Units, neither the General Partner, the Company (nor any of its Affiliates) Partnership nor the Partnership General Partner shall be under any obligation to acquire such Common Partnership Units which are pursuant to Section 8.04(a) or may be subject to any liensSection 8.04(b) hereof. Each Redeeming Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the Partnership or the General Partner, Partnership or the Company, such Redeeming Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued Any Cash Amount to be paid to a Redeeming Limited Partner pursuant to this Section 7.4(b8.04 shall be paid on the Specified Redemption Date; provided, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the General Partner to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Share Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, the General Partner agrees to use its commercially reasonable efforts to cause the closing of the acquisition of redeemed Common Units hereunder to occur as quickly as reasonably possible.
(f) may contain such legends regarding restrictions on transfer as Notwithstanding any other provision of this Agreement, the Company in good faith General Partner is authorized to take any action that it determines to be necessary or advisable in order appropriate to (1) cause the General Partner and the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Redeeming Limited Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership, the General Partner or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units, and such Redeeming Limited Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(g) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights as and if deemed necessary or reasonable to qualify ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the Partnership being treated as a REIT“publicly traded partnership” under Section 7704 of the Code.
Appears in 1 contract
Sources: Limited Partnership Agreement (Cherry Hill Mortgage Investment Corp)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and on or after a Limited Partner's Specified Redemption Date, such Limited Partner, other than the provisions of any agreements between the Partnership and one or more Limited PartnersGeneral Partner, each Limited Partner shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the CompanyGeneral Partner's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or and (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee Assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 7.4, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Limited Partner's Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Neither the Redeeming Partner nor any permitted or purported assignee Assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company Partner (in its sole and absolute discretion), ) on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, General Partner shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company Partner (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any no obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.the
Appears in 1 contract
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner, other than Ashford OP Limited Partner LLC, shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price per Common Partnership Unit equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one sixty (160) year days (the "“Payout Period"”) following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "“Redeeming Partner"”). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's ’s exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's ’s annual dividend rate on REIT Common Shares for the prior twelve (12) month periodperiod prior to the Valuation Date and based upon the Cash Amount for Common Partnership Units redeemed, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event if a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's ’s exercise of the Redemption Right. In the event If the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), except as provided in the following paragraph, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's ’s exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's ’s Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder stockholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder stockholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Datesuch Common Partnership Units are presented for redemption. If such shareholder stockholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end earliest of what (i) ten (10) days after stockholders have voted against the Payout Period would have been had the General Partner, as directed by the Company not elected to pay issuance of the REIT Common Share Amount upon the Shares, or (ii) one hundred and thirty (130) days after such Common Partnership Units are presented for redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or Section 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event if any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Agreement of Limited Partnership (Ashford Hospitality Trust Inc)
Redemption Right. (a) Subject to Section 7.4(bSections 8.6(b) and Section 7.4(c8.6(c), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner Partner, other than any Affiliate Limited Partner, shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner purchases the Partnership Units subject to the Notice of Redemption pursuant to Section 8.6(b). A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any Partnership distributions paid on or after the Specified Redemption Date, except in the event that the Specified Redemption Date occurs after a Partnership Record Date and prior to the payment of the distribution of Available Cash relating to such Partnership Record Date. Each Redeeming The Assignee of any Limited Partner agrees may exercise the rights of such Limited Partner pursuant to provide such representations and related indemnities regarding good and unencumbered titlethis Section 8.6, and such Limited Partner shall be deemed to execute have assigned such documents, as rights to such Assignee and shall be bound by the General Partner may reasonably require in exercise of such rights by such Assignee. In connection with any redemptionexercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
(b) Notwithstanding the provisions of Section 7.4(a8.6(a), in the event a Limited Partner elects to exercise that exercises the Redemption Right, Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the General Partner at and the direction of the Company, directly or indirectly through one or more Affiliates, General Partner may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company Partner (in its sole and absolute discretion), on the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, General Partner shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.6(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five (5) Business Days after the receipt by the General Partner of such Notice of Redemption. Unless the General Partner, as directed by the Company Partner (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy purchase Partnership Units from the Redemption RightRedeeming Partner pursuant to its right to purchase Partnership Units under this Section 8.6(b), neither the General Partner nor the Company itself shall not have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption RightRight except as expressly provided to the contrary herein. In the event the General Partner, as directed by the Company Partner shall exercise its right to satisfy purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 7.4(b8.6(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the such Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company General Partner shall treat the transaction between the Company General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its AffiliatesGeneral Partner. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company General Partner may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner The Partnership shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted redeem for cash any Partnership Interest held by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner Partner, other than Ashford OP Limited Partner, LLC, shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one sixty (160) year days (the "“Payout Period"”) following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "“Redeeming Partner"”). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's ’s exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's ’s annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's ’s exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's ’s exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's ’s Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Datesuch Common Partnership Units are presented for redemption. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end earliest of what (i) ten (10) days after shareholders have voted against the Payout Period would have been had the General Partner, as directed by the Company not elected to pay issuance of the REIT Common Share Amount upon the Shares, or (ii) one hundred and thirty (130) days after such Common Partnership Units are presented for redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Agreement of Limited Partnership (Ashford Hospitality Trust Inc)
Redemption Right. (a) Subject to Section 7.4(b8.04(c) and Section 7.4(c), and the provisions of any agreements agreement between the Partnership and one or more Limited Partners, beginning on the date that is twelve months after the date of issuance of any Common Units (including any Common Units that are issued upon the conversion of LTIP Units), each Limited Partner (other than the General Partner or any Subsidiary of the General Partner) shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner Partner’s Common Units at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to Parent REIT) by the Limited Partner who is exercising the Redemption Right (the “Redeeming Limited Partner”), and such notice shall be irrevocable unless otherwise agreed upon by the General Partner. In such event, the Partnership shall deliver the Cash Amount to the Redeeming Limited Partner. Notwithstanding the foregoing, the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Common Units subject to the Notice of Redemption pursuant to Section 8.04(b) hereof. No Limited Partner may deliver more than [one] Notice of Redemption during each calendar [quarter] unless otherwise agreed upon by the Redeeming General Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Limited Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Common Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a)8.04(a) hereof, in the event if a Limited Partner elects to exercise exercises the Redemption RightRight by delivering to the Partnership a Notice of Redemption, then the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, Partnership may, in its sole and absolute discretion, elect to assume cause Parent REIT to purchase directly and satisfy a Redemption Right acquire some or all of, and in such event Parent REIT agrees to purchase and acquire, such Common Units by paying to the Redeeming Limited Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company Partner (in its sole and absolute discretion), ) on the Specified Specific Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with whereupon Parent REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered tendered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless In the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership event Parent REIT purchases Common Units with respect to the Redeeming Partner's exercise of the a Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner's ’s exercise of the such Redemption Right, and each of the Redeeming Limited Partner, the Partnership, Partnership and the Company Parent REIT shall treat the transaction between the Company Parent REIT and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner's ’s Common Partnership Units to the Company or its AffiliatesParent REIT for federal income tax purposes. Each Redeeming Limited Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company Parent REIT may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(aSections 8.04(a) and Section 7.4(b)8.04(b) hereof, a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if the delivery of REIT Common Shares to such Limited Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company Parent REIT pursuant to Section 7.4(b8.04(b) hereof (regardless of whether or not Parent REIT would in fact exercise its rights under Section 8.04(b)) would be prohibited under the Articles of Incorporation of the Company, as amended (i) result in such Limited Partner or restated from time to time. Without limiting the effect of the preceding sentence, no any other Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation Charter) owning, directly or indirectly, REIT Shares in excess of the CompanyStock Ownership Limit or any Excepted Holder Limit (each as defined in the Charter) and calculated in accordance therewith, except as amended or restated from time provided in the Charter, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to timeany rules of attribution), (iii) more than 9.8% result in Parent REIT being “closely held” within the meaning of Section 856(h) of the total number of issued and outstanding Code, (iv) cause Parent REIT Common Sharesto own, unless waived by the board of directors actually or constructively, 10% or more of the Company ownership interests in a tenant (other than a TRS) of Parent REIT’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause Parent REIT to fail to qualify as a REIT under the Code, or (vi) cause the acquisition of REIT Shares by such Limited Partner to be “integrated” with any other distribution of REIT Shares or Common Units for purposes of complying with the registration provisions of the Securities Act. Parent REIT, in its sole and absolute discretion. To , may waive the extent any attempted restriction on redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in this Section 7.4(a) or 7.4(b8.04(c).
(d) Each Redeeming Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered tendered for redemption shall pursuant to this Section 8.04 will be delivered to the Partnership, Partnership or the Company or its Affiliates, as the case may be, General Partner free and clear of all liens andliens, notwithstanding anything herein contained claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to the contrarysuch Common Units, neither the General Partner, the Company (Partnership nor any of its Affiliates) nor the Partnership Parent REIT shall be under any obligation to acquire such Common Partnership Units which are pursuant to Section 8.04(a) or may be subject to any liensSection 8.04(b) hereof. Each Redeeming Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the CompanyParent REIT, such Redeeming Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued Any Cash Amount to be paid to a Redeeming Limited Partner pursuant to this Section 7.4(b8.04 shall be paid on the Specified Redemption Date; provided that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for Parent REIT to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Shares Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, Parent REIT agrees to use its commercially reasonable efforts to cause the closing of the acquisition of redeemed Common Units hereunder to occur as quickly as reasonably possible.
(f) may contain such legends regarding restrictions on transfer as Notwithstanding any other provision of this Agreement, the Company in good faith General Partner is authorized to take any action that it determines to be necessary or advisable in order appropriate to (1) cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Redeeming Limited Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership, Parent REIT or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units, and such Redeeming Limited Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(g) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights as and if deemed necessary or reasonable to qualify ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the Partnership being treated as a REIT“publicly traded partnership” under Section 7704 of the Code.
Appears in 1 contract
Sources: Limited Partnership Agreement (Global Medical REIT Inc.)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership Company, the Partnership, EDR or any Affiliate thereof and one or more Limited PartnersMembers, each Limited Partner Member (other than the Manager) shall have the right (the "“Redemption Right"”) to require the Partnership Company to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner Member at a redemption price equal to and in the form of the Cash Amount to be paid by the PartnershipCompany in cash or REIT Common Shares. The Partnership Company shall have up until five Business Days following the time that it receives from the Partnership pursuant to one (1Section 6.4(b) year (the "“Payout Period"”) following exercise of a Redemption Right the consideration from the Associated Partnership Units (as defined in Section 6.4(b) below) to pay redeem the Cash Amount to Units offered for redemption from the Limited Partner Member (the “Redeeming Member”) who is exercising the Redemption Right. If, pursuant to the Partnership Agreement, the Company receives REIT Common Shares in redemption right (or sale of some or all of the "Associated Partnership Units tendered pursuant to Section 6.4(b), then the Company may pay all or any portion of the unpaid Cash Amount payable to the Redeeming Partner")Member with REIT Common Shares having a Value equal to such portion of the unpaid Cash Amount. From and after the Specified Redemption Date, A Redeeming Member shall also be entitled to receive any interest on the Cash Amount (whether paid in cash or portion thereofREIT Common Shares) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at that is paid by the rate equal to Partnership, EDR or any Affiliate thereof on the lower of (i) the Company's annual dividend rate on cash or REIT Common Shares for distributed or paid to the prior twelve (12) month period, Partnership in connection with the redemption or (ii) eight percent (8%) per annum, until sale of the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAssociated Partnership Units. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Company by the Redeeming PartnerMember. Following its receipt of a Notice of Redemption, the Company shall promptly exercise its right, to the extent it has the right under the Partnership Agreement, to redeem the applicable Associated Partnership Units. A Limited Partner Member may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner Member holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such PartnerMember. Moreover, a Limited Partner Member may not exercise the Redemption Right more than once per calendar quarter, PROVIDEDprovided, HOWEVERhowever, that the General Partner Manager may amend this Section 7.4(a6.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners Members to not less than once per calendar year. Neither the Redeeming Partner Member nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner Member shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner Member agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner Manager may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event If a Limited Partner elects to exercise the Redeeming Member exercises its Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by then the Company shall exercise its redemption right under the Partnership Agreement with respect to satisfy a number of Partnership Units (the Redemption Right in “Associated Partnership Units”) that are redeemable under the manner described in Partnership Agreement for an amount of cash equal to the first sentence of this Section 7.4(b), Cash Amount for the Units that the Redeeming Member has elected to redeem and the Partnership shall have no obligation to pay any amount to the Redeeming Partner Cash Amount with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's cash or REIT Common Partnership Units Shares that are paid or distributed to the Company in connection with the redemption or its Affiliatessale of such Associated Partnership Units. Each Redeeming Partner Member agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company EDR may reasonably require in connection with the issuance or transfer of REIT Common Shares to the Redeeming Member, upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner Member shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner Member covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General PartnerManager, the Company EDR (nor any of its Affiliates) nor the Partnership Company shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner Member further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner Member shall assume and pay such transfer tax.
(ed) REIT Common Shares issued delivered to a Redeeming Member pursuant to this Section 7.4(b) 6.4 may contain such legends regarding restrictions on transfer as the Company EDR in good faith determines to be necessary or advisable in order to (1i) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2ii) protect the ability of the Company EDR to continue to qualify as a REITreal estate investment trust.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Education Realty Trust, Inc.)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner, other than Ashford Prime OP Limited Partner LLC, shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner (the “Redeeming Partner”) at a redemption price per Common Partnership Unit equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after on the Specified Redemption Date, . In connection with the Cash Amount (or portion thereof) due and payable to exercise of the Redemption Right by a Redeeming Partner, such Redeeming Partner with respect shall promptly deliver to the Company any shares of Series C Preferred Stock held by such Redeeming Partner's , but only if and to the extent that, after giving effect to the exercise of its the Redemption Right shall bear interest at Right, the rate equal to aggregate number of shares of Series C Preferred Stock held by such Redeeming Partner would exceed the lower product of (ix) the Company's annual dividend rate aggregate number of Partnership Units then held by such Redeeming Partner multiplied by (y) the Conversion Factor in effect on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion date thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one two thousand (1,0002,000) Common Partnership Units or, if such Limited Partner holds less than one two thousand (1,0002,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event if a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that if the Company may defer payment of General Partner has not affirmatively notified the Redeeming Partner on or before one Business Day before the Specified Redemption Date that either the Partnership, the General Partner or its Affiliates will pay the Cash Amount until then the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount General Partner shall bear interest as described in Section 7.4(a))be deemed to have elected, and provideddirectly or through one or more Affiliates, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal Amount to the Redeeming Partner on the Specified Redemption Date, and the Company agrees that it will provide such portion REIT Common Shares on the Specified Redemption Date, subject to the other provisions of the Cash Amount plus any accrued but unpaid interest thereonthis Section 7.4. On any such electionelection of the General Partner to assume and satisfy a Redemption Right, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, or unless the General Partner has been deemed to assume the Redemption Right as provided in this Section 7.4(b), neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's ’s exercise of the Redemption Right. In the event If the General Partner, as directed by the Company Company, shall exercise its right right, or shall be deemed to have elected, to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), except as provided in the following paragraph, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's ’s exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's ’s Common Partnership Units to the Company or its Affiliates; provided that if the Redeeming Partner is redeeming all of its Common Partnership Units, the Partnership shall redeem any fractional Common Partnership Unit (constituting less than one Common Partnership Unit owned by the Redeeming Partner by paying the Cash Amount with respect to such fractional Common Partnership Unit to such Redeeming Partner. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash AmountShares, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash AmountRedemption Right, as provided above, should the General Partner, as directed by the Company elect elect, or be deemed to elect, to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder stockholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty eighty (120180) days beyond the Specified Redemption Date in which to obtain such shareholder stockholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: fifteen (i) ten (1015) days after shareholder stockholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay . If such Redeeming Partner the Cash Amount; or (iii) stockholder approval is not obtained within one hundred and thirty ninety (130190) days after such Common Partnership Units are presented for redemption or the Specified Redemption Date. If such shareholder approval is not obtainedstockholders have voted against the issuance of the REIT Common Shares, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end earlier of what (i) fifteen (15) days after stockholders have voted against the Payout Period would have been had the General Partner, as directed by the Company not elected to pay issuance of the REIT Common Share Amount upon the Shares, or (ii) one hundred ninety (190) days after such Common Partnership Units are presented for redemption, together with interest on such Cash Amount as specified in Section 7.4(aat the rate equal to the lesser of (i) hereofthe Company’s annual dividend rate on REIT Common Shares for the twelve (12) month period prior to the Valuation Date and based upon the Cash Amount for Common Partnership Units redeemed, or (ii) eight percent (8%).
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or Section 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event if any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Limited Partnership Agreement (Ashford Hospitality Prime, Inc.)
Redemption Right. (a) A. Subject to the limitations set forth herein and in Section 7.4(b) 8.6.B, Section 8.6.C and Section 7.4(c)11.7 below, and on or after the provisions of any agreements between the Partnership and one or more Limited PartnersEffective Date, each Limited Partner shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held owned by such Limited Partner (a "Redeeming Partner") at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerAPF) by the Redeeming Partner, accompanied by any certificate or certificates evidencing the Partnership Units to be exchanged; provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if APF elects to purchase the Partnership Units subject to the Notice of Redemption pursuant to Section 8.6.B below. A In addition to the restrictions on redemption set forth in Section 11.7 below, a Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Limited Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the No Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed exchanged to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) B. Notwithstanding the provisions of Section 7.4(a)8.6.A above, in the event a Limited Partner elects to exercise that exercises the Redemption RightRight shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to APF, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, and APF may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Partner either (i) an amount of cash equal to the Cash Amount, as provided for in Section 7.4(a)(ii) a number of REIT Shares equal to the REIT Shares Amount, or (iii) any combination of (i) or (ii) above, with the REIT Common Shares Amountdecision as to the type of consideration to be given to the Redeeming Partner to be made by APF, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, whereupon APF shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall transfer the Partnership Units to the General Partner which shall be treated for all purposes of this Agreement as the owner of (and a Substituted Limited Partner with respect to) such Common Partnership Units. If APF shall elect to exercise its right to pur- chase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five (5) Business Days after the receipt by APF of such Notice of Redemption. If APF elects to pay all or any portion of the consideration to a Redeeming Partner in cash, APF agrees to use its best efforts to raise any required funds as quickly as possible after receipt by APF of the Notice of Redemption. Unless the General Partner, as directed by the Company APF (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy purchase Partnership Units from the Redemption RightRedeeming Partner pursuant to this Section 8.6.B, neither the General Partner nor the Company itself APF shall not have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company APF shall exercise its right to satisfy purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 7.4(b)8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the such Redemption Right, and each of the Redeeming Partner, the Partnership, and APF, as the Company case may be, shall treat the transaction between the Company APF and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its AffiliatesAPF. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company General Partner and APF may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If .
C. Notwithstanding anything to the Redemption Right is satisfied by contrary contained in Sections 8.6.A and 8.6.B above, to the extent that the delivery of REIT Common Shares, Shares to a Redeeming Partner pursuant to Section 8.6.B above would cause the Redeeming Partner to violate the applicable "Ownership Limit" or the "Existing Holder Limit" set forth in the Articles of Incorporation, would otherwise violate the "Ownership and Transfer Limitations" set forth in Section 5.5(ii) of the Articles of Incorporation, or would create a condition in which some or all such REIT Shares would be "Excess Shares" under the Articles of Incorporation, APF shall be deemed entitled to become a holder of exercise its rights under Section 8.6.B above, provided that in such event APF may not deliver REIT Common Shares as of to such Redeeming Partner but may, in its sole and absolute discretion, elect to either (1) pay the close of business on consideration to the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that Redeeming Partner in the Company delivers REIT Common Shares in satisfaction of a deferred payment form of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii2) one hundred and thirty (130) days after refuse, in whole or in part, to accept the Specified Redemption DateNotice of Redemption. If such shareholder approval is not obtainedIn addition, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding notwithstanding the provisions of Section 7.4(a) Sections 8.6.A and Section 7.4(b)8.6.B, a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if (but only as long as) the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended applicable federal or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REITor regulations.
Appears in 1 contract
Sources: Limited Partnership Agreement (CNL American Properties Fund Inc)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners, each Limited Partner shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "“Payout Period"”) following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "“Redeeming Partner"”). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's ’s exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's ’s annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's ’s exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's ’s exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's ’s Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Agreement of Limited Partnership (Education Realty Trust, Inc.)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c2.1(c), and (i) on or after the provisions date that is two (2) years after the date of any agreements between the this Agreement, each Contributing Partnership and one or more Limited Partners, each Summerfield Limited Partner who holds "Two Year Lock-up Units" and (ii) on or after the date that is one year after the date of this Agreement each Summerfield Limited Partner who holds "One Year Lock-up Units" shall have the right (the "Redemption Right") to require tender to the REIT Partnership to redeem for redemption on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Contributing Partnership or Summerfield Limited Partner at a redemption price equal to and in the form of the Cash Redemption Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount submitting to the REIT Partnership a Notice of Redemption; provided, however, that the number of Partnership Units tendered for redemption by all Contributing Partnerships and Summerfield Limited Partner who is exercising Partners on any Specified Redemption Date shall not exceed three percent (3%) of the redemption right (total number of Common Partnership Units and preferred partnership units of the "Redeeming Partner"). From and after the REIT Partnership outstanding on such Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the General Partner by the Contributing Partnership or Summerfield Limited Partner who is exercising the Redemption Right (with a copy the "Redeeming Partner"); provided, however, that no Contributing Partnership or Summerfield Limited Partner may deliver to the General PartnerPartner more than one (1) by Notice of Redemption during each calendar quarter. If more than one Contributing Partnership or Summerfield Limited Partner exercises the Redemption Right (each, a "Redeeming Partner") to the effect that the number of Partnership Units tendered for redemption on a Specified Redemption Date exceeds the percentage of Partnership Units specified in the preceding sentence, the number of Partnership Units that may be tendered for redemption by each Redeeming Partner shall be reduced proportionally based on the ratio the number of Partnership Units tendered for redemption by each Redeeming Partner bears to the total number of Partnership Units tendered for redemption on such Specified Redemption Date. A Summerfield Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Summerfield Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Summerfield Limited Partner. MoreoverNotwithstanding the foregoing limitations on the exercise of the Redemption Right, if a Summerfield Limited Partner, as permitted by the Contribution Agreement or consented to by the General Partner may not in accordance with the REIT Partnership Agreement, pledges his Partnership Units to a third-party lender in accordance with the terms of the Contribution Agreements and such lender forecloses on such Partnership Units, such lender shall be entitled to exercise the Redemption Right more than once per calendar quarterwith respect to such Partnership Units, PROVIDEDas secured party on behalf of the Summerfield Limited Partner and without becoming a limited partner of the REIT Partnership, HOWEVER, that subject to the General Partner's prior receipt of such documentation as the General Partner may amend this Section 7.4(a) shall reasonably request evidencing the pledge and the lender's rights to limit the number of exercises of exercise the Redemption Right by with respect to the Limited Partners to not less than once per calendar yearPartnership Units. Neither Except as may be otherwise provided in Section 5.2(a) of the REIT Partnership Agreement, the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any rightnot be entitled, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units pursuant to the REIT Partnership Agreement if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as unless the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided redemption is made for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case and the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business not paid on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b2.1(c), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees In that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Redemption and Registration Rights Agreement (Innkeepers Usa Trust/Fl)
Redemption Right. (a) A. Subject to Section 7.4(bSections 8.6.B and 8.6.C, on or after the date one (1) and Section 7.4(c), and year after the provisions closing of any agreements between the Partnership and one or more Limited Partnersinitial public offering of REIT Shares by the Gables Trust, each Limited Partner Partner, other than the General Partner, shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner (other than Series B Preferred Units which such Units shall have only those Redemption Rights set forth in Exhibit F, attached hereto) at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner. "); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the Gables Trust and/or the General Partner elects to purchase the Partnership Units subject to the Notice of Redemption pursuant to Section 8.6.B. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid on or after the Specified Redemption Date. Each Redeeming The Assignee of any Limited Partner agrees may exercise the rights of such Limited Partner pursuant to provide such representations and related indemnities regarding good and unencumbered titlethis Section 8.6, and such Limited Partner shall be deemed to execute have assigned such documents, as rights to such Assignee and shall be bound by the General Partner may reasonably require in exercise of such rights by such Assignee. In connection with any redemptionexercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
(b) B. Notwithstanding the provisions of Section 7.4(a)8.6.A, in the event a Limited Partner elects to exercise that exercises the Redemption Right, Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the General Partner at and the direction Gables Trust, and either of the Company, directly General Partner or indirectly through one the Gables Trust (or more Affiliates, both) may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by Partner or the Company Gables Trust (in its sole and absolute discretion), on the Specified Redemption Date, provided that whereupon the Company may defer payment of General Partner or the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, Gables Trust shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. If the General Partner and/or the Gables Trust shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, they shall so notify the Redeeming Partner within five Business Days after the receipt by the General Partner of such Notice of Redemption. Unless the General Partner, as directed by Partner and/or the Company Gables Trust (in its their sole and absolute discretion), ) shall exercise its right to assume directly and satisfy purchase Partnership Units from the Redemption RightRedeeming Partner pursuant to this Section 8.6.B, neither the General Partner nor the Company itself Gables Trust shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by Partner or the Company Gables Trust shall exercise its right to satisfy purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 7.4(b)8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the such Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company General Partner or the Gables Trust, as the case may be, shall treat the transaction between the Company General Partner or the Gables Trust, as the case may be, and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company General Partner or its Affiliatesthe Gables Trust, as the case may be. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company General Partner may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) C. Notwithstanding the provisions of Section 7.4(a) 8.6.A and Section 7.4(b)8.6.B, a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right pursuant to Section 8.6.A if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company General Partner or the Gables Trust pursuant to Section 7.4(b8.6.B (regardless of whether or not the General Partner or the Gables Trust would in fact exercise its rights under Section 8.6.B) would be prohibited under the Articles Declaration of Incorporation Trust or would violate any federal or state securities laws.
D. In connection with a redemption by Gables Trust of any or all of the CompanyGables Trust Series A Preferred Shares, the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series A Preferred Units that the Gables Trust and/or the General Partner holds, and such redemption proceeds shall be distributed to the Gables Trust and/or the General Partner, as amended applicable, pursuant to the provisions of Section 5.1(b).
E. In connection with a redemption by Gables Trust of any or restated from time to time. Without limiting the effect all of the preceding sentence, no Person shall Gables Trust Series B Preferred Shares that may at any time be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, (in accordance with the terms set forth in Section 7.4(a) or 7.4(bof the Series B Preferred Units).
(d) Each Limited Partner covenants and agrees with , the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series B Preferred Units that all Common Partnership Units delivered for Gables Trust and/or the General Partner then holds, and such redemption proceeds shall be delivered distributed to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither Gables Trust and/or the General Partner, as applicable, in an amount equal to the Company (nor portion of the Gables Trust's and the General Partner's Adjusted Capital Account balance attributable to such units being redeemed, after adjusting such Capital Accounts pursuant to the provisions of Section 13.2.
F. In connection with a redemption by Gables Trust of any or all of its Affiliates) nor the Gables Trust Series C Preferred Shares, the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series C Preferred Units that the Gables Trust and/or the General Partner holds, and such redemption proceeds shall be under any obligation distributed to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to Gables Trust and/or the General Partner, Partnership as applicable, pursuant to the provisions of Section 5.1(b).
G. In connection with a redemption by Gables Trust of any or all of the CompanyGables Trust Series C-1 Preferred Shares, such Limited the General Partner shall assume have the right to cause the Partnership to redeem all or a portion of the Series C-1 Preferred Units that the Gables Trust and/or the General Partner holds, and pay such transfer taxredemption proceeds shall be distributed to the Gables Trust and/or the General Partner, as applicable, pursuant to the provisions of Section 5.1(b).
H. In connection with a redemption by Gables Trust of any or all of the Gables Trust Series Z Preferred Shares, the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series Z Preferred Units that the Gables Trust and/or the General Partner holds, and such redemption proceeds shall be distributed to the Gables Trust and/or the General Partner, as applicable, pursuant to the provisions of Section 5.1(c).
I. In connection with a redemption by the Partnership of any or all of the Series B Preferred Units that may at any time be issued and outstanding and not held by Gables Trust (e) REIT Common Shares issued in accordance with the terms of the Series B Preferred Units as set forth in Exhibit F hereto), the General Partner shall have the right to cause the Partnership to distribute to the holders of the Series B Preferred Units being redeemed an amount equal to the aggregate Series B Liquidation Preference with respect to such Units as determined pursuant to Section 7.4(b13.2 hereof, without regard to the requirements of Section 13.2(A)(iv) may contain with respect to distributions to holders of the Series A Preferred Units, the Series C Preferred Units or the Series C-1 Preferred Units (or any other then outstanding Units or Shares ranking on a parity thereto), to the extent that at the time of such legends regarding restrictions on transfer as redemption the Company in good faith determines to be necessary or advisable in order to terms of (1) comply with restrictions on transfer under the Securities Act Series A Preferred Units and applicable state securities laws and the Gables Trust Series A Preferred Shares, (2) protect the ability terms of the Company to continue to qualify as Series C Preferred Units and the Gables Trust Series C Preferred Shares and (3) the terms of the Series C-1 Preferred Units and the ▇▇▇▇▇ Trust Series C-1 Preferred Shares (and of any other then outstanding Units or Shares ranking on a REIT.parity thereto) permit a redemption of the Series B Preferred Units only. ARTICLE 9
Appears in 1 contract
Sources: Limited Partnership Agreement (Gables Realty Limited Partnership)
Redemption Right. (a) Subject to Section 7.4(b) and Section 7.4(c), and on or after a Limited Partner's Specified Redemption Date, such Limited Partner, other than the provisions of any agreements between the Partnership and one or more Limited PartnersGeneral Partner, each Limited Partner shall have the right (the "Redemption Right") to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the CompanyGeneral Partner's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or and (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee Assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 7.4, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Limited Partner's Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Neither the Redeeming Partner nor any permitted or purported assignee Assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption. Notwithstanding anything to the contrary contained in this Section 7.4(a), any Limited Partner that owns directly or indirectly, or is deemed to own, directly or indirectly, any Person (other than an individual), that is serving as an eligible independent contractor (as defined in the Code) of the Partnership or of the General Partner, shall be entitled to exercise a Redemption Right only with respect to that number of Common Partnership Units such that, if redeemed for only the REIT Common Shares Amount pursuant to Section 7.4(b) hereof, such Limited Partner would Beneficially Own (as hereinafter defined) no more than 9.9% of the total number of issued and outstanding REIT Common Shares; but the limitation set forth in this paragraph will not apply if either (i) the General Partner receives an opinion from its counsel that violation of this limitation will not jeopardize the REIT status of the General Partner or (ii) a transfer or series of related transfers result in a sale of all or substantially all of the General Partner's or the Partnership's assets, or result in a sale, merger, reorganization or restructuring, as described in Sections 9.1(c) and 9.1(d) hereof.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company Partner (in its sole and absolute discretion), ) on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, General Partner shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company Partner (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any no obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company Partner shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company General Partner shall treat the transaction between the Company General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its AffiliatesGeneral Partner. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company General Partner may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may beDate. Notwithstanding anything to the contrary in Section 7.4(a7.1(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company Partner elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company General Partner shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date Date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company Partner elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Datesuch Common Partnership Units are presented for redemption. If such shareholder approval is not obtained, the General Partner or the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company Partner not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company General Partner pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to timeGeneral Partner. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to timeGeneral Partner) more than 9.89.9% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, Partnership or the Company or its AffiliatesGeneral Partner, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) Partner nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the CompanyGeneral Partner, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Agreement of Limited Partnership (Boykin Lodging Co)
Redemption Right. (a) A. Subject to Section 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners6.6.B, each Limited Partner entitled to a Preferred Return, shall have the right (the "Redemption RightREDEMPTION RIGHT") to require the Partnership to redeem (and the Partnership shall redeem) on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the "Redeeming Partner"); PROVIDED, HOWEVER, that the Partnership shall not be obligated to satisfy such Redemption Right if Merry Land and/or the General Partner elects to purchase (and completes the purchase of) the Partnership Units subject to the Notice of Redemption pursuant to Section 6.6.B. Upon the issuance of any additional Partnership Units issued under Section 2.2, the General Partner may limit the Redemption Rights with respect to such Partnership Units by written agreement with the purchaser or subscriber of such Units for a defined time period following the issuance of such Partnership Units. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any Partnership distributions paid for which the Partnership Record Date falls on or after the Specified Redemption Date. Each , however, the Redeeming Partner agrees to provide such representations shall be deemed the owner of REIT Shares and related indemnities regarding good and unencumbered title, and to execute such documents, as rights on the Specified Redemption Date if the General Partner or Merry Land exercises the option under Section 6.6.B and elects to pay the Redeeming Partner the REIT Shares Amount. The Assignee of any Limited Partner may reasonably require in connection with exercise the rights of such Limited Partner pursuant to this Section 6.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. Upon the occurrence of a Liquidating Event, at least twenty (20) Business Days before making any redemptionliquidating distributions to Partners under Section 11.2.A, the Liquidator shall give to all Limited Partners having a Redemption Right notice that such Limited Partners may deliver to the Liquidator within ten (10) Business Days a Notice of Redemption designating a Specified Redemption Date of no later than twenty Business Days after the notice from the Liquidator.
(b) B. Notwithstanding the provisions of Section 7.4(a)6.6.A, in the event a Limited Partner elects to exercise that exercises the Redemption Right, Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the General Partner at and Merry Land, and either the direction of the Company, directly General Partner or indirectly through one Merry Land (or more Affiliates, both) may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company Partner or Merry Land (in its sole and absolute discretion), on the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all General Partner or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, Merry Land shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless If the General Partner, as directed by the Company (in its sole and absolute discretion), Partner and/or Merry Land shall elect to exercise its right to assume directly and satisfy purchase Partnership Units under this Section 6.6.B with respect to a Notice of Redemption, it shall so notify the Redemption Right, neither Redeeming Partner within five Business Days after the receipt by the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the such Notice of Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), and the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the such Redemption Right, and each . Each of the Redeeming Partner, the Partnership, and the Company General Partner or Merry Land shall treat the transaction between the Company General Partner or Merry Land and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership Partner or the Company, such Limited Partner shall assume and pay such transfer taxMerry Land.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
Appears in 1 contract
Sources: Limited Partnership Agreement (Merry Land & Investment Co Inc)
Redemption Right. (a) Subject to Section 7.4(bSections 8.04(b), 8.04(c), 8.04(d), 8.04(e) and Section 7.4(c8.04(f), and the provisions of any agreements between the Partnership and one or more Limited PartnersPartners with respect to Partnership Units held by them and any restriction agreed to in writing between the Redeeming Limited Partner and the Company or the General Partner, each Limited Partner Partner, other than the Company or the General Partner, shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units that have been held by such Limited Partner for at least one year (or such lesser time as determined by the General Partner in its sole and absolute discretion) at a redemption price equal to and in the form of the Cash Redemption Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption (a form of which as attached as Exhibit C) delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Redeeming Limited Partner”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the Company elects to purchase the Partnership Units subject to the Notice of Redemption; and provided, further, that no Limited Partner may deliver more than two Notices of Redemption during each calendar year. A Without the consent of the General Partner, a Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common 1,000 Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common 1,000 Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a8.04(a), in the event a Limited Partner elects to exercise that exercises the Redemption Right, Right shall be deemed to have offered to sell the General Partner at Partnership Units described in the direction Notice of Redemption to the Company, directly or indirectly through one or more Affiliates, and the Company may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Limited Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by If the Company (in its sole and absolute discretion), shall elect to exercise its right to assume directly and satisfy purchase Partnership Units under this Section 8.04(b) with respect to a Notice of Redemption, it shall so notify the Redemption Right, neither Redeeming Limited Partner within five Business Days after the receipt by the Company or the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Rightsuch Notice of Redemption. In the event the General Partner, as directed by the Company shall exercise its right to satisfy purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 7.4(b)Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner's ’s exercise of the such Redemption Right, and each of the Redeeming Limited Partner, the Partnership, the Company and the Company General Partner shall treat the transaction between the Company and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner's Common ’s Partnership Units to the Company or its AffiliatesCompany. Each Redeeming Limited Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a8.04(a) and Section 7.4(b8.04(b), a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b8.04(b) (regardless of whether or not the Company would in fact exercise its rights under Section 8.04(b)) would be prohibited (i) result in such Partner or any other person owning, directly or indirectly or under the Articles applicable attribution rules, REIT Shares in excess of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own Share Ownership Limitation (as defined in the Articles Declaration of Incorporation Trust) and calculated in accordance therewith, except as provided in the Declaration of Trust, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), (iii) result in the Company being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause the Company to own, directly or under the applicable constructive ownership rules, 10% or more of the ownership interests, by value or vote, in a tenant or subtenant of the Company’s, as amended the General Partner’s, the Partnership’s or restated from time to timea Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) more than 9.8% of the total number of issued and outstanding Code, other than a “taxable REIT Common Shares, unless waived by the board of directors subsidiary” of the Company or the General Partner within the meaning of Section 856(l) of the Code, provided that rents from such taxable REIT subsidiary qualify under Section 856(d)(8) of the Code, or (v) be likely to cause the acquisition of REIT Shares by such Partner to be “integrated” with any other distribution of REIT Shares or Partnership Units for purposes of complying with the registration provisions of the Securities Act. The Company or the General Partner may, in its sole and absolute discretion. To , waive the extent any attempted restriction on redemption for REIT Common Shares would be a violation of set forth in this Section 7.4(c)8.04(c) upon the receipt of a ruling from the Internal Revenue Service or an opinion of counsel or other evidence satisfactory to the Company or the General Partner confirming that the increased ownership of REIT Shares pursuant to the waiver will not result in the Company being “closely held” within the meaning of section 856(h) of the Code or cause any person or group of persons to own directly or indirectly 10 percent or more, it shall within the meaning of section 856(d)(2)(B)(i) or (ii) of the Code, of any tenant or subtenant of the Company’s, the General Partner’s, the Partnership’s or a Subsidiary Partnership’s real property (other than a “taxable REIT subsidiary,” as defined in section 856(l) of the Code, if the requirements of section 856(d)(8) of the Code are satisfied) if the Company anticipates that such direct or indirect ownership would cause more than [$ ] of the Company’s gross income during the current taxable year to be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with treated as nonqualifying income for the terms purposes of the 95% gross income test set forth in Section 7.4(a856(c)(2) or 7.4(b)of the Code.
(d) Each Any Cash Amount to be paid to a Redeeming Limited Partner covenants and agrees with pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner that all Common may elect to cause the Specified Redemption Date to be delayed for up to an additional 90 days to the extent required for the Company to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount. Notwithstanding the foregoing, the General Partner agrees to use its best efforts to cause the closing of the acquisition of redeemed Partnership Units delivered for redemption shall be delivered hereunder to the Partnership, the Company or its Affiliates, occur as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable quickly as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer taxreasonably possible.
(e) REIT Common Shares issued pursuant Notwithstanding any other provision of this Agreement, the General Partner is authorized to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith take any action that it determines to be necessary or advisable in order appropriate to (1) cause the Partnership to comply with restrictions on transfer any withholding requirements established under the Securities Act Code or any other federal, state or local law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit D or such other form as the General Partner may reasonably request. If the Company, the Partnership or the General Partner is required to withhold and applicable state securities laws pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units, and the Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(2f) protect Notwithstanding any other provision of this Agreement, the General Partner shall place such restrictions as it reasonably deems appropriate on the ability of the Company Limited Partners to continue exercise their Redemption Rights as and if deemed necessary to qualify ensure that the Partnership does not constitute a “publicly traded partnership” taxable as a REITcorporation under Section 7704 of the Code.
Appears in 1 contract
Redemption Right. (a) The provisions of this Section 7.3 shall only apply after the Exchange Date. Subject to Section 7.4(b7.3(b) and Section 7.4(c7.3(c), and the provisions of any agreements between the Partnership Company and one or more Limited PartnersMembers, each Limited Partner Member other than Ashford Inc., shall have the right (the "“Redemption Right"”) to require the Partnership Company to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner Member (the “Redeeming Member”) at a redemption price per Common Unit equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after Company on the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership Company (with a copy to the General PartnerManager) by the Redeeming PartnerMember. A Limited Partner Member may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner Member holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar yearMember. Neither the Redeeming Partner Member nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner Member shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption DateDate except as provided in Section 7.3(b). Each Redeeming Partner Member agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner Manager may reasonably require in connection with any redemption.
(b) The provisions of Section 7.3(b) may be applied by Manager, if Manager is Ashford Inc. or Ashford Inc. otherwise agrees. Notwithstanding the provisions of Section 7.4(a7.3(a), in the event if a Limited Partner Member elects to exercise the Redemption Right, the General Partner Manager at the direction of the CompanyAshford Inc., directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner Member either (i) the Cash Amount, as provided for in Section 7.4(a7.3(a), or (ii) the REIT Ashford Inc. Common Shares Stock Amount, as elected by the General PartnerManager, as directed by the Company Ashford Inc. (in its sole and absolute discretion), ) on the Specified Redemption Date, provided that if the Company may defer payment of Manager has not affirmatively notified the Redeeming Member on or before one Business Day before the Specified Redemption Date that either the Company, the Manager or its Affiliates will pay the Cash Amount until then the end of Manager shall be deemed to have elected, directly or through one or more Affiliates, to pay the Payout Period described in Section 7.4(a) (in which case Ashford Inc. Common Stock Amount to the Cash Amount shall bear interest as described in Section 7.4(a))Redeeming Member on the Specified Redemption Date, and providedAshford Inc. agrees that it will provide such Ashford Inc. Common Stock on the Specified Redemption Date, further, that subject to the Company may, if it has elected so to defer payment other provisions of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereonthis Section 7.3. On any such electionelection of the Manager to assume and satisfy a Redemption Right, the CompanyAshford Inc., directly or indirectly through one or more of its Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner Member and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General PartnerManager, as directed by the Company Ashford Inc. (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy the Redemption Right, or unless the Manager has been deemed to assume the Redemption Right as provided in this Section 7.3(b), neither the General Partner Manager nor the Company Ashford Inc. itself shall have any obligation to the Redeeming Partner Member or to the Partnership Company with respect to the Redeeming Partner's Member’s exercise of the Redemption Right. In If the event the General Partner, as directed by the Company Manager shall exercise its right right, or shall be deemed to have elected, to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b7.3(b), except as provided in the Partnership following paragraph, the Company shall have no obligation to pay any amount to the Redeeming Partner Member with respect to such Redeeming Partner's Member’s exercise of the Redemption Right, and each of the Redeeming PartnerMember, the PartnershipCompany, and the Company Ashford Inc. shall treat the transaction between the Company Ashford Inc. and the Redeeming Partner Member for federal income tax purposes as a sale of the Redeeming Partner's Member’s Common Partnership Units to the Company Ashford Inc. or its Affiliates; provided that if the Redeeming Member is redeeming all of its Common Units, the Company shall redeem any fractional Common Unit (constituting less than one Common Unit) owned by the Redeeming Member by paying the Cash Amount with respect to such fractional Common Unit to such Redeeming Member. Each Redeeming Partner Member agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company Ashford Inc. may reasonably require in connection with the issuance of REIT Ashford Inc. Common Shares Stock upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Ashford Inc. Common SharesStock, the Redeeming Partner Member shall be deemed to become a holder of REIT Ashford Inc. Common Shares Stock as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b7.3(b) that the Company Ashford Inc. delivers REIT Ashford Inc. Common Shares in satisfaction of a deferred payment of the Cash AmountStock, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a7.3(a) or this Section 7.4(b7.3(b), and in addition to the right of the Company Ashford Inc. to deliver REIT Ashford Inc. Common Shares Stock in satisfaction of a deferred payment of the Cash AmountRedemption Right, as provided above, should the General PartnerManager, as directed by the Company elect elect, or be deemed to elect, to satisfy a Redemption Right by paying the Redeeming Partner Member the REIT Ashford Inc. Common Shares Stock Amount, and it is necessary to obtain Company shareholder Ashford Inc. stockholder approval in order for it to issue sufficient REIT Ashford Inc. Common Shares Stock to satisfy such Redemption Right in full, then the Company Ashford Inc. shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder stockholder approval and to pay the REIT Ashford Inc. Common Shares Stock Amount, and the redemption date shall be required to occur by ten (10) days after stockholder approval of the earliest of: issuance of the Ashford Inc. Common Stock has been obtained, if it is obtained. If such stockholder approval is not obtained within one hundred and thirty (130) days after such Common Units are presented for redemption or the stockholders have voted against the issuance of the Ashford Inc. Common Stock and upon payment of the Ashford Inc. Common Stock the Company will distribute to the Redeeming Member any distributions pursuant to Section 8.1 that were not made after the Specified Redemption Date with respect to the Common Units redeemed because of the provisions of Section 7.3(a), the Company shall pay to the Redeeming Member the Cash Amount no later than the earlier of (i) ten (10) days after shareholder approval of stockholders have voted against the issuance of the REIT Ashford Inc. Common Shares has been obtainedStock, if it is obtained; or (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the Units are presented for redemption, together with interest on such Cash Amount as specified in Section 7.4(afrom the Specified Redemption Date to the date of payment at the rate equal to the lesser of (i) hereofAshford Inc.’s annual dividend rate on Ashford Inc. Common Stock for the twelve (12) month period prior to the Valuation Date and based upon the Cash Amount for Common Units redeemed, or (ii) eight percent (8%).
(c) Notwithstanding the provisions of Section 7.4(a7.3(a) and Section 7.4(b7.3(b), a Limited Partner Member shall not be entitled to receive REIT Ashford Inc. Common Shares Stock if the delivery of REIT Ashford Inc. Common Shares Stock to such Partner Member on the Specified Redemption Date (or such later date permitted by Section 7.4(b7.3(b), as applicable) by the Company Ashford Inc. pursuant to Section 7.4(b7.3(b) would be prohibited under the Articles of Incorporation of the CompanyAshford Inc., as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Ashford Inc. Common Shares Stock if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the CompanyAshford Inc., as amended or restated from time to time) more than 9.8% of the total number of issued and of shares of outstanding REIT Ashford Inc. Common SharesStock, unless waived by the board of directors of the Company Ashford Inc. in its sole discretion. To the extent any attempted redemption for REIT Ashford Inc. Common Shares Stock would be a violation of this Section 7.4(c7.3(c), it shall shall, to the fullest extent permitted by law, be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a7.3(a) or 7.4(bSection 7.3(b).
(d) Each Limited Partner Member covenants and agrees with the General Partner Manager and the Company that all Common Partnership Units delivered for redemption shall be delivered to the PartnershipCompany, the Company Ashford Inc. or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained in this Agreement to the contrary, neither the General PartnerManager, the Company Ashford Inc. (nor any of its Affiliates) nor the Partnership Company shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner Member further agrees that, in the event if any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership Company or the CompanyAshford Inc., such Limited Partner Member shall assume and pay such transfer tax.
(e) REIT Ashford Inc. Common Shares Stock issued pursuant to Section 7.4(b7.3(b) may contain such legends regarding restrictions on transfer as the Company Ashford Inc. in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REITlaws.
Appears in 1 contract
Redemption Right. (a) A. Subject to Section 7.4(b) Sections 8.6.B and Section 7.4(c)8.6.C hereof and on or after such date, and the provisions of if any, as expressly provided for in any agreements agreement entered into between the Partnership and one or more any Limited PartnersPartner, each Limited Partner (other than the Company) shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units (provided that such Partnership Units constitute Common Units) held by such Limited Partner at a redemption price per Unit equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the redemption right (the “Redeeming Partner. ”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the Company elects to purchase the Partnership Units subject to the Notice of Redemption pursuant to Section 8.6.B. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units at any one time or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid on or after the Specified Redemption Date. Each Redeeming The Assignee of any Limited Partner agrees may exercise the rights of such Limited Partner pursuant to provide such representations and related indemnities regarding good and unencumbered titlethis Section 8.6, and such Limited Partner shall be deemed to execute have assigned such documents, as rights to such Assignee and shall be bound by the General Partner may reasonably require in exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Any Partnership Units redeemed by the Partnership pursuant to this Section 8.6.A shall be cancelled upon such redemption.
(b) B. Notwithstanding the provisions of Section 7.4(a)8.6.A, in but subject to the event provisions of Section 8.6.D, a Limited Partner elects to exercise that exercises the Redemption Right, Right shall be deemed to have offered to sell the General Partner at Partnership Units described in the direction Notice of Redemption to the Company, directly or indirectly through one or more Affiliates, and the Company may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. If the Company shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five (5) Business Days after the receipt by it of such Notice of Redemption. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), ) shall exercise its right to assume directly and satisfy purchase Partnership Units from the Redemption RightRedeeming Partner pursuant to this Section 8.6.B, neither the General Partner nor the Company itself shall not have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's ’s exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 7.4(b)8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's ’s exercise of the such Redemption Right, and each of the Redeeming Partner, the Partnership, Partnership and the Company shall treat the transaction between the Company and the Redeeming Partner Partner, for federal income tax purposes purposes, as a sale of the Redeeming Partner's Common ’s Partnership Units to the Company or its AffiliatesCompany. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If In case of any reclassification of the Redemption Right REIT Shares (including, but not limited to, any reclassification upon a consolidation or merger in which the Company is satisfied by the delivery of continuing corporation) into securities other than REIT Common Shares, for purposes of this Section 8.6.B, the Redeeming Partner shall be deemed Company (or its Successor) may thereafter exercise its right to become purchase Partnership Units for the kind and amount of shares of such securities receivable upon such reclassification by a holder of the number of REIT Common Shares as of the close of business on the Specified Redemption Date or on for which such later date permitted by Units could be purchased pursuant to this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything immediately prior to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereofreclassification.
(c) C. Notwithstanding the provisions of Section 7.4(a) 8.6.A and Section 7.4(b)8.6.B, a Limited Partner shall not be entitled to receive REIT Common Shares if exercise the Redemption Right pursuant to Section 8.6.A to the extent that the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b8.6.B (regardless of whether or not the Company would in fact exercise its rights under Section 8.6.B) would (i) be prohibited under prohibited, as determined in the Articles of Incorporation sole discretion of the Company, as amended under the Declaration of Trust or restated from time (ii) cause the acquisition of REIT Shares by such Partner to time. Without limiting be “integrated” with any other distribution of REIT Shares for purposes of complying with the effect Securities Act.
D. Notwithstanding the provisions of Section 8.6.A and Section 8.6.B, a Partner may expressly condition the effectiveness of any exercise of its Redemption Right, if such exercise will result in the receipt of the preceding sentence, no Person shall be permitted REIT Shares Amount pursuant to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in Section 8.6.B rather than the Articles of Incorporation payment of the CompanyCash Amount, as amended or restated from time upon the REIT Shares constituting such REIT Shares Amount being:
(i) included in an effective registration statement in accordance with the Registration Rights Agreement, and
(ii) sold in a secondary offering pursuant to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretionthat registration statement. To the extent any attempted redemption for that such REIT Common Shares would are not included in such registration statement pursuant to the Registration Rights Agreement, including as a result of the provision requiring reduction of the shares that may be so included in an underwritten offering, or to the extent that such REIT Shares are included in a violation registration statement, but such REIT Shares are not sold in connection with a secondary offering thereunder, (x) the exercise of this Section 7.4(c), it the Redemption Right by the Redeeming Partner as to the shares not so included or not so sold shall be null of no force or effect, (y) the Redeeming Partner shall continue to own the Partnership Units that were the subject of the Notice of Redemption, and void ab initio(z) neither the Partnership nor the Company shall be obligated to acquire such Partnership Units for the Cash Amount. The Cash Amount Redeeming Partner shall be paid in such instances, in accordance reasonably cooperate with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, any underwriter (including furnishing the Company (nor with such information regarding the Redeeming Partner and any of its Affiliates) nor other information as necessary to effect such registration), and the Partnership and the Company shall be under reasonably cooperate with the Redeeming Partner and any obligation underwriter, in each case to acquire Common facilitate the issuance of the REIT Shares upon the purchase of any Partnership Units which are or may be subject to any liens. 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 Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b8.6.B so as to allow the timely sale by the Redeeming Partner of any REIT Shares received as part of the REIT Shares Amount in any such registered offering.
E. Notwithstanding the proviso to Section 14.1.C, this Section 8.6 (including the related definitions) may contain not be amended without the approval of each Limited Partner adversely affected by such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REITproposed amendment.
Appears in 1 contract
Sources: Limited Partnership Agreement (Colony Starwood Homes)
Redemption Right. (a) Subject to Section 7.4(b8.04(c) and Section 7.4(c), and the provisions of any agreements agreement between the Partnership and one or more Limited Partners, beginning on the date that is twelve months after the date of issuance of any Common Units (treating any Common Units that are issued upon the conversion of LTIP Units as having been issued when the LTIP Units into which they were converted were issued), each Limited Partner (other than ▇▇▇▇▇▇▇▇▇ REIT or any Subsidiary of ▇▇▇▇▇▇▇▇▇ REIT) shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner Partner’s Common Units at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to ▇▇▇▇▇▇▇▇▇ REIT) by the Limited Partner who is exercising the Redemption Right (the “Redeeming Limited Partner”), and such notice shall be irrevocable unless otherwise agreed upon by the General Partner) . No Limited Partner may deliver more than one Notice of Redemption during each calendar quarter unless otherwise agreed upon by the Redeeming General Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Limited Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Common Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a)8.04(a) hereof, in the event if a Limited Partner elects to exercise exercises the Redemption RightRight by delivering to the Partnership a Notice of Redemption, then the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume cause ▇▇▇▇▇▇▇▇▇ REIT to purchase directly and satisfy a Redemption Right acquire some or all of, and in such event ▇▇▇▇▇▇▇▇▇ REIT agrees to purchase and acquire, such Common Units by paying to the Redeeming Limited Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with whereupon ▇▇▇▇▇▇▇▇▇ REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered tendered for redemption by the Redeeming Limited Partner and ▇▇▇▇▇▇▇▇▇ REIT shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company ▇▇▇▇▇▇▇▇▇ REIT shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b)preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner's ’s exercise of the Redemption Right, and each of the Redeeming Limited Partner, the Partnership, Partnership and the Company ▇▇▇▇▇▇▇▇▇ REIT shall treat the transaction between the Company ▇▇▇▇▇▇▇▇▇ REIT and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner's ’s Common Partnership Units to the Company or its Affiliates▇▇▇▇▇▇▇▇▇ REIT for federal income tax purposes. Each Redeeming Limited Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company ▇▇▇▇▇▇▇▇▇ REIT may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(aSections 8.04(a) and Section 7.4(b)8.04(b) hereof, a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if the delivery of REIT Common Shares to such Limited Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company ▇▇▇▇▇▇▇▇▇ REIT pursuant to Section 7.4(b8.04(b) hereof (regardless of whether or not ▇▇▇▇▇▇▇▇▇ REIT would in fact exercise its rights under Section 8.04(b)) would (i) be prohibited under the Articles or (ii) cause the acquisition of Incorporation REIT Shares by such Limited Partner to be “integrated” with any other distribution of REIT Shares or Common Units for purposes of complying with the registration provisions of the CompanySecurities Act. ▇▇▇▇▇▇▇▇▇ REIT, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole and absolute discretion. To , may waive the extent any attempted restriction on redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in this Section 7.4(a) or 7.4(b8.04(c).
(d) Each Redeeming Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered tendered for redemption shall pursuant to this Section 8.04 will be delivered to the Partnership, the Company Partnership or its Affiliates, as the case may be, ▇▇▇▇▇▇▇▇▇ REIT free and clear of all liens andliens, notwithstanding anything herein contained claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to the contrarysuch Common Units, neither the General Partner, the Company (Partnership nor any of its Affiliates) nor the Partnership ▇▇▇▇▇▇▇▇▇ REIT shall be under any obligation to acquire such Common Partnership Units which are pursuant to Section 8.04(a) or may be subject to any liensSection 8.04(b) hereof. Each Redeeming Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company▇▇▇▇▇▇▇▇▇ REIT, such Redeeming Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued Any Cash Amount to be paid to a Redeeming Limited Partner pursuant to this Section 7.4(b8.04 shall be paid on the Specified Redemption Date; provided, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for ▇▇▇▇▇▇▇▇▇ REIT to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Share Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, ▇▇▇▇▇▇▇▇▇ REIT agrees to use its commercially reasonable efforts to cause the closing of the acquisition of redeemed Common Units hereunder to occur as quickly as reasonably possible.
(f) may contain such legends regarding restrictions on transfer as Notwithstanding any other provision of this Agreement, the Company in good faith General Partner is authorized to take any action that it determines to be necessary or advisable in order appropriate to (1) cause the General Partner and the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If the General Partner determines that Common Units are “United States real property interests” within the meaning of Section 897(c) of the Code, a Redeeming Limited Partner claiming an exemption from withholding must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership, ▇▇▇▇▇▇▇▇▇ REIT or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units, and such Redeeming Limited Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(g) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights as and if deemed necessary or reasonable to qualify ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the Partnership being treated as a REIT“publicly traded partnership” under Section 7704 of the Code.
Appears in 1 contract
Sources: Agreement of Limited Partnership (Ellington Residential Mortgage REIT)
Redemption Right. (a) Subject to Section 7.4(bSections 8.04(b), 8.04(c), 8.04(d), 8.04(e) and Section 7.4(c8.04(f), and the provisions of any agreements between the Partnership and one or more Limited PartnersPartners with respect to Partnership Units held by them and any restriction agreed to in writing between the Redeeming Limited Partner and the Company or the General Partner, each Limited Partner Partner, other than the Company or the General Partner, shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units that have been held by such Limited Partner for at least one year (or such lesser time as determined by the General Partner in its sole and absolute discretion) at a redemption price equal to and in the form of the Cash Redemption Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the Partnership. The Redemption Right shall be exercised pursuant to a Notice of Redemption (a form of which as attached as Exhibit C) delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Redeeming Limited Partner”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the Company elects to purchase the Partnership Units subject to the Notice of Redemption; and provided, further, that no Limited Partner may deliver more than two Notices of Redemption during each calendar year. A Without the consent of the General Partner, a Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common 1,000 Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common 1,000 Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a8.04(a), in the event a Limited Partner elects to exercise that exercises the Redemption Right, Right shall be deemed to have offered to sell the General Partner at Partnership Units described in the direction Notice of Redemption to the Company, directly or indirectly through one or more Affiliates, and the Company may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire such Partnership Units by paying to the Redeeming Limited Partner either (i) the Cash Amount, as provided for in Section 7.4(a), Amount or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that whereupon the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by If the Company (in its sole and absolute discretion), shall elect to exercise its right to assume directly and satisfy purchase Partnership Units under this Section 8.04(b) with respect to a Notice of Redemption, it shall so notify the Redemption Right, neither Redeeming Limited Partner within five Business Days after the receipt by the Company or the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Rightsuch Notice of Redemption. In the event the General Partner, as directed by the Company shall exercise its right to satisfy purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 7.4(b)Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner's ’s exercise of the such Redemption Right, and each of the Redeeming Limited Partner, the Partnership, the Company and the Company General Partner shall treat the transaction between the Company and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner's Common ’s Partnership Units to the Company or its AffiliatesCompany. Each Redeeming Limited Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a8.04(a) and Section 7.4(b8.04(b), a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b8.04(b) (regardless of whether or not the Company would in fact exercise its rights under Section 8.04(b)) would be prohibited (i) result in such Partner or any other Person owning, directly or indirectly or under applicable attribution rules, REIT Shares in excess of the Aggregate Share Ownership Limit, the Common Share Ownership Limit or an applicable Excepted Holder Limit (as such terms are respectively defined in the Declaration of Trust and as calculated in accordance therewith, except as otherwise provided therein), (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), (iii) result in the Company being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause the Company to own, directly or under the Articles applicable constructive ownership rules, 10% or more of Incorporation the ownership interests, by value or vote, in a tenant or subtenant of the Company’s, as amended the General Partner’s, the Partnership’s or restated from time to time. Without limiting a Subsidiary Partnership’s real property, within the effect meaning of Section 856(d)(2)(B) of the preceding sentenceCode (other than a “taxable REIT subsidiary” of the Company within the meaning of Section 856(l) of the Code), no Person shall provided that rents from such taxable REIT subsidiary qualify under Section 856(d)(8) of the Code, (v) be permitted likely to receive cause the acquisition of REIT Common Shares if by such Partner to be “integrated” with any other distribution of REIT Shares or Partnership Units for purposes of complying with the registration provisions of the Securities Act or (vi) cause any gross income of the Company to be treated as nonqualifying income for purposes of Section 856(c)(2) of the Code as a result of, and after giving effect to, such exercise of the failure of any Person would Beneficially Own to be treated as an “eligible independent contractor” within the meaning of Section 856(d)(9) of the Code. The Company or the General Partner may, in its sole and absolute discretion, waive the restriction on redemption set forth in this Section 8.04(c) upon the receipt of a ruling from the Internal Revenue Service or an opinion of counsel or other evidence satisfactory to the Company or the General Partner confirming that the increased ownership of REIT Shares pursuant to the waiver will not result in the Company being “closely held” within the meaning of section 856(h) of the Code or cause any person or group of persons to own directly or indirectly 10 percent or more, within the meaning of section 856(d)(2)(B)(i) or (ii) of the Code, of any tenant or subtenant of the Company’s, the General Partner’s, the Partnership’s or a Subsidiary Partnership’s real property (other than a “taxable REIT subsidiary,” as defined in the Articles of Incorporation section 856(l) of the CompanyCode, as amended or restated from time to timeif the requirements of section 856(d)(8) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(bCode are satisfied).
(d) Each Any Cash Amount to be paid to a Redeeming Limited Partner covenants and agrees with pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner that all Common may elect to cause the Specified Redemption Date to be delayed for up to an additional 90 days to the extent required for the Company to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount. Notwithstanding the foregoing, the General Partner agrees to use its best efforts to cause the closing of the acquisition of redeemed Partnership Units delivered for redemption shall be delivered hereunder to the Partnership, the Company or its Affiliates, occur as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable quickly as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer taxreasonably possible.
(e) REIT Common Shares issued pursuant Notwithstanding any other provision of this Agreement, the General Partner is authorized to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith take any action that it determines to be necessary or advisable in order appropriate to (1) cause the Partnership to comply with restrictions on transfer any withholding requirements established under the Securities Act Code or any other federal, state or local law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit D or such other form as the General Partner may reasonably request. If the Company, the Partnership or the General Partner is required to withhold and applicable state securities laws pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units, and the Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(2f) protect Notwithstanding any other provision of this Agreement, the General Partner shall place such restrictions as it reasonably deems appropriate on the ability of the Company Limited Partners to continue exercise their Redemption Rights as and if deemed necessary to qualify ensure that the Partnership does not constitute a “publicly traded partnership” taxable as a REITcorporation under Section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion or counsel to the Partnership that states, that, in the opinion of such counsel, restrictions are necessary in order to avoid the Partnership being treated as a “publicly traded partnership” under Section 7704 of the Code.
Appears in 1 contract
Redemption Right. (a) Subject to Section 7.4(b8.04(c) and Section 7.4(c), and the provisions of any agreements agreement between the Partnership and one or more Limited Partners, beginning on the date that is twelve months after the date of issuance of any Common Units (including any Common Units that are issued upon the conversion of LTIP Units), each Limited Partner (other than Xenia REIT or any Subsidiary of Xenia REIT) shall have the right (the "“Redemption Right"”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Common Partnership Units held by such Limited Partner Partner’s Common Units at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to Xenia REIT) by the Limited Partner who is exercising the Redemption Right (the “Redeeming Limited Partner”), and such notice shall be irrevocable unless otherwise agreed upon by the General Partner) . No Limited Partner may deliver more than one Notice of Redemption during each calendar quarter unless otherwise agreed upon by the Redeeming General Partner. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such Limited Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Common Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a)8.04(a) hereof, in the event if a Limited Partner elects to exercise exercises the Redemption RightRight by delivering to the Partnership a Notice of Redemption, then the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume cause Xenia REIT to purchase directly and satisfy a Redemption Right acquire some or all of, and in such event Xenia REIT agrees to purchase and acquire, CH\2141662.3 such Common Units by paying to the Redeeming Limited Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with whereupon Xenia REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered tendered for redemption by the Redeeming Limited Partner and Xenia REIT shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company Xenia REIT shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b)preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner's ’s exercise of the Redemption Right, and each of the Redeeming Limited Partner, the Partnership, Partnership and the Company Xenia REIT shall treat the transaction between the Company Xenia REIT and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner's ’s Common Partnership Units to the Company or its AffiliatesXenia REIT for federal income tax purposes. Each Redeeming Limited Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company Xenia REIT may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(aSections 8.04(a) and Section 7.4(b)8.04(b) hereof, a Limited Partner shall not be entitled to receive REIT Common Shares exercise the Redemption Right if the delivery of REIT Common Shares to such Limited Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company Xenia REIT pursuant to Section 7.4(b8.04(b) hereof (regardless of whether or not Xenia REIT would in fact exercise its rights under Section 8.04(b)) would be prohibited under the Articles of Incorporation of the Company, as amended (i) result in such Limited Partner or restated from time to time. Without limiting the effect of the preceding sentence, no any other Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation Articles) owning, directly or indirectly, REIT Shares in excess of the CompanyStock Ownership Limit or any Excepted Holder Limit (each as defined in Articles) and calculated in accordance therewith, except as amended or restated from time provided in the Articles, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to timeany rules of attribution), (iii) more than 9.8% result in Xenia REIT being “closely held” within the meaning of Section 856(h) of the total number of issued and outstanding Code, (iv) cause Xenia REIT Common Sharesto own, unless waived by the board of directors actually or constructively, 10% or more of the Company ownership interests in a tenant (other than a TRS) of Xenia REIT’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause Xenia REIT to fail to qualify as a REIT under the Code, or (vi) cause the acquisition of REIT Shares by such Limited Partner to be “integrated” with any other distribution of REIT Shares or Common Units for purposes of complying with the registration provisions of the Securities Act. Xenia REIT, in its sole and absolute discretion. To , may waive the extent any attempted restriction on redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in this Section 7.4(a) or 7.4(b8.04(c).
(d) Each Redeeming Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered tendered for redemption shall pursuant to this Section 8.04 will be delivered to the Partnership, the Company Partnership or its Affiliates, as the case may be, Xenia REIT free and clear of all liens andliens, notwithstanding anything herein contained claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to the contrarysuch Common Units, neither the General Partner, the Company (Partnership nor any of its Affiliates) nor the Partnership Xenia REIT shall be under any obligation to acquire such Common Partnership Units which are pursuant to Section 8.04(a) or may be subject to any liensSection 8.04(b) hereof. Each Redeeming Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the CompanyXenia REIT, such Redeeming Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued Any Cash Amount to be paid to a Redeeming Limited Partner pursuant to this Section 7.4(b8.04 shall be paid on the Specified Redemption Date; provided, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for Xenia REIT to cause additional REIT Shares to be issued to provide financing to CH\2141662.3 be used to make such payment of the Cash Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Share Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, Xenia REIT agrees to use its commercially reasonable efforts to cause the closing of the acquisition of redeemed Common Units hereunder to occur as quickly as reasonably possible.
(f) may contain such legends regarding restrictions on transfer as Notwithstanding any other provision of this Agreement, the Company in good faith General Partner is authorized to take any action that it determines to be necessary or advisable in order appropriate to (1) cause the General Partner and the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Redeeming Limited Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership, Xenia REIT or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units, and such Redeeming Limited Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(g) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company Limited Partners to continue exercise their Redemption Rights as and if deemed necessary or reasonable to qualify ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the Partnership being treated as a REIT“publicly traded partnership” under Section 7704 of the Code.
Appears in 1 contract
Sources: Limited Partnership Agreement (Xenia Hotels & Resorts, Inc.)
Redemption Right. (a) Subject to this Section 7.4(b) and Section 7.4(c), 8.5 and the provisions of any agreements between the Partnership and one or more Limited PartnersPartners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the "Redemption Right"terms and conditions set forth herein) to require the Partnership to redeem on (a Specified Redemption Date “Redemption”) all or a portion of the Common such Partnership Units held by such Limited Partner at a redemption price equal to and (the “Tendered Units”) in the form of exchange for REIT Shares issuable on, or the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after payable on, the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full as determined by the PartnershipGeneral Partner in its sole discretion (a “Redemption Right”). The Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Limited Partner exercising the Redemption Right (the “Tendering Party”). Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Advisor (or in the case of the Partnership Units received in consideration for management fees or the Performance Allocation, the assignees of the Special Limited Partner or the Advisor) shall have the right to require the Partnership to redeem all or a portion of their Class P Units, Class I Units, or other Partnership Units, as applicable, pursuant to this Section 8.5 at any time irrespective of the period the Partnership Units have been held by the Special Limited Partner or the Adviser or their respective assignees. The Partnership shall redeem any such Partnership Units of the Special Limited Partner or the Advisor for equivalent class REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such redemption for cash would be prohibited by applicable law or this Agreement, in which case such Partnership Units will be redeemed for an amount of the equivalent class REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). Notwithstanding the foregoing, the redemption of any Partnership Units by the Special Limited Partner or its assignee received in connection with the Performance Allocation will be subject to the limits set forth in the General Partner’s share repurchase plan as if such Partnership Units were REIT Shares; provided that such Partnership Units will not be subject to the Early Repurchase Deduction (as defined therein). A Limited Partner other than the Special Limited Partner and the Advisor may not exercise the Redemption Right for less than one thousand (1,000) Common 1,000 Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common 1,000 Partnership Units, less than all of the Common Partnership Units held by such Partner. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner The Tendering Party shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding If the provisions of General Partner (or, if applicable, the Advisor or Special Limited Partner) elects to redeem Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 7.4(a8.5(b), in the event a Limited Partner elects to exercise the Redemption Rightwhich case, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash AmountGeneral Partner, acting as provided for in Section 7.4(a)a distinct legal entity, or shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption Right, and (ii) the REIT Common Shares Amountsuch transaction shall be treated, for federal income tax purposes, as elected a transfer by the Tendering Party of such Tendered Units to the General Partner, as directed Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Company Tendering Party for which the General Partner (or, if applicable, the Advisor or Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the Partnership shall act in its sole a fair, equitable and absolute discretion)reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If the Partnership elects to redeem any number of Tendered Units for REIT Shares rather than Cash Amount, on the Specified Redemption Date, provided that the Company may defer payment Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (A) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (B) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (A) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (B) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount until to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and Specified Redemption Date; provided, furtherhowever, that the Company may, if it has elected so General Partner may elect to defer cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, further elect at any time before by causing additional REIT Shares to be issued or otherwise. Notwithstanding the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such electionforegoing, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor agrees to use its commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (i) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (ii) the REIT Shares from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (iii) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (iv) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (v) the violation of the Securities Act or other comparable state law, (vi) the registration of the Partnership as an investment company under the Investment Company itself shall have any obligation to Act, (vii) the Redeeming registration of the Partnership, the General Partner or to any Affiliate thereof (that is not already registered as an investment adviser under the Partnership with respect to Advisers Act) as an investment adviser under the Redeeming Partner's exercise Advisers Act, (viii) the termination of the Redemption Right. In Partnership’s status as a partnership for tax purposes, (ix) the event the General Partnerviolation of any law, as directed rule, regulation by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Limited Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (x) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that all Common imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units delivered for redemption Units, which notice shall be delivered accompanied by a copy of an opinion of counsel to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees states that, in the event any state or local property transfer tax is payable opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer taxapplicable.
(ef) REIT Common Shares issued A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) in connection with an exercise of Redemption Rights pursuant to this Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT8.5.
Appears in 1 contract
Sources: Limited Partnership Agreement (Cohen & Steers Income Opportunities REIT, Inc.)
Redemption Right. (a) Subject Except as set forth in the sentence that immediately follows this sentence and Section 11.1(g) hereof and subject to Section 7.4(b11.1(c) and Section 7.4(c), hereof and the provisions of any agreements agreement between the Partnership Company and one or more Limited PartnersMembers, beginning on the date that is 12 months after the date of issuance of any Common Units, each Limited Partner Member (other than EFC or any direct or indirect wholly owned Subsidiary of EFC) shall have the right (the "“Redemption Right"”) to require the Partnership Company to redeem on a Specified Redemption Date (as hereinafter defined) all or a portion of the such Member’s Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the PartnershipAmount. The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership Company (with a copy to the General PartnerEFC) by the Member who is exercising the Redemption Right (the “Redeeming PartnerMember”), and such notice shall be irrevocable unless otherwise agreed upon by the Board. No Member may deliver more than one Notice of Redemption during each calendar quarter unless otherwise agreed upon by the Board. A Limited Partner Member may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner Member holds less than one thousand (1,000) Common Partnership Units, less than all of the Common Partnership Units held by such PartnerMember. Moreover, a Limited Partner may not exercise the Redemption Right more than once per calendar quarter, PROVIDED, HOWEVER, that the General Partner may amend this Section 7.4(a) to limit the number of exercises of the Redemption Right by the Limited Partners to not less than once per calendar year. Neither the The Redeeming Partner nor any permitted or purported assignee of any Limited Partner Member shall have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any no right, with respect to any Common Partnership Units so redeemed, to receive any distributions distribution paid with respect to Common Units if the Company Record Date for such distribution is on or after the Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a)11.1(a) hereof, in the event if a Limited Partner elects to exercise Member exercises the Redemption RightRight by delivering to the Company a Notice of Redemption, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, then EFC may, in its sole and absolute discretion, elect to assume purchase directly and satisfy a Redemption Right acquire some or all of, and in such event EFC agrees to purchase and acquire, such Common Units by paying to the Redeeming Partner either (i) Member the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common EFC Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that the Company may defer payment of the Cash Amount until the end of the Payout Period described in Section 7.4(a) (in which case the Cash Amount shall bear interest as described in Section 7.4(a)), and provided, further, that the Company may, if it has elected so to defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, whereupon EFC shall acquire the Common Partnership Units offered tendered for redemption by the Redeeming Partner Member and EFC shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume directly and satisfy the Redemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company EFC shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b)preceding sentence, the Partnership Company shall have no obligation to pay any amount to the Redeeming Partner Member with respect to such Redeeming Partner's Member’s exercise of the Redemption Right, and each of the Redeeming PartnerMember, the Partnership, Company and the Company EFC shall treat the transaction between the Company EFC and the Redeeming Partner for federal income tax purposes Member as a sale of the Redeeming Partner's Member’s Common Partnership Units to the Company or its AffiliatesEFC for federal income tax purposes. Each Redeeming Partner Member agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, documents as the Company EFC may reasonably require in connection with the issuance of REIT shares of Common Shares Stock upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after the Specified Redemption Date. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as directed by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(aSections 11.1(a) and Section 7.4(b)11.1(b) hereof, a Limited Partner Member shall not be entitled to receive REIT Common Shares exercise the Redemption Right if (i) the delivery of REIT shares of Common Shares Stock to such Partner Member on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company EFC pursuant to Section 7.4(b11.1(b) hereof (regardless of whether or not EFC would in fact exercise its rights under Section 11.1(b) hereof) would (A) be prohibited under the EFC Charter or (B) cause the acquisition of shares of Common Stock by such Member to be “integrated” with any other distribution of shares of Common Stock or Common Units for purposes of complying with the registration provisions of the Securities Act, or (ii) the exercise of the Redemption Right would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to timeSection 10.2(e) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b)hereof.
(d) Each Limited Partner Redeeming Member covenants and agrees with the General Partner that all Common Partnership Units delivered tendered for redemption shall pursuant to this Section 11.1 will be delivered to the Partnership, the Company or its Affiliates, as the case may be, EFC free and clear of all liens andliens, notwithstanding anything herein contained claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to the contrarysuch Common Units, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership EFC shall be under any obligation to acquire such Common Partnership Units which are pursuant to Section 11.1(a) or may be subject to any liens11.1(b) hereof. Each Limited Partner Redeeming Member further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer Transfer of its Common Partnership Units to the General PartnerCompany or EFC, Partnership or the Companyas applicable, such Limited Partner Redeeming Member shall assume and pay such transfer tax.
(e) REIT Common Shares issued Any Cash Amount to be paid to a Redeeming Member pursuant to this Section 7.4(b) 11.1 shall be paid on the Specified Redemption Date; provided, that EFC may contain elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for EFC to cause additional shares of Common Stock to be issued to provide financing to be used to make such legends regarding restrictions payment of the Cash Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the Law. Any EFC Shares Amount to be paid to a Redeeming Member pursuant to this Section 11.1 shall be paid on transfer as the Specified Redemption Date; provided, that the Company in good faith or EFC, as applicable, may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the Law. Notwithstanding the foregoing, each of the Company and EFC agree to use commercially reasonable efforts to cause the closing of the acquisition of redeemed Common Units hereunder to occur as quickly as reasonably possible.
(f) Notwithstanding any other provision of this Agreement, each of the Company and EFC are authorized to take any action that the Company and/or EFC, as applicable, determines to be necessary or advisable in order appropriate to (1) cause the Company and EFC, as applicable, to comply with restrictions on transfer any withholding requirements established under the Securities Act and applicable state securities laws and (2) protect the ability Code or any other federal, state, local or foreign Law that apply upon a Redeeming Member’s exercise of the Redemption Right. A Redeeming Member claiming an exemption from withholding pursuant to Section 1446(f) of the Code must furnish the Company and EFC with a certificate in the form attached hereto as Exhibit C-1 or -2. If the Board determines that Common Units are “United States real property interests” within the meaning of Section 897(c) of the Code, a Redeeming Member claiming an exemption from withholding must furnish the Company and EFC with a FIRPTA Certificate in the form attached hereto as Exhibit C-3 or -4 (in lieu of the form of certificate attached hereto as Exhibit C-1 or -2) and any similar forms or certificates required to continue avoid or reduce the withholding under federal, state, local or foreign Law or such other form as the Company or EFC may reasonably request. If the Company or EFC is required to qualify withhold and pay over to any taxing authority any amount upon a Redeeming Member’s exercise of the Redemption Right and if the Redemption Amount (as hereinafter defined) equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Member in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Member shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Member in redemption of its Common Units, and such Redeeming Member shall contribute the excess of the Withheld Amount over the Redemption Amount to the Company before the Company is required to pay over such excess to a REITtaxing authority.
(g) Notwithstanding anything to the contrary in this Agreement, EMGH and/or any of its Affiliates who are Members shall have a Redemption Right effective upon the occurrence of an EMGH Redemption Right Event; provided, however, that in the case of a Redemption Right exercised pursuant to the provisions of this Section 11.1(g), the Specified Redemption Date shall mean the first business day of the month that is at least 30 calendar days after the receipt by the Company of a Notice of Redemption.
Appears in 1 contract
Sources: Limited Liability Company Operating Agreement (Ellington Financial Inc.)