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EXHIBIT 10.1
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THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
AIMCO PROPERTIES, L.P.
a Delaware limited partnership
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THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM
AND SUBSTANCE SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT
THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE
EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER
APPLICABLE STATE SECURITIES OR "BLUESKY" LAWS.
dated as of July 29, 1994
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TABLE OF CONTENTS
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ARTICLE 1 DEFINED TERMS.................................................................................. 1
ARTICLE 2 ORGANIZATIONAL MATTERS......................................................................... 17
Section 2.1 Organization................................................................. 17
Section 2.2 Name......................................................................... 17
Section 2.3 Registered Office and Agent; Principal Office................................ 17
Section 2.4 Power of Attorney............................................................ 17
Section 2.5 Term......................................................................... 18
ARTICLE 3 PURPOSE........................................................................................ 18
Section 3.1 Purpose and Business......................................................... 19
Section 3.2 Powers....................................................................... 19
Section 3.3 Partnership Only for Purposes Specified...................................... 19
Section 3.4 Representations and Warranties by the Parties................................ 19
ARTICLE 4 CAPITAL CONTRIBUTIONS.......................................................................... 21
Section 4.1 Capital Contributions of the Partners........................................ 21
Section 4.2 Issuances of Additional Partnership Interests................................ 21
Section 4.3 Additional Funds............................................................. 22
Section 4.4 Stock Option Plans........................................................... 23
Section 4.5 No Interest; No Return....................................................... 25
Section 4.6 Conversion of Junior Shares.................................................. 25
ARTICLE 5 DISTRIBUTIONS...................................................................................25
Section 5.1 Requirement and Characterization of Distributions............................ 25
Section 5.2 Distributions in Kind........................................................ 25
Section 5.3 Amounts Withheld............................................................. 25
Section 5.4 Distributions Upon Liquidation............................................... 25
Section 5.5 Restricted Distributions..................................................... 26
ARTICLE 6 ALLOCATIONS.................................................................................... 26
Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss.................. 26
Section 6.2 General Allocations.......................................................... 26
Section 6.3 Additional Allocation Provisions............................................. 26
Section 6.4 Tax Allocations.............................................................. 28
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ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS.......................................................... 29
Section 7.1 Management................................................................... 29
Section 7.2 Certificate of Limited Partnership........................................... 32
Section 7.3 Restrictions on General Partner's Authority.................................. 32
Section 7.4 Reimbursement of the General Partner......................................... 34
Section 7.5 Outside Activities of the Previous General Partner and the General
Partner...................................................................... 35
Section 7.6 Contracts with Affiliates.................................................... 35
Section 7.7 Indemnification.............................................................. 36
Section 7.8 Liability of the General Partner............................................. 38
Section 7.9 Other Matters Concerning the General Partner................................. 39
Section 7.10 Title to Partnership Assets.................................................. 39
Section 7.11 Reliance by Third Parties.................................................... 39
ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS..................................................... 40
Section 8.1 Limitation of Liability...................................................... 40
Section 8.2 Management of Business....................................................... 40
Section 8.3 Outside Activities of Limited Partners....................................... 40
Section 8.4 Return of Capital............................................................ 40
Section 8.5 Rights of Limited Partners Relating to the Partnership....................... 41
Section 8.6 Redemption Rights of Qualifying Parties...................................... 41
Section 8.7 Partnership Right to Call Limited Partner Interests.......................... 45
ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS......................................................... 46
Section 9.1 Records and Accounting....................................................... 46
Section 9.2 Fiscal Year.................................................................. 46
Section 9.3 Reports...................................................................... 46
ARTICLE 10 TAX MATTERS.................................................................................... 46
Section 10.1 Preparation of Tax Returns................................................... 46
Section 10.2 Tax Elections................................................................ 47
Section 10.3 Tax Matters Partner.......................................................... 47
Section 10.4 Withholding.................................................................. 48
ARTICLE 11 TRANSFERS AND WITHDRAWALS...................................................................... 49
Section 11.1 Transfer..................................................................... 49
Section 11.2 Transfer of General Partner's Partnership Interest........................... 49
Section 11.3 Limited Partners' Rights to Transfer......................................... 50
Section 11.4 Substituted Limited Partners................................................. 52
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Section 11.5 Assignees.................................................................... 52
Section 11.6 General Provisions........................................................... 53
ARTICLE 12 ADMISSION OF PARTNERS.......................................................................... 54
Section 12.1 Admission of Successor General Partner....................................... 54
Section 12.2 Admission of Additional Limited Partners..................................... 54
Section 12.3 Amendment of Agreement and Certificate of Limited Partnership................ 55
Section 12.4 Admission of Initial Limited Partners........................................ 55
Section 12.5 Limit on Number of Partners.................................................. 55
ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION....................................................... 55
Section 13.1 Dissolution.................................................................. 55
Section 13.2 Winding Up................................................................... 56
Section 13.3 Deemed Distribution and Recontribution....................................... 57
Section 13.4 Rights of Limited Partners................................................... 57
Section 13.5 Notice of Dissolution........................................................ 57
Section 13.6 Cancellation of Certificate of Limited Partnership........................... 57
Section 13.7 Reasonable Time for Winding-Up............................................... 58
ARTICLE 14 PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS; AMENDMENTS;
MEETINGS....................................................................................... 58
Section 14.1 Procedures for Actions and Consents of Partners.............................. 58
Section 14.2 Amendments................................................................... 58
Section 14.3 Meetings of the Partners..................................................... 58
ARTICLE 15 GENERAL PROVISIONS............................................................................. 59
Section 15.1 Addresses and Notice......................................................... 59
Section 15.2 Titles and Captions.......................................................... 59
Section 15.3 Pronouns and Plurals......................................................... 59
Section 15.4 Further Action............................................................... 59
Section 15.5 Binding Effect............................................................... 59
Section 15.6 Waiver....................................................................... 59
Section 15.7 Counterparts................................................................. 60
Section 15.8 Applicable Law............................................................... 60
Section 15.9 Entire Agreement............................................................. 60
Section 15.10 Invalidity of Provisions..................................................... 60
Section 15.11 Limitation to Preserve REIT Status........................................... 60
Section 15.12 No Partition................................................................. 61
Section 15.13 No Third-Party Rights Created Hereby......................................... 61
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EXHIBIT A PARTNERS AND PARTNERSHIP UNITS.................................................................A-1
EXHIBIT B EXAMPLES REGARDING ADJUSTMENT FACTOR...........................................................B-1
EXHIBIT C LIST OF DESIGNATED PARTIES.....................................................................C-1
EXHIBIT D INTENTIONALLY OMITTED..........................................................................D-1
EXHIBIT E NOTICE OF REDEMPTION...........................................................................E-1
EXHIBIT F FORM OF UNIT CERTIFICATE.......................................................................F-1
EXHIBIT G PARTNERSHIP UNIT DESIGNATION OF THE CLASS B PARTNERSHIP
PREFERRED UNITS................................................................................G-1
EXHIBIT H PARTNERSHIP UNIT DESIGNATION OF THE CLASS C PARTNERSHIP
PREFERRED UNITS................................................................................H-1
EXHIBIT I PARTNERSHIP UNIT DESIGNATION OF THE CLASS D PARTNERSHIP
PREFERRED UNITS................................................................................I-1
EXHIBIT J PARTNERSHIP UNIT DESIGNATION OF THE CLASS E PARTNERSHIP
PREFERRED UNITS................................................................................J-1
EXHIBIT K PARTNERSHIP UNIT DESIGNATION OF THE CLASS I HIGH
PERFORMANCE PARTNERSHIP UNITS..................................................................K-1
EXHIBIT L PARTNERSHIP UNIT DESIGNATION OF THE CLASS G PARTNERSHIP
PREFERRED UNITS................................................................................L-1
EXHIBIT M PARTNERSHIP UNIT DESIGNATION OF THE CLASS H PARTNERSHIP
PREFERRED UNITS................................................................................M-1
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THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.
THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF AIMCO PROPERTIES, L.P., dated as of July 29, 1994, and amended
and restated as of October 1, 1998, is entered into by and among Apartment
Investment and Management Company, a Maryland corporation (the "Previous General
Partner"), AIMCO-GP, Inc., a Delaware corporation (the "General Partner"),
AIMCO-LP, Inc., a Delaware corporation (the "Special Limited Partner"), and the
other Limited Partners (as defined below).
WHEREAS, the General Partner has submitted, and the Limited
Partners have approved, an amendment and restatement of the Agreement of Limited
Partnership of AIMCO Properties, L.P. on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINED TERMS
The following definitions shall be for all purposes, unless
otherwise clearly indicated to the contrary, applied to the terms used in this
Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership
Act, as it may be amended from time to time, and any successor to such statute.
"Actions" has the meaning set forth in Section 7.7 hereof.
"Additional Funds" has the meaning set forth in Section 4.3.A
hereof.
"Additional Limited Partner" means a Person who is admitted to
the Partnership as a Limited Partner pursuant to Section 4.2 and Section 12.2
hereof and who is shown as such on the books and records of the Partnership.
"Adjusted Capital Account Deficit" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Capital Account as of
the end of the relevant Fiscal Year, after giving effect to the following
adjustments:
(i) decrease such deficit by any amounts that such
Partner is obligated to restore pursuant to this Agreement or by
operation of law upon liquidation of such Partner's Partnership
Interest or is deemed to be obligated to restore pursuant to the
penultimate sentence of each of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5); and
(ii) increase such deficit by the items described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
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The foregoing definition of "Adjusted Capital Account Deficit" is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
"Adjustment Factor" means 1.0; provided, however, that in the
event that:
(i) the Previous General Partner (a) declares or pays
a dividend on its outstanding REIT Shares in REIT Shares or
makes a distribution to all holders of its outstanding REIT
Shares in REIT Shares, (b) splits or subdivides its
outstanding REIT Shares or (c) effects a reverse stock split
or otherwise combines its outstanding REIT Shares into a
smaller number of REIT Shares, the Adjustment Factor shall be
adjusted by multiplying the Adjustment Factor previously in
effect by a fraction, (i) the numerator of which shall be the
number of REIT Shares issued and outstanding on the record
date for such dividend, distribution, split, subdivision,
reverse split or combination (assuming for such purposes that
such dividend, distribution, split, subdivision, reverse split
or combination has occurred as of such time) and (ii) the
denominator of which shall be the actual number of REIT Shares
(determined without the above assumption) issued and
outstanding on the record date for such dividend,
distribution, split, subdivision, reverse split or
combination;
(ii) the Previous General Partner distributes any
rights, options or warrants to all holders of its REIT Shares
to subscribe for or to purchase or to otherwise acquire REIT
Shares (or other securities or rights convertible into,
exchangeable for or exercisable for REIT Shares) at a price
per share less than the Value of a REIT Share on the record
date for such distribution (each a "Distributed Right"), then
the Adjustment Factor shall be adjusted by multiplying the
Adjustment Factor previously in effect by a fraction (a) the
numerator of which shall be the number of REIT Shares issued
and outstanding on the record date plus the maximum number of
REIT Shares purchasable under such Distributed Rights and (b)
the denominator of which shall be the number of REIT Shares
issued and outstanding on the record date plus a fraction (1)
the numerator of which is the maximum number of REIT Shares
purchasable under such Distributed Rights times the minimum
purchase price per REIT Share under such Distributed Rights
and (2) the denominator of which is the Value of a REIT Share
as of the record date; provided, however, that, if any such
Distributed Rights expire or become no longer exercisable,
then the Adjustment Factor shall be adjusted, effective
retroactive to the date of distribution of the Distributed
Rights, to reflect a reduced maximum number of REIT Shares or
any change in the minimum purchase price for the purposes of
the above fraction; and
(iii) the Previous General Partner shall, by dividend
or otherwise, distribute to all holders of its REIT Shares
evidences of its indebtedness or assets (including securities,
but excluding any dividend or distribution referred to in
subsection (i) above), which evidences of indebtedness or
assets relate to assets not received by the Previous General
Partner, the General Partner and/or the Special Limited
Partner pursuant to a pro rata distribution by the Partner
ship, then the Adjustment Factor shall be adjusted to equal
the amount determined by multiplying the Adjustment Factor in
effect immediately prior to the close of business on the date
fixed for determination of shareholders entitled to receive
such distribution by a fraction (i) the numerator shall be
such Value of a REIT Share on the date fixed for such
determination and (ii) the denomina tor shall be the Value of
a REIT Share on the dates fixed for such determination less
the then fair market value (as determined by the General
Partner, whose determination shall be conclusive) of the
portion of the evidences of indebted ness or assets so
distributed applicable to one REIT Share.
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Any adjustments to the Adjustment Factor shall become effective immediately
after the effective date of such event, retroactive to the record date, if any,
for such event, provided, however, that any Limited Partner may waive, by
written notice to the General Partner, the effect of any adjustment to the
Adjustment Factor applicable to the Partnership Common Units held by such
Limited Partner, and, thereafter, such adjustment will not be effective as to
such Partnership Common Units. For illustrative purposes, examples of
adjustments to the Adjustment Factor are set forth on Exhibit B attached hereto.
"Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling or controlled by or under common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Third Amended and Restated Agreement of
Limited Partnership of AIMCO Properties, L.P., as it may be amended,
supplemented or restated from time to time.
"Applicable Percentage" has the meaning set forth in Section
8.6.B hereof.
"Appraisal" means, with respect to any assets, the written
opinion of an independent third party experienced in the valuation of similar
assets, selected by the General Partner in good faith. Such opinion may be in
the form of an opinion by such independent third party that the value for such
property or asset as set by the General Partner is fair, from a financial point
of view, to the Partnership.
"Assignee" means a Person to whom one or more Partnership
Common Units have been Transferred in a manner permitted under this Agreement,
but who has not become a Substituted Limited Partner, and who has the rights set
forth in Section 11.5 hereof.
"Available Cash" means, with respect to any period for which
such calculation is being made,
(i) the sum, without duplication, of:
(1) the Partnership's Net Income or Net Loss
(as the case may be) for such period,
(2) Depreciation and all other noncash
charges to the extent deducted in determining Net Income or
Net Loss for such period,
(3) the amount of any reduction in reserves
of the Partnership referred to in clause (ii)(6) below
(including, without limitation, reductions resulting because
the General Partner determines such amounts are no longer
necessary),
(4) the excess, if any, of the net cash
proceeds from the sale, exchange, disposition, financing or
refinancing of Partnership property for such period over the
gain (or loss, as the case may be) recognized from such sale,
exchange, disposition, financing or refinancing during such
period (excluding Terminating Capital Transactions), and
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(5) all other cash received (including
amounts previously accrued as Net Income and amounts of
deferred income) or any net amounts borrowed by the
Partnership for such period that was not included in
determining Net Income or Net Loss for such period;
(ii) less the sum, without duplication, of:
(1) all principal debt payments made during
such period by the Partnership,
(2) capital expenditures made by the
Partnership during such period,
(3) investments in any entity (including
loans made thereto) to the extent that such investments are
not otherwise described in clause (ii)(1) or clause (ii)(2)
above,
(4) all other expenditures and payments not
deducted in determining Net Income or Net Loss for such period
(including amounts paid in respect of expenses previously
accrued),
(5) any amount included in determining Net
Income or Net Loss for such period that was not received by
the Partnership during such period,
(6) the amount of any increase in reserves
(including, without limitation, working capital reserves)
established during such period that the General Partner
determines are necessary or appropriate in its sole and
absolute discretion, and
(7) any amount distributed or paid in
redemption of any Limited Partner Interest or Partnership
Units including, without limitation, any Cash Amount paid.
Notwithstanding the foregoing, Available Cash shall not include (a) any cash
received or reductions in reserves, or take into account any disbursements made,
or reserves established, after dissolution and the commencement of the
liquidation and winding up of the Partnership or (b) any Capital Contributions,
whenever received.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Denver, Colorado, Los Angeles, California
or New York, New York are authorized or required by law to close.
"Capital Account" means, with respect to any Partner, the
Capital Account maintained by the General Partner for such Partner on the
Partnership's books and records in accordance with the following provisions:
(a) To each Partner's Capital Account, there shall be
added such Partner's Capital Contributions, such Partner's distributive share of
Net Income and any items in the nature of income or gain that are specially
allocated pursuant to Section 6.3 hereof, and the principal amount of any
Partnership liabilities assumed by such Partner or that are secured by any
property distributed to such Partner.
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(b) From each Partner's Capital Account, there shall
be subtracted the amount of cash and the Gross Asset Value of any property
distributed to such Partner pursuant to any provision of this Agreement, such
Partner's distributive share of Net Losses and any items in the nature of
expenses or losses that are specially allocated pursuant to Section 6.3 hereof,
and the principal amount of any liabilities of such Partner assumed by the
Partnership or that are secured by any property contributed by such Partner to
the Partnership.
(c) In the event any interest in the Partnership is
Transferred in accordance with the terms of this Agreement, the transferee shall
succeed to the Capital Account of the transferor to the extent that it relates
to the Transferred interest.
(d) In determining the principal amount of any
liability for purposes of subsections (a) and (b) hereof, there shall be taken
into account Code Section 752(c) and any other applicable provisions of the Code
and Regulations.
(e) The provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Regulations Sections
1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner
consistent with such Regulations. If the General Partner shall determine that it
is prudent to modify the manner in which the Capital Accounts are maintained in
order to comply with such Regulations, the General Partner may make such
modification provided that such modification will not have a material effect on
the amounts distributable to any Partner without such Partner's Consent. The
General Partner also shall (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Partners
and the amount of Partnership capital reflected on the Partnership's balance
sheet, as computed for book purposes, in accordance with Regulations Section
1.704-1(b)(2)(iv)(q) and (ii) make any appropriate modifications in the event
that unanticipated events might otherwise cause this Agreement not to comply
with Regulations Section 1.704-1(b) or Section 1.704-2.
"Capital Contribution" means, with respect to any Partner, the
amount of money and the initial Gross Asset Value of any Contributed Property
that such Partner contributes to the Partnership pursuant to Section 4.1, 4.2 or
4.3 hereof or is deemed to contribute pursuant to Section 4.4 hereof.
"Cash Amount" means the lesser of (a) an amount of cash equal
to the product of (i) the Value of a REIT Share and (ii) the REIT Shares Amount
determined as of the applicable Valuation Date or (b) in the case of a
Declination followed by a Public Offering Funding, the Public Offering Funding
Amount.
"Certificate" means the Certificate of Limited Partnership of
the Partnership filed in the office of the Secretary of State of the State of
Delaware, as amended from time to time in accordance with the terms hereof and
the Act.
"Charter" means the Articles of Amendment and Restatement of
the Previous General Partner filed with the Maryland State Department of
Assessments and Taxation on July 19, 1994, as amended, supplemented or restated
from time to time.
"Code" means the Internal Revenue Code of 1986, as amended and
in effect from time to time or any successor statute thereto, as interpreted by
the applicable Regulations thereunder. Any reference herein to a specific
section or sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.
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"Company Employee" has the meaning ascribed thereto in the
Previous General Partner's 1994 Stock Option Plan.
"Consent" means the consent to, approval of, or vote in favor
of a proposed action by a Partner given in accordance with Article 14 hereof.
"Consent of the Limited Partners" means the Consent of a
Majority in Interest of the Limited Partners, which Consent shall be obtained
prior to the taking of any action for which it is required by this Agreement
and, except as otherwise provided in this Agreement, may be given or withheld by
a Majority in Interest of the Limited Partners, in their reasonable discretion.
"Contributed Property" means each Property or other asset, in
such form as may be permitted by the Act, but excluding cash, contributed or
deemed contributed to the Partnership (or deemed contributed to the Partnership
on termination and reconstitution thereof pursuant to Code Section 708).
"Controlled Entity" means, as to any Limited Partner, (a) any
corporation more than fifty percent (50%) of the outstanding voting stock of
which is owned by such Limited Partner or such Limited Partner's Family Members,
(b) any trust, whether or not revocable, of which such Limited Partner or such
Limited Partner's Family Members are the sole beneficiaries, (c) any partnership
of which such Limited Partner is the managing partner and in which such Limited
Partner or such Limited Partner's Family Members hold partnership interests
representing at least twenty-five percent (25%) of such partnership's capital
and profits and (d) any limited liability company of which such Limited Partner
is the manager and in which such Limited Partner or such Limited Partner's
Family Members hold membership interests representing at least twenty-five
percent (25%) of such limited liability company's capital and profits.
"Controlling Person" means any Person, whatever his or her
title, who performs executive or senior management functions for the General
Partner or its Affiliates similar to those of directors, executive management
and senior management, or any Person who either holds a two percent (2%) or more
equity interest in the General Partner or its Affiliates, or has the power to
direct or cause the direction of the General Partner or its Affiliates, whether
through the ownership of voting securities, by contract or otherwise, or, in the
absence of a specific role or title, any Person having the power to direct or
cause the direction of the management-level employees and policies of the
General Partner or its Affiliates. It is not intended that every Person who
carries a title such as vice president, senior vice president, secretary or
treasurer be included in the definition of "Controlling Person."
"Cut-Off Date" means the fifth (5th) Business Day after the
General Partner's receipt of a Notice of Redemption.
"Debt" means, as to any Person, as of any date of
determination, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services; (ii) all amounts owed by such
Person to banks or other Persons in respect of reimbursement obligations under
letters of credit, surety bonds and other similar instruments guaranteeing
payment or other performance of obligations by such Person; (iii) all
indebtedness for borrowed money or for the deferred purchase price of property
or services secured by any lien on any property owned by such Person, to the
extent attributable to such Person's interest in such property, even though such
Person has not assumed or become liable for the payment thereof; and (iv) lease
obligations of such Person that, in accordance with generally accepted
accounting principles, should be capitalized.
"Declination" has the meaning set forth in Section 8.6.D
hereof.
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"Depreciation" means, for each Fiscal Year or other applicable
period, an amount equal to the federal income tax depreciation, amortization or
other cost recovery deduction allowable with respect to an asset for such year
or other period, except that if the Gross Asset Value of an asset differs from
its adjusted basis for federal income tax purposes at the beginning of such year
or period, Depreciation shall be in an amount that bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation, amortization
or other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year or
period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General
Partner.
"Designated Parties" means the Persons designated on Exhibit C
attached hereto. The General Partner may, in its sole and absolute discretion,
amend Exhibit C to add Persons to be designated as Designated Parties.
"Distributed Right" has the meaning set forth in the
definition of "Adjustment Factor."
"Effective Date" means July 29, 1994.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Family Members" means, as to a Person that is an individual,
such Person's spouse, ancestors, descendants (whether by blood or by adoption),
brothers, sisters and inter vivos or testamentary trusts of which only such
Person and his spouse, ancestors, descendants (whether by blood or by adoption),
brothers and sisters are beneficiaries.
"Fiscal Year" means the fiscal year of the Partnership, which
shall be the calendar year.
"Funding Debt" means any Debt incurred by or on behalf of the
Previous General Partner, the General Partner or the Special Limited Partner for
the purpose of providing funds to the Partnership.
"General Partner" means AIMCO-GP, Inc., a Delaware
corporation, and its successors and assigns, as the general partner of the
Partnership in their capacities as general partner of the Partnership.
"General Partner Interest" means the Partnership Interest held
by the General Partner, which Partnership Interest is an interest as a general
partner under the Act. A General Partner Interest may be expressed as a number
of Partnership Common Units, Partnership Preferred Units or any other
Partnership Units.
"General Partner Loan" has the meaning set forth in Section
4.3.D hereof.
"Gross Asset Value" means, with respect to any asset, the
asset's adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the gross fair market values of such
assets as determined by the General Partner and agreed to by the contributing
Partner. In any case in which the General Partner and the contributing Partner
are unable to agree as to the gross fair market value of any contributed asset
or assets, such gross fair market value shall be determined by Appraisal.
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(b) The Gross Asset Values of all Partnership assets
immediately prior to the occurrence of any event described in clause (i), clause
(ii), clause (iii), clause (iv) or clause (v) hereof shall be adjusted to equal
their respective gross fair market values, as determined by the General Partner
using such reasonable method of valuation as it may adopt, as of the following
times:
(i) the acquisition of an additional
interest in the Partnership (other than in connection with the
execution of this Agreement but including, without limitation,
acquisitions pursuant to Section 4.2 hereof or contributions or deemed
contributions by the General Partner pursuant to Section 4.2 hereof) by
a new or existing Partner in exchange for more than a de minimis
Capital Contribution, if the General Partner reasonably determines that
such adjustment is necessary or appropriate to reflect the relative
economic interests of the Partners in the Partnership;
(ii) the distribution by the Partnership to
a Partner of more than a de minimis amount of Partnership property as
consideration for an interest in the Partnership, if the General
Partner reasonably determines that such adjustment is necessary or
appropriate to reflect the relative economic interests of the Partners
in the Partnership;
(iii) the liquidation of the Partnership
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);
(iv) upon the admission of a successor
General Partner pursuant to Section 12.1 hereof; and
(v) at such other times as the General
Partner shall reasonably determine necessary or advisable in order to
comply with Regulations Sections 1.704-1(b) and 1.704-2.
(c) The Gross Asset Value of any Partnership asset
distributed to a Partner shall be the gross fair market value of such asset on
the date of distribution as determined by the distributee and the General
Partner provided that, if the distributee is the General Partner or if the
distributee and the General Partner cannot agree on such a determination, such
gross fair market value shall be determined by Appraisal.
(d) The Gross Asset Values of Partnership assets
shall be increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but
only to the extent that such adjustments are taken into account in determining
Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided,
however, that Gross Asset Values shall not be adjusted pursuant to this
subsection (d) to the extent that the General Partner reasonably determines that
an adjustment pursuant to subsection (b) above is necessary or appropriate in
connection with a transaction that would otherwise result in an adjustment
pursuant to this subsection (d).
(e) If the Gross Asset Value of a Partnership asset
has been determined or adjusted pursuant to subsection (a), subsection (b) or
subsection (d) above, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.
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"Holder" means either (a) a Partner or (b) an Assignee, owning
a Partnership Unit, that is treated as a member of the Partnership for federal
income tax purposes.
"Incapacity" or "Incapacitated" means, (i) as to any Partner
who is an individual, death, total physical disability or entry by a court of
competent jurisdiction adjudicating such Partner incompetent to manage his or
her person or his or her estate; (ii) as to any Partner that is a corporation or
limited liability company, the filing of a certificate of dissolution, or its
equivalent, for the corporation or the revocation of its charter; (iii) as to
any Partner that is a partnership, the dissolution and commencement of winding
up of the partnership; (iv) as to any Partner that is an estate, the
distribution by the fiduciary of the estate's entire interest in the
Partnership; (v) as to any trustee of a trust that is a Partner, the termination
of the trust (but not the substitution of a new trustee); or (vi) as to any
Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief of or against such Partner under any bankruptcy, insolvency or other
similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner's properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the appointment without the Partner's consent or acquiescence of a
trustee, receiver or liquidator has not been vacated or stayed within ninety
(90) days of such appointment, or (h) an appointment referred to in clause (g)
above is not vacated within ninety (90) days after the expiration of any such
stay.
"Indemnitee" means (i) any Person made a party to a proceeding
by reason of its status as (A) the Previous General Partner or the General
Partner or (B) a director of the Previous General Partner or the General Partner
or an officer or employee of the Partnership or the Previous General Partner or
the General Partner and (ii) such other Persons (including Affiliates of the
General Partner or the Partnership) as the General Partner may designate from
time to time (whether before or after the event giving rise to potential
liability), in its sole and absolute discretion.
"Independent Director" has the meaning ascribed thereto in the
Previous General Partner's 1994 Stock Option Plan.
"Interest" means interest, original issue discount and other
similar payments or amounts paid by the Partnership for the use or forbearance
of money.
"IRS" means the Internal Revenue Service, which administers
the internal revenue laws of the United States.
"Junior Share" means a share of the Previous General Partner's
Class B Common Stock, par value $.01 per share.
"Limited Partner" means the Special Limited Partner and any
Person named as a Limited Partner in Exhibit A attached hereto, as such Exhibit
A may be amended from time to time, or any Substituted Limited Partner or
Additional Limited Partner, in such Person's capacity as a Limited Partner in
the Partnership.
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"Limited Partner Interest" means a Partnership Interest of a
Limited Partner in the Partnership representing a fractional part of the
Partnership Interests of all Limited Partners and includes any and all benefits
to which the holder of such a Partnership Interest may be entitled as provided
in this Agreement, together with all obligations of such Person to comply with
the terms and provisions of this Agreement. A Limited Partner Interest may be
expressed as a number of Partnership Common Units, Partnership Preferred Units
or other Partnership Units.
"Liquidating Event" has the meaning set forth in Section 13.1
hereof.
"Liquidator" has the meaning set forth in Section 13.2.A
hereof.
"Majority in Interest of the Limited Partners" means Limited
Partners (other than (i) the Special Limited Partner and (ii) any Limited
Partner fifty percent (50%) or more of whose equity is owned, directly or
indirectly, by the (a) General Partner or (b) any REIT as to which the General
Partner is a "qualified REIT subsidiary" (within the meaning of Code Section
856(i)(2))) holding more than fifty percent (50%) of the outstanding Partnership
Common Units and Class I High Performance Partnership Units held by all Limited
Partners (other than (i) the Special Limited Partner and (ii) any Limited
Partner fifty percent (50%) or more of whose equity is owned, directly or
indirectly, by (a) the General Partner or (b) any REIT as to which the General
Partner is a "qualified REIT subsidiary" (within the meaning of Code Section
856(i)(2))).
"Net Income" or "Net Loss" means, for each Fiscal Year of the
Partnership, an amount equal to the Partnership's taxable income or loss for
such year, determined in accordance with Code Section 703(a) (for this purpose,
all items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
(a) Any income of the Partnership that is exempt
from federal income tax and not otherwise taken into account in computing Net
Income (or Net Loss) pursuant to this definition of "Net Income" or "Net Loss"
shall be added to (or subtracted from, as the case may be) such taxable income
(or loss);
(b) Any expenditure of the Partnership described in
Code Section 705(a)(2)(B) or treated as a Code Section 705(a)(2)(B) expenditure
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken
into account in computing Net Income (or Net Loss) pursuant to this definition
of "Net Income" or "Net Loss," shall be subtracted from (or added to, as the
case may be) such taxable income (or loss);
(c) In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to subsection (b) or subsection (c) of
the definition of "Gross Asset Value," the amount of such adjustment shall be
taken into account as gain or loss from the disposition of such asset for
purposes of computing Net Income or Net Loss;
(d) Gain or loss resulting from any disposition of
property with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the property
disposed of, notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization and
other cost recovery deductions that would otherwise be taken into account in
computing such taxable income or loss, there shall be taken into account
Depreciation for such Fiscal Year;
(f) To the extent that an adjustment to the adjusted
tax basis of any Partnership asset pursuant to Code Section 734(b) or Code
Section 743(b) is required pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(4)
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to be taken into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Partner's interest in the
Partnership, the amount of such adjustment shall be treated as an item of gain
(if the adjustment increases the basis of the asset) or loss (if the adjustment
decreases the basis of the asset) from the disposition of the asset and shall be
taken into account for purposes of computing Net Income or Net Loss; and
(g) Notwithstanding any other provision of this
definition of "Net Income" or "Net Loss," any item that is specially allocated
pursuant to Section 6.3 hereof shall not be taken into account in computing Net
Income or Net Loss. The amounts of the items of Partnership income, gain, loss
or deduction available to be specially allocated pursuant to Section 6.3 hereof
shall be determined by applying rules analogous to those set forth in this
definition of "Net Income" or "Net Loss."
"New Securities" means (i) any rights, options, warrants or
convertible or exchangeable securities having the right to subscribe for or
purchase REIT Shares or Preferred Shares, excluding Junior Shares, Preferred
Shares and grants under the Previous General Partner's Stock Option Plans, or
(ii) any Debt issued by the Previous General Partner that provides any of the
rights described in clause (i).
"Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for
a Fiscal Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in
Regulations Section 1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption
substantially in the form of Exhibit E attached to this Agreement.
"Optionee" means a Company Employee, Partnership Employee or
Independent Director to whom a stock option is granted under the Previous
General Partner's Stock Option Plans.
"Original Limited Partners" means the Persons listed as the
Limited Partners on Exhibit A originally attached to this Agreement, without
regard to any amendment thereto, and does not include any Assignee or other
transferee, including, without limitation, any Substituted Limited Partner
succeeding to all or any part of the Partnership Interest of any such Person.
"Ownership Limit" means the applicable restriction on
ownership of shares of the Previous General Partner imposed under the Charter.
"Partner" means the General Partner or a Limited Partner, and
"Partners" means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in
Regulations Section 1.704-2(b)(4).
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"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Fiscal Year shall be
determined in accordance with the rules of Regulations Section 1.704-2(i)(2).
"Partnership" means the limited partnership formed under the
Act and pursuant to this Agreement, and any successor thereto.
"Partnership Common Unit" means a fractional share of the
Partnership Interests of all Partners issued pursuant to Sections 4.1 and 4.2
hereof, but does not include any Partnership Preferred Unit or any other
Partnership Unit specified in a Partnership Unit Designation as being other than
a Partnership Common Unit; provided, however, that the General Partner Interest
and the Limited Partner Interests shall have the differences in rights and
privileges as specified in this Agreement. The ownership of Partnership Common
Units may (but need not, in the sole and absolute discretion of the General
Partner) be evidenced by the form of certificate for Partnership Common Units
attached hereto as Exhibit F.
"Partnership Employee" has the meaning ascribed thereto in the
Previous General Partner's 1994 Stock Option Plan.
"Partnership Interest" means an ownership interest in the
Partnership held by either a Limited Partner or the General Partner and includes
any and all benefits to which the holder of such a Partnership Interest may be
entitled as provided in this Agreement, together with all obligations of such
Person to comply with the terms and provisions of this Agreement. A Partnership
Interest may be expressed as a number of Partnership Common Units, Partnership
Preferred Units or other Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,
as well as any net increase or decrease in Partnership Minimum Gain, for a
Fiscal Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).
"Partnership Preferred Unit" means a fractional share of the
Partnership Interests that the General Partner has authorized pursuant to
Section 4.2 hereof that has distribution rights, or rights upon liquidation,
winding up and dissolution, that are superior or prior to the Partnership Common
Units.
"Partnership Record Date" means the record date established by
the General Partner for the distribution of Available Cash pursuant to Section
5.1 hereof, which record date shall generally be the same as the record date
established by the Previous General Partner for a distribution to its
shareholders of some or all of its portion of such distribution.
"Partnership Subsidiary" has the meaning ascribed thereto in
the Apartment Investment and Management Company 1997 Stock Award and Incentive
Plan.
"Partnership Unit" shall mean a Partnership Common Unit, a
Partnership Preferred Unit or any other fractional share of the Partnership
Interests that the General Partner has authorized pursuant to Section 4.2
hereof.
"Partnership Unit Designation" shall have the meaning set
forth in Section 4.2 hereof.
"Percentage Interest" means, as to each Partner, its interest
in the Partnership Units as determined by dividing the Partnership Units owned
by such Partner by the total number of Partnership Units then outstanding.
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"Permitted Transfer" has the meaning set forth in Section
11.3.A hereof.
"Person" means an individual or a corporation, partnership,
trust, unincorporated organization, association, limited liability company or
other entity.
"Pledge" has the meaning set forth in Section 11.3.A hereof.
"Preferred Share" means a share of capital stock of the
Previous General Partner now or hereafter authorized or reclassified that has
dividend rights, or rights upon liquidation, winding up and dissolution, that
are superior or prior to the REIT Shares.
"Previous General Partner" means Apartment Investment and
Management Company, a Maryland corporation.
"Previous General Partner's 1994 Stock Option Plan" means the
1994 Stock Option Plan of Apartment Investment and Management Company and
Affiliates.
"Previous General Partner's Stock Option Plans" means the
Previous General Partner's 1994 Stock Option Plan, the Apartment Investment and
Management Company 1996 Stock Award and Incentive Plan, the Amended and Restated
Apartment Investment and Management Company Non-Qualified Employee Stock Option
Plan, the Apartment Investment and Management Company 1997 Stock Award and
Incentive Plan and any other stock option plan adopted by the Previous General
Partner.
"Primary Offering Notice" has the meaning set forth in Section
8.6.F(4) hereof.
"Properties" means any assets and property of the Partnership
such as, but not limited to, interests in real property and personal property,
including, without limitation, fee interests, interests in ground leases,
interests in limited liability companies, joint ventures or partnerships,
interests in mortgages, and Debt instruments as the Partnership may hold from
time to time.
"Public Offering Funding" has the meaning set forth in Section
8.6.D(2) hereof.
"Public Offering Funding Amount" means the dollar amount equal
to (i) the product of (x) the number of Registrable Shares sold in a Public
Offering Funding and (y) the public offering price per share of such Registrable
Shares in such Public Offering Funding, less (ii) the aggregate underwriting
discounts and commissions in such Public Offering Funding.
"Qualified Transferee" means an "accredited investor" as
defined in Rule 501 promulgated under the Securities Act.
"Qualifying Party" means (a) an Original Limited Partner, (b)
an Additional Limited Partner, (c) a Designated Party that is either a
Substituted Limited Partner or an Assignee, (d) a Family Member, or a lending
institution as the pledgee of a Pledge, who is the transferee in a Permitted
Transfer or (e) with respect to any Notice of Redemption delivered to the
General Partner within the time period set forth in Section 11.3.A(4) hereof, a
Substituted Limited Partner succeeding to all or part of the Limited Partner
Interest of (i) an Original Limited Partner, (ii) an Additional Limited Partner,
(iii) a Designated Party that is either a Substituted Limited Partner or an
Assignee or (iv) a Family Member, or a lending institution who is the pledgee of
a Pledge, who is the transferee in a Permitted Transfer.
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"Redeemable Units" means those Partnership Common Units issued
to the Original Limited Partners as of the Effective Date together with such
additional Partnership Common Units that, after the Effective Date, may be
issued to Additional Limited Partners pursuant to Section 4.2 hereof.
"Redemption" has the meaning set forth in Section 8.6.A
hereof.
"Registrable Shares" has the meaning set forth in Section
8.6.D(2) hereof.
"Regulations" means the applicable income tax regulations
under the Code, whether such regulations are in proposed, temporary or final
form, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Regulatory Allocations" has the meaning set forth in Section
6.3.B(viii) hereof.
"REIT" means a real estate investment trust qualifying under
Code Section 856.
"REIT Partner" means (a) a Partner that is, or has made an
election to qualify as, a REIT, (b) any "qualified REIT subsidiary" (within the
meaning of Code Section 856(i)(2)) of any Partner that is, or has made an
election to qualify as, a REIT and (c) any Partner, including, without
limitation, the General Partner and the Special Limited Partner, that is a
"qualified REIT subsidiary" (within the meaning of Code Section 856(i)(2)) of a
REIT.
"REIT Payment" has the meaning set forth in Section 15.11
hereof.
"REIT Requirements" has the meaning set forth in Section 5.1.A
hereof.
"REIT Share" means a share of the Previous General Partner's
Class A Common Stock, par value $.01 per share. Where relevant in this
Agreement, "REIT Shares" includes shares of the Previous General Partner's Class
A Common Stock, par value $.01 per share, issued upon conversion of Preferred
Shares or Junior Shares.
"REIT Shares Amount" means a number of REIT Shares equal to
the product of (a) the number of Tendered Units and (b) the Adjustment Factor;
provided, however, that, in the event that the Previous General Partner issues
to all holders of REIT Shares as of a certain record date rights, options,
warrants or convertible or exchangeable securities entitling the Previous
General Partner's shareholders to subscribe for or purchase REIT Shares, or any
other securities or property (collectively, the "Rights"), with the record date
for such Rights issuance falling within the period starting on the date of the
Notice of Redemption and ending on the day immediately preceding the Specified
Redemption Date, which Rights will not be distributed before the relevant
Specified Redemption Date, then the REIT Shares Amount shall also include such
Rights that a holder of that number of REIT Shares would be entitled to receive,
expressed, where relevant hereunder, in a number of REIT Shares determined by
the Previous General Partner in good faith.
"Related Party" means, with respect to any Person, any other
Person whose ownership of shares of the Previous General Partner's capital stock
would be attributed to the first such Person under Code Section 544 (as modified
by Code Section 856(h)(1)(B)).
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"Rights" has the meaning set forth in the definition of "REIT
Shares Amount."
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Single Funding Notice" has the meaning set forth in Section
8.6.D(3) hereof.
"Special Limited Partner" means AIMCO-LP, Inc., a Delaware
corporation.
"Specified Redemption Date" means the later of (a) the tenth
(10th) Business Day after the receipt by the General Partner of a Notice of
Redemption or (b) in the case of a Declination followed by a Public Offering
Funding, the Business Day next following the date of the closing of the Public
Offering Funding; provided, however, that no Specified Redemption Date shall
occur during the first Twelve-Month Period; provided, further, that the
Specified Redemption Date, as well as the closing of a Redemption, or an
acquisition of Tendered Units by the Previous General Partner pursuant to
Section 8.6.B hereof, on any Specified Redemption Date, may be deferred, in the
General Partner's sole and absolute discretion, for such time (but in any event
not more than one hundred fifty (150) days in the aggregate) as may reasonably
be required to effect, as applicable, (i) a Public Offering Funding or other
necessary funding arrangements, (ii) compliance with the Securities Act or other
law (including, but not limited to, (a) state "blue sky" or other securities
laws and (b) the expiration or termination of the applicable waiting period, if
any, under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended)
and (iii) satisfaction or waiver of other commercially reasonable and customary
closing conditions and requirements for a transaction of such nature.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which a majority of (i) the voting power of the
voting equity securities or (ii) the outstanding equity interests is owned,
directly or indirectly, by such Person; provided, however, that, with respect to
the Partnership, "Subsidiary" means solely a partnership or limited liability
company (taxed, for federal income tax purposes, as a partnership and not as an
association or publicly traded partnership taxable as a corporation) of which
the Partnership is a member unless the General Partner has received an
unqualified opinion from independent counsel of recognized standing, or a ruling
from the IRS, that the ownership of shares of stock of a corporation or other
entity will not jeopardize the Previous General Partner's status as a REIT or
the General Partner's or the Special Limited Partner's status as a "qualified
REIT subsidiary" (within the meaning of Code Section 856(i)(2)), in which event
the term "Subsidiary" shall include the corporation or other entity which is the
subject of such opinion or ruling.
"Substituted Limited Partner" means a Person who is admitted
as a Limited Partner to the Partnership pursuant to Section 11.4 hereof.
"Tax Items" has the meaning set forth in Section 6.4.A hereof.
"Tendered Units" has the meaning set forth in Section 8.6.A
hereof.
"Tendering Party" has the meaning set forth in Section 8.6.A
hereof.
"Terminating Capital Transaction" means any sale or other
disposition of all or substantially all of the assets of the Partnership or a
related series of transactions that, taken together, result in the sale or other
disposition of all or substantially all of the assets of the Partnership.
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"Transfer," when used with respect to a Partnership Unit, or
all or any portion of a Partnership Interest, means any sale, assignment,
bequest, conveyance, devise, gift (outright or in trust), Pledge, encumbrance,
hypothecation, mortgage, exchange, transfer or other disposition or act of
alienation, whether voluntary or involuntary or by operation of law; provided,
however, that when the term is used in Article 11 hereof, "Transfer" does not
include (a) any Redemption of Partnership Common Units by the Partnership, or
acquisition of Tendered Units by the Previous General Partner, pursuant to
Section 8.6 hereof or (b) any redemption of Partnership Units pursuant to any
Partnership Unit Designation. The terms "Transferred" and "Transferring" have
correlative meanings.
"Twelve-Month Period" means (a) as to an Original Limited
Partner or any successor-in-interest that is a Qualifying Party, a twelve-month
period ending on the day before the first (1st) anniversary of the Effective
Date or on the day before a subsequent anniversary thereof and (b) as to any
other Qualifying Party, a twelve-month period ending on the day before the first
(1st) anniversary of such Qualifying Party's becoming a Holder of Partnership
Common Units or on the day before a subsequent anniversary thereof; provided,
however, that the General Partner may, in its sole and absolute discretion, by
written agreement with a Qualifying Party, shorten the first Twelve-Month Period
to a period of less than twelve (12) months with respect to a Qualifying Party
other than an Original Limited Partner or successor-in-interest.
"Unitholder" means the General Partner or any Holder of
Partnership Units.
"Valuation Date" means the date of receipt by the General
Partner of a Notice of Redemption or, if such date is not a Business Day, the
immediately preceding Business Day.
"Value" means, on any Valuation Date with respect to a REIT
Share, the average of the daily market prices for ten (10) consecutive trading
days immediately preceding the Valuation Date (except that, as provided in
Section 4.4.C. hereof, the market price for the trading day immediately
preceding the date of exercise of a stock option under the Previous General
Partner's Stock Option Plans shall be substituted for such average of daily
market prices for purposes of Section 4.4 hereof). The market price for any such
trading day shall be:
(i) if the REIT Shares are listed or admitted to trading on
any securities exchange or The Nasdaq Stock Market's National Market
System, the closing price, regular way, on such day, or if no such sale
takes place on such day, the average of the closing bid and asked
prices on such day, in either case as reported in the principal
consolidated transaction reporting system,
(ii) if the REIT Shares are not listed or admitted to trading
on any securities exchange or The Nasdaq Stock Market's National Market
System, the last reported sale price on such day or, if no sale takes
place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the
General Partner, or
(iii) if the REIT Shares are not listed or admitted to trading
on any securities exchange or The Nasdaq Stock Market's National Market
System and no such last reported sale price or closing bid and asked
prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source
designated by the General Partner, or if there shall be no bid and
asked prices on such day, the average of the high bid and low asked
prices, as so reported, on the most recent day (not more than ten (10)
days prior to the date in question) for which prices have been so
reported;
provided, however, that, if there are no bid and asked prices reported during
the ten (10) days prior to the date in question, the Value of the REIT Shares
shall be determined by the General Partner acting in good faith on the basis
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of such quotations and other information as it considers, in its reasonable
judgment, appropriate. In the event that the REIT Shares Amount includes Rights
(as defined in the definition of "REIT Shares Amount") that a holder of REIT
Shares would be entitled to receive, then the Value of such Rights shall be
determined by the General Partner acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate.
ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1 Organization. The Partnership is a limited
partnership organized pursuant to the provisions of the Act and upon the terms
and subject to the conditions set forth in this Agreement. Except as expressly
provided herein to the contrary, the rights and obligations of the Partners and
the administration and termination of the Partnership shall be governed by the
Act. The Partnership Interest of each Partner shall be personal property for all
purposes.
Section 2.2 Name. The name of the Partnership is "AIMCO
Properties, L.P." The Partnership's business may be conducted under any other
name or names deemed advisable by the General Partner, including the name of the
General Partner or any Affiliate thereof. The words "Limited Partnership,"
"L.P.," "Ltd." or similar words or letters shall be included in the
Partnership's name where necessary for the purposes of complying with the laws
of any jurisdiction that so requires. The General Partner in its sole and
absolute discretion may change the name of the Partnership at any time and from
time to time and shall notify the Partners of such change in the next regular
communication to the Partners.
Section 2.3 Registered Office and Agent; Principal Office. The
address of the registered office of the Partnership in the State of Delaware is
located at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the
registered agent for service of process on the Partnership in the State of
Delaware at such registered office is The PrenticeHall Corporation System, Inc.
The principal office of the Partnership is located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as the General Partner may
from time to time designate by notice to the Limited Partners. The Partnership
may maintain offices at such other place or places within or outside the State
of Delaware as the General Partner deems advisable.
Section 2.4 Power of Attorney.
A. Each Limited Partner and each Assignee hereby irrevocably
constitutes and appoints the General Partner, any Liquidator, and authorized
officers and attorneys-in-fact of each, and each of those acting singly, in each
case with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and stead to:
(1) execute, swear to, seal, acknowledge, deliver, file and
record in the appropriate public offices (a) all certificates,
documents and other instruments (including, without limitation, this
Agreement and the Certificate and all amendments, supplements or
restatements thereof) that the General Partner or the Liquidator deems
appropriate or necessary to form, qualify or continue the existence or
qualification of the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability to the
extent provided by applicable law) in the State of Delaware and in all
other jurisdictions in which the Partnership may conduct business or
own property; (b) all instruments that the General Partner deems
appropriate or necessary to reflect any amendment, change, modification
or restatement of this Agreement
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in accordance with its terms; (c) all conveyances and other instruments
or documents that the General Partner or the Liquidator deems
appropriate or necessary to reflect the dissolution and liquidation of
the Partnership pursuant to the terms of this Agreement, including,
without limitation, a certificate of cancellation; (d) all conveyances
and other instruments or documents that the General Partner or the
Liquidator deems appropriate or necessary to reflect the distribution
or exchange of assets of the Partnership pursuant to the terms of this
Agreement; (e) all instruments relating to the admission, withdrawal,
removal or substitution of any Partner pursuant to, or other events
described in, Article 11, Article 12 or Article 13 hereof or the
Capital Contribution of any Partner; and (f) all certificates,
documents and other instruments relating to the determination of the
rights, preferences and privileges relating to Partnership Interests;
and
(2) execute, swear to, acknowledge and file all ballots,
consents, approvals, waivers, certificates and other instruments
appropriate or necessary, in the sole and absolute discretion of the
General Partner, to make, evidence, give, confirm or ratify any vote,
consent, approval, agreement or other action that is made or given by
the Partners hereunder or is consistent with the terms of this
Agreement or appropriate or necessary, in the sole and absolute
discretion of the General Partner, to effectuate the terms or intent of
this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
to amend this Agreement except in accordance with Article 14 hereof or as may be
otherwise expressly provided for in this Agreement.
B. The foregoing power of attorney is hereby declared to be
irrevocable and a special power coupled with an interest, in recognition of the
fact that each of the Limited Partners and Assignees will be relying upon the
power of the General Partner or the Liquidator to act as contemplated by this
Agreement in any filing or other action by it on behalf of the Partnership, and
it shall survive and not be affected by the subsequent Incapacity of any Limited
Partner or Assignee and the Transfer of all or any portion of such Limited
Partner's or Assignee's Partnership Units or Partnership Interest and shall
extend to such Limited Partner's or Assignee's heirs, successors, assigns and
personal representatives. Each such Limited Partner or Assignee hereby agrees to
be bound by any representation made by the General Partner or the Liquidator,
acting in good faith pursuant to such power of attorney; and each such Limited
Partner or Assignee hereby waives any and all defenses that may be available to
contest, negate or disaffirm the action of the General Partner or the
Liquidator, taken in good faith under such power of attorney. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the
Liquidator, within fifteen (15) days after receipt of the General Partner's or
the Liquidator's request therefor, such further designation, powers of attorney
and other instruments as the General Partner or the Liquidator, as the case may
be, deems necessary to effectuate this Agreement and the purposes of the
Partnership.
Section 2.5 Term. The term of the Partnership commenced on May
16, 1994, the date that the original Certificate was filed in the office of the
Secretary of State of Delaware in accordance with the Act, and shall continue
until December 31, 2093 unless the Partnership is dissolved sooner pursuant to
the provisions of Article 13 hereof or as otherwise provided by law.
ARTICLE 3
PURPOSE
Section 3.1 Purpose and Business. The purpose and nature of
the Partnership is to conduct any business, enterprise or activity permitted by
or under the Act, including, but not limited to, (i) to conduct the business of
ownership, construction, development and operation of multifamily rental
apartment communities, (ii) to enter into
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any partnership, joint venture, business trust arrangement, limited liability
company or other similar arrangement to engage in any business permitted by or
under the Act, or to own interests in any entity engaged in any business
permitted by or under the Act, (iii) to conduct the business of providing
property and asset management and brokerage services, whether directly or
through one or more partnerships, joint ventures, subsidiaries, business trusts,
limited liability companies or other similar arrangements, and (iv) to do
anything necessary or incidental to the foregoing; provided, however, such
business and arrangements and interests may be limited to and conducted in such
a manner as to permit the Previous General Partner, in the sole and absolute
discretion of the General Partner, at all times to be classified as a REIT.
Section 3.2 Powers.
A. The Partnership shall be empowered to do any and all acts
and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and business
described herein and for the protection and benefit of the Partnership.
B. Notwithstanding any other provision in this Agreement, the
General Partner may cause the Partnership not to take, or to refrain from
taking, any action that, in the judgment of the General Partner, in its sole and
absolute discretion, (i) could adversely affect the ability of the Previous
General Partner to continue to qualify as a REIT, (ii) could subject the
Previous General Partner to any additional taxes under Code Section 857 or Code
Section 4981 or (iii) could violate any law or regulation of any governmental
body or agency having jurisdiction over the Previous General Partner, the
General Partner, their securities or the Partnership, unless such action (or
inaction) under clause (i), clause (ii) or clause (iii) above shall have been
specifically consented to by the Previous General Partner and the General
Partner in writing.
Section 3.3 Partnership Only for Purposes Specified. The
Partnership shall be a limited partnership only for the purposes specified in
Section 3.1 hereof, and this Agreement shall not be deemed to create a company,
venture or partnership between or among the Partners with respect to any
activities whatsoever other than the activities within the purposes of the
Partnership as specified in Section 3.1 hereof. Except as otherwise provided in
this Agreement, no Partner shall have any authority to act for, bind, commit or
assume any obligation or responsibility on behalf of the Partnership, its
properties or any other Partner. No Partner, in its capacity as a Partner under
this Agreement, shall be responsible or liable for any indebtedness or
obligation of another Partner, nor shall the Partnership be responsible or
liable for any indebtedness or obligation of any Partner, incurred either before
or after the execution and delivery of this Agreement by such Partner, except as
to those responsibilities, liabilities, indebtedness or obligations incurred
pursuant to and as limited by the terms of this Agreement and the Act.
Section 3.4 Representations and Warranties by the Parties.
A. Each Partner that is an individual (including, without
limitation, each Additional Limited Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner or a Substituted Limited
Partner) represents and warrants to each other Partner(s) that (i) the
consummation of the transactions contemplated by this Agreement to be performed
by such Partner will not result in a breach or violation of, or a default under,
any material agreement by which such Partner or any of such Partner's property
is bound, or any statute, regulation, order or other law to which such Partner
is subject, (ii) such Partner is neither a "foreign person" within the meaning
of Code Section 1445(f) nor a "foreign partner" within the meaning of Code
Section 1446(e), (iii) such Partner does not own, directly or indirectly, (a)
five percent (5%) or more of the total combined voting power of all classes of
stock entitled to vote, or five percent (5%) or more of the total number of
shares of all classes of stock, of any corporation that is a tenant of either
(I) the Previous General Partner, the General Partner, the Special Limited
Partner or any "qualified REIT subsidiary" (within the meaning of Code Section
856(i)(2)) with respect to the Previous General Partner, (II) the Partnership or
(III) any partnership, venture or limited liability company of which the
Previous General Partner, the General Partner, the Special Limited Partner, any
"qualified REIT subsidiary" (within the meaning of Code Section 856(i)(2)) with
respect to the Previous General Partner or the Partnership is a member or (b) an
interest of five percent (5%) or more in the assets or net profits of any tenant
of either (I) the Previous General Partner, the General Partner, the Special
Limited
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Partner or any "qualified REIT subsidiary" (within the meaning of Code
Section 856(i)(2)) with respect to the Previous General Partner, (II) the
Partnership or (III) any partnership, venture, or limited liability company of
which the Previous General Partner, the General Partner, the Special Limited
Partner, any "qualified REIT subsidiary" (within the meaning of Code Section
856(i)(2)) with respect to the Previous General Partner or the Partnership is a
member and (iv) this Agreement is binding upon, and enforceable against, such
Partner in accordance with its terms.
B. Each Partner that is not an individual (including, without
limitation, each Additional Limited Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner or a Substituted Limited
Partner) represents and warrants to each other Partner(s) that (i) all
transactions contemplated by this Agreement to be performed by it have been duly
authorized by all necessary action, including, without limitation, that of its
general partner(s), committee(s), trustee(s), beneficiaries, directors and/or
shareholder(s), as the case may be, as required, (ii) the consummation of such
transactions shall not result in a breach or violation of, or a default under,
its partnership or operating agreement, trust agreement, charter or bylaws, as
the case may be, any material agreement by which such Partner or any of such
Partner's properties or any of its partners, members, beneficiaries, trustees or
shareholders, as the case may be, is or are bound, or any statute, regulation,
order or other law to which such Partner or any of its partners, members,
trustees, beneficiaries or shareholders, as the case may be, is or are subject,
(iii) such Partner is neither a "foreign person" within the meaning of Code
Section 1445(f) nor a "foreign partner" within the meaning of Code Section
1446(e), (iv) such Partner does not own, directly or indirectly, (a) five
percent (5%) or more of the total combined voting power of all classes of stock
entitled to vote, or five percent (5%) or more of the total number of shares of
all classes of stock, of any corporation that is a tenant of either (I) the
Previous General Partner, the General Partner, the Special Limited Partner or
any "qualified REIT subsidiary" (within the meaning of Code Section 856(i)(2))
with respect to the Previous General Partner, (II) the Partnership or (III) any
partnership, venture or limited liability company of which the Previous General
Partner, the General Partner, the Special Limited Partner, any "qualified REIT
subsidiary" (within the meaning of Code Section 856(i)(2)) with respect to the
Previous General Partner or the Partnership is a member or (b) an interest of
five percent (5%) or more in the assets or net profits of any tenant of either
(I) the Previous General Partner, the General Partner the Special Limited
Partner or any "qualified REIT subsidiary" (within the meaning of Code Section
856(i)(2)) with respect to the Previous General Partner, (II) the Partnership or
(III) any partnership, venture or limited liability company for which the
Previous General Partner, the General Partner, the Special Limited Partner, any
"qualified REIT subsidiary" (within the meaning of Code Section 856(i)(2)) with
respect to the Previous General Partner or the Partnership is a member and (v)
this Agreement is binding upon, and enforceable against, such Partner in
accordance with its terms.
C. Each Partner (including, without limitation, each
Substituted Limited Partner as a condition to becoming a Substituted Limited
Partner) represents, warrants and agrees that it has acquired and continues to
hold its interest in the Partnership for its own account for investment only and
not for the purpose of, or with a view toward, the resale or distribution of all
or any part thereof, nor with a view toward selling or otherwise distributing
such interest or any part thereof at any particular time or under any
predetermined circumstances. Each Partner further represents and warrants that
it is a sophisticated investor, able and accustomed to handling sophisticated
financial matters for itself, particularly real estate investments, and that it
has a sufficiently high net worth that it does not anticipate a need for the
funds that it has invested in the Partnership in what it understands to be a
highly speculative and illiquid investment.
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D. The representations and warranties contained in Sections
3.4.A, 3.4.B and 3.4.C hereof shall survive the execution and delivery of this
Agreement by each Partner (and, in the case of an Additional Limited Partner or
a Substituted Limited Partner, the admission of such Additional Limited Partner
or Substituted Limited Partner as a Limited Partner in the Partnership) and the
dissolution, liquidation and termination of the Partnership.
E. Each Partner (including, without limitation, each
Substituted Limited Partner as a condition to becoming a Substituted Limited
Partner) hereby acknowledges that no representations as to potential profit,
cash flows, funds from operations or yield, if any, in respect of the
Partnership or the General Partner have been made by any Partner or any employee
or representative or Affiliate of any Partner, and that projections and any
other information, including, without limitation, financial and descriptive
information and documentation, that may have been in any manner submitted to
such Partner shall not constitute any representation or warranty of any kind or
nature, express or implied.
ARTICLE 4
CAPITAL CONTRIBUTIONS
Section 4.1 Capital Contributions of the Partners. The
Partners have heretofore made Capital Contributions to the Partnership. Each
Partner owns Partnership Units in the amount set forth for such Partner on
Exhibit A, as the same may be amended from time to time by the General Partner
to the extent necessary to reflect accurately sales, exchanges or other
Transfers, redemptions, Capital Contributions, the issuance of additional
Partnership Units, or similar events having an effect on a Partner's ownership
of Partnership Units. Except as provided by law or in Section 4.2, 4.3 or 10.4
hereof, the Partners shall have no obligation or right to make any additional
Capital Contributions or loans to the Partnership.
Section 4.2 Issuances of Additional Partnership Interests.
A. General. The General Partner is hereby authorized to cause
the Partnership to issue additional Partnership Interests, in the form of
Partnership Units, for any Partnership purpose, at any time or from time to
time, to the Partners (including the General Partner and the Special Limited
Partner) or to other Persons, and to admit such Persons as Additional Limited
Partners, for such consideration and on such terms and conditions as shall be
established by the General Partner in its sole and absolute discretion, all
without the approval of any Limited Partners. Without limiting the foregoing,
the General Partner is expressly authorized to cause the Partnership to issue
Partnership Units (i) upon the conversion, redemption or exchange of any Debt,
Partnership Units or other securities issued by the Partnership, (ii) for less
than fair market value, so long as the General Partner concludes in good faith
that such issuance is in the best interests of the General Partner and the
Partnership, and (iii) in connection with any merger of any other Person into
the Partnership if the applicable merger agreement provides that Persons are to
receive Partnership Units in exchange for their interests in the Person merging
into the Partnership. Subject to Delaware law, any additional Partnership
Interests may be issued in one or more classes, or one or more series of any of
such classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties as shall be determined by
the General Partner, in its sole and absolute discretion without the approval of
any Limited Partner, and set forth in a written document thereafter attached to
and made an exhibit to this Agreement (each, a "Partnership Unit Designation").
Without limiting the generality of the foregoing, the General Partner shall have
authority to specify (a) the allocations of items of Partnership income, gain,
loss, deduction and credit to each such class or series of Partnership
Interests; (b) the right of each such class or series of Partnership Interests
to share in Partnership distributions; (c) the rights of each such class or
series of Partnership Interests upon dissolution and liquidation of the
Partnership; (d) the voting rights, if any, of each such class or series of
Partnership Interests; and
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(e) the conversion, redemption or exchange rights applicable to each such class
or series of Partnership Interests. Upon the issuance of any additional
Partnership Interest, the General Partner shall amend Exhibit A as appropriate
to reflect such issuance.
B. Issuances to the General Partner or Special Limited
Partner. No additional Partnership Units shall be issued to the General Partner
or the Special Limited Partner unless (i) the additional Partnership Units are
issued to all Partners in proportion to their respective Percentage Interests,
(ii) (a) the additional Partnership Units are (x) Partnership Common Units
issued in connection with an issuance of REIT Shares, or (y) Partnership Units
(other than Partnership Common Units) issued in connection with an issuance of
Preferred Shares, New Securities or other interests in the Previous General
Partner (other than REIT Shares), which Preferred Shares, New Securities or
other interests have designations, preferences and other rights, terms and
provisions that are substantially the same as the designations, preferences and
other rights, terms and provisions of the additional Partnership Units issued to
the General Partner or the Special Limited Partner, and (b) the General Partner
or the Special Limited Partner, as the case may be, contributes to the
Partnership the cash proceeds or other consideration received in connection with
the issuance of such REIT Shares, Preferred Shares, New Securities or other
interests in the Previous General Partner, (iii) the additional Partnership
Units are issued upon the conversion, redemption or exchange of Debt,
Partnership Units or other securities issued by the Partnership, or (iv) the
additional Partnership Units are issued pursuant to Section 4.6.
C. No Preemptive Rights. No Person, including, without
limitation, any Partner or Assignee, shall have any preemptive, preferential,
participation or similar right or rights to subscribe for or acquire any
Partnership Interest.
Section 4.3 Additional Funds.
A. General. The General Partner may, at any time and from time
to time, determine that the Partnership requires additional funds ("Additional
Funds") for the acquisition or development of additional Properties, for the
redemption of Partnership Units or for such other purposes as the General
Partner may determine. Additional Funds may be obtained by the Partnership, at
the election of the General Partner, in any manner provided in, and in
accordance with, the terms of this Section 4.3 without the approval of any
Limited Partners.
B. Additional Capital Contributions. The General Partner, on
behalf of the Partnership, may obtain any Additional Funds by accepting Capital
Contributions from any Partners or other Persons and issuing additional
Partnership Units in consideration therefor.
C. Loans by Third Parties. The General Partner, on behalf of
the Partnership, may obtain any Additional Funds by causing the Partnership to
incur Debt to any Person (other than the Previous General Partner, the General
Partner or the Special Limited Partner) upon such terms as the General Partner
determines appropriate, including making such Debt convertible, redeemable or
exchangeable for Partnership Units; provided, however, that the Partnership
shall not incur any such Debt if (i) a breach, violation or default of such Debt
would be deemed to occur by virtue of the Transfer of any Partnership Interest,
or (ii) such Debt is recourse to any Partner (unless the Partner otherwise
agrees).
D. General Partner Loans. The General Partner, on behalf of
the Partnership, may obtain any Additional Funds by causing the Partnership to
incur Debt with the Previous General Partner, the General Partner or the Special
Limited Partner (each, a "General Partner Loan") if (i) such Debt is, to the
extent permitted by law, on substantially the same terms and conditions
(including interest rate, repayment schedule, and conversion, redemption,
repurchase and exchange rights) as Funding Debt incurred by the Previous General
Partner, the General Partner or the
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Special Limited Partner, the net proceeds of which are loaned to the Partnership
to provide such Additional Funds, or (ii) such Debt is on terms and conditions
no less favorable to the Partnership than would be available to the Partnership
from any third party; provided, however, that the Partnership shall not incur
any such Debt if (a) a breach, violation or default of such Debt would be deemed
to occur by virtue of the Transfer of any Partnership Interest, or (b) such Debt
is recourse to any Partner (unless the Partner otherwise agrees).
E. Issuance of Securities by the Previous General Partner. The
Previous General Partner shall not issue any additional REIT Shares, Preferred
Shares, Junior Shares or New Securities unless (i) the Previous General Partner
contributes the cash proceeds or other consideration received from the issuance
of such additional REIT Shares, Preferred Shares, Junior Shares or New
Securities, as the case may be, and from the exercise of the rights contained in
any such additional New Securities, to either or both of the General Partner and
the Special Limited Partner, and (ii) it or they, as the case may be, contribute
such cash proceeds or other consideration to the Partnership in exchange for (x)
in the case of an issuance of REIT Shares, Partnership Common Units, or (y) in
the case of an issuance of Preferred Shares, Junior Shares or New Securities,
Partnership Units with designations, preferences and other rights, terms and
provisions that are substantially the same as the designations, preferences and
other rights, terms and provisions of such Preferred Shares, Junior Shares or
New Securities; provided, however, that notwithstanding the foregoing, the
Previous General Partner may issue REIT Shares, Preferred Shares, Junior Shares
or New Securities (a) pursuant to Section 4.4 or Section 8.6.B hereof, (b)
pursuant to a dividend or distribution (including any stock split) of REIT
Shares, Preferred Shares, Junior Shares or New Securities to all of the holders
of REIT Shares, Preferred Shares, Junior Shares or New Securities, as the case
may be, (c) upon a conversion, redemption or exchange of Preferred Shares, (d)
upon a conversion of Junior Shares into REIT Shares, (e) upon a conversion,
redemption, exchange or exercise of New Securities, or (f) in connection with an
acquisition of a property or other asset to be owned, directly or indirectly, by
the Previous General Partner if the General Partner determines that such
acquisition is in the best interests of the Partnership. In the event of any
issuance of additional REIT Shares, Preferred Shares, Junior Shares or New
Securities by the Previous General Partner, and the contribution to the
Partnership, by the General Partner or the Special Limited Partner, of the cash
proceeds or other consideration received from such issuance, the Partnership
shall pay the Previous General Partner's expenses associated with such issuance,
including any underwriting discounts or commissions.
Section 4.4 Stock Option Plans.
A. Options Granted to Company Employees and Independent
Directors. If at any time or from time to time, in connection with the Previous
General Partner's Stock Option Plans, a stock option granted to a Company
Employee or Independent Director is duly exercised:
(1) The Special Limited Partner shall, as soon as practicable
after such exercise, make a Capital Contribution to the Partnership in
an amount equal to the exercise price paid to the Previous General
Partner by such exercising party in connection with the exercise of
such stock option.
(2) Notwithstanding the amount of the Capital Contribution
actually made pursuant to Section 4.4.A(1) hereof, the Special Limited
Partner shall be deemed to have contributed to the Partnership as a
Capital Contribution, in consideration of an additional Limited Partner
Interest (expressed in and as additional Partnership Common Units), an
amount equal to the Value of a REIT Share as of the date of exercise
multiplied by the number of REIT Shares then being issued in connection
with the exercise of such stock option.
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(3) An equitable Percentage Interest adjustment shall be made
in which the Special Limited Partner shall be treated as having made a
cash contribution equal to the amount described in Section 4.4.A(2)
hereof.
B. Options Granted to Partnership Employees. If at any time or
from time to time, in connection with the Previous General Partner's Stock
Option Plans, a stock option granted to a Partnership Employee is duly
exercised:
(1) The General Partner shall cause the Previous General
Partner to sell to the Partnership, and the Partnership shall purchase
from the Previous General Partner, the number of REIT Shares as to
which such stock option is being exercised. The purchase price per REIT
Share for such sale of REIT Shares to the Partnership shall be the
Value of a REIT Share as of the date of exercise of such stock option.
(2) The Partnership shall sell to the Optionee (or if the
Optionee is an employee of a Partnership Subsidiary, the Partnership
shall sell to such Partnership Subsidiary, which in turn shall sell to
the Optionee), for a cash price per share equal to the Value of a REIT
Share at the time of the exercise, the number of REIT Shares equal to
(a) the exercise price paid to the Previous General Partner by the
exercising party in connection with the exercise of such stock option
divided by (b) the Value of a REIT Share at the time of such exercise.
(3) The Partnership shall transfer to the Optionee (or if the
Optionee is an employee of a Partnership Subsidiary, the Partnership
shall transfer to such Partnership Subsidiary, which in turn shall
transfer to the Optionee) at no additional cost, as additional
compensation, the number of REIT Shares equal to the number of REIT
Shares described in Section 4.4.B(1) hereof less the number of REIT
Shares described in Section 4.4.B(2) hereof.
(4) The Special Limited Partner shall, as soon as practicable
after such exercise, make a Capital Contribution to the Partnership of
an amount equal to all proceeds received (from whatever source, but
excluding any payment in respect of payroll taxes or other
withholdings) by the Previous General Partner, the General Partner or
the Special Limited Partner in connection with the exercise of such
stock option. An equitable Percentage Interest adjustment shall be made
in which the Special Limited Partner shall be treated as having made a
cash contribution equal to the amount described in Section 4.4.B(1)
hereof.
C. Special Valuation Rule. For purposes of this Section 4.4,
in determining the Value of a REIT Share, only the trading date immediately
preceding the exercise of the relevant stock option under the Previous General
Partner's Stock Option Plans shall be considered.
D. Future Stock Incentive Plans. Nothing in this Agreement
shall be construed or applied to preclude or restrain the Previous General
Partner, the General Partner or the Special Limited Partner from adopting,
modifying or terminating stock incentive plans, in addition to the Previous
General Partner's Stock Option Plans, for the benefit of employees, directors or
other business associates of the Previous General Partner, the General Partner,
the Special Limited Partner, the Partnership or any of their Affiliates. The
Limited Partners acknowledge and agree that, in the event that any such plan is
adopted, modified or terminated by the Previous General Partner, the General
Partner or the Special Limited Partner amendments to this Section 4.4 may become
necessary or advisable and that any approval or consent to any such amendments
requested by the Previous General Partner, the General Partner or the Special
Limited Partner shall not be unreasonably withheld or delayed.
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Section 4.5 No Interest; No Return. No Partner shall be
entitled to interest on its Capital Contribution or on such Partner's Capital
Account. Except as provided herein or by law, no Partner shall have any right to
demand or receive the return of its Capital Contribution from the Partnership.
Section 4.6 Conversion of Junior Shares. If, at any time, any
of the Junior Shares are converted into REIT Shares, in whole or in part, then a
number of Partnership Common Units equal to (i) the number of REIT Shares issued
upon such conversion divided by (ii) the Adjustment Factor then in effect shall
be issued to the General Partner and the Special Limited Partner (and between
the General Partner and the Special Limited Partner in proportion to their
ownership of Partnership Common Units immediately preceding such conversion),
and the Percentage Interests of the General Partner and the Limited Partners
(including the Special Limited Partner) shall be adjusted to reflect such
conversion.
ARTICLE 5
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions.
Subject to the terms of any Partnership Unit Designation, the General Partner
shall cause the Partnership to distribute quarterly all, or such portion as the
General Partner may in its sole and absolute discretion determine, of Available
Cash generated by the Partnership during such quarter to the Holders of
Partnership Common Units in accordance with their respective Partnership Common
Units held on such Partnership Record Date. Except as otherwise provided in the
terms of any Partnership Unit Designation, distributions payable with respect to
any Partnership Units (other than Partnership Units held by the General Partner
or the Special Limited Partner) that were not outstanding during the entire
quarterly period in respect of which any distribution is made shall be prorated
based on the portion of the period that such units were outstanding. The General
Partner in its sole and absolute discretion may distribute to the Unitholders
Available Cash on a more frequent basis and provide for an appropriate record
date. The General Partner shall take such reasonable efforts, as determined by
it in its sole and absolute discretion and consistent with the Previous General
Partner's qualification as a REIT, to cause the Partnership to distribute
sufficient amounts to enable (i) the General Partner and the Special Limited
Partner to transfer funds to the Previous General Partner and (ii) the Previous
General Partner to pay shareholder dividends that will (a) satisfy the
requirements for qualifying as a REIT under the Code and Regulations (the "REIT
Requirements") and (b) avoid any federal income or excise tax liability of the
Previous General Partner.
Section 5.2 Distributions in Kind. No right is given to any
Unitholder to demand and receive property other than cash as provided in this
Agreement. The General Partner may determine, in its sole and absolute
discretion, to make a distribution in kind of Partnership assets to the
Unitholders, and such assets shall be distributed in such a fashion as to ensure
that the fair market value is distributed and allocated in accordance with
Articles 5, 6 and 10 hereof.
Section 5.3 Amounts Withheld. All amounts withheld pursuant
to the Code or any provisions of any state or local tax law and Section 10.4
hereof with respect to any allocation, payment or distribution to any Unitholder
shall be treated as amounts paid or distributed to such Unitholder pursuant to
Section 5.1 hereof for all purposes under this Agreement.
Section 5.4 Distributions Upon Liquidation. Notwithstanding
the other provisions of this Article 5, net proceeds from a Terminating Capital
Transaction, and any other cash received or reductions in reserves made after
commencement of the liquidation of the Partnership, shall be distributed to the
Unitholders in accordance with Section 13.2 hereof.
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Section 5.5 Restricted Distributions. Notwithstanding any
provision to the contrary contained in this Agreement, neither the Partnership
nor the General Partner, on behalf of the Partnership, shall make a distribution
to any Unitholder on account of its Partnership Interest or interest in
Partnership Units if such distribution would violate Section 17-607 of the Act
or other applicable law.
ARTICLE 6
ALLOCATIONS
Section 6.1 Timing and Amount of Allocations of Net Income and
Net Loss. Net Income and Net Loss of the Partnership shall be determined and
allocated with respect to each Fiscal Year of the Partnership as of the end of
each such year. Except as otherwise provided in this Article 6, and subject to
Section 11.6.C hereof, an allocation to a Unitholder of a share of Net Income or
Net Loss shall be treated as an allocation of the same share of each item of
income, gain, loss or deduction that is taken into account in computing Net
Income or Net Loss.
Section 6.2 General Allocations. Subject to the terms of any
Partnership Unit Designation, except as otherwise provided in this Article 6 and
subject to Section 11.6.C hereof, Net Income and Net Loss shall be allocated to
each of the Holders of Partnership Common Units in accordance with their
respective Partnership Common Units at the end of each Fiscal Year.
Section 6.3 Additional Allocation Provisions. Notwithstanding
the foregoing provisions of this Article 6:
A. Intentionally Omitted.
B. Regulatory Allocations.
(i) Minimum Gain Chargeback. Except as otherwise
provided in Regulations Section 1.704-2(f), notwithstanding the
provisions of Section 6.2 hereof, or any other provision of this
Article 6, if there is a net decrease in Partnership Minimum Gain
during any Fiscal Year, each Holder of Partnership Common Units shall
be specially allocated items of Partnership income and gain for such
year (and, if necessary, subsequent years) in an amount equal to such
Holder's share of the net decrease in Partnership Minimum Gain, as
determined under Regulations Section 1.704-2(g). Allocations pursuant
to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Holder pursuant thereto. The
items to be allocated shall be determined in accordance with
Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section
6.3.B(i) is intended to qualify as a "minimum gain chargeback" within
the meaning of Regulations Section 1.704-2(f) and shall be interpreted
consistently therewith.
(ii) Partner Minimum Gain Chargeback. Except as
otherwise provided in Regulations Section 1.704-2(i)(4) or in Section
6.3.B(i) hereof, if there is a net decrease in Partner Minimum Gain
attributable to a Partner Nonrecourse Debt during any Fiscal Year, each
Holder of Partnership Common Units who has a share of the Partner
Minimum Gain attributable to such Partner Nonrecourse Debt, determined
in accordance with Regulations Section 1.704-2(i)(5), shall be
specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such
Holder's share of the net decrease in Partner Minimum
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Gain attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.7042(i)(4). Allocations pursuant
to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each General Partner, Limited
Partner and other Holder pursuant thereto. The items to be so
allocated shall be determined in accordance with Regulations Sections
1.704-2(i)(4) and 1.704-2(j)(2). This Section 6.3.B(ii) is intended to
qualify as a "chargeback of partner nonrecourse debt minimum gain"
within the meaning of Regulations Section 1.704-2(i) and shall be
interpreted consistently therewith.
(iii) Nonrecourse Deductions and Partner Nonrecourse
Deductions. Any Nonrecourse Deductions for any Fiscal Year shall be
specially allocated to the Holders of Partnership Common Units in
accordance with their Partnership Common Units. Any Partner Nonrecourse
Deductions for any Fiscal Year shall be specially allocated to the
Holder(s) who bears the economic risk of loss with respect to the
Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions
are attributable, in accordance with Regulations Section 1.704-2(i).
(iv) Qualified Income Offset. If any Holder of
Partnership Common Units unexpectedly receives an adjustment,
allocation or distribution described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and
gain shall be allocated, in accordance with Regulations Section 1.704-
1(b)(2)(ii)(d), to such Holder in an amount and manner sufficient to
eliminate, to the extent required by such Regulations, the Adjusted
Capital Account Deficit of such Holder as quickly as possible, provided
that an allocation pursuant to this Section 6.3.B(iv) shall be made if
and only to the extent that such Holder would have an Adjusted Capital
Account Deficit after all other allocations provided in this Article 6
have been tentatively made as if this Section 6.3.B(iv) were not in the
Agreement. It is intended that this Section 6.3.B(iv) qualify and be
construed as a "qualified income offset" within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
(v) Gross Income Allocation. In the event that any
Holder of Partnership Common Units has a deficit Capital Account at the
end of any Fiscal Year that is in excess of the sum of (1) the amount
(if any) that such Holder is obligated to restore to the Partnership
upon complete liquidation of such Holder's Partnership Interest
(including, the Holder's interest in outstanding Partnership Preferred
Units and other Partnership Units) and (2) the amount that such Holder
is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each
such Holder shall be specially allocated items of Partnership income
and gain in the amount of such excess to eliminate such deficit as
quickly as possible, provided that an allocation pursuant to this
Section 6.3.B(v) shall be made if and only to the extent that such
Holder would have a deficit Capital Account in excess of such sum after
all other allocations provided in this Article 6 have been tentatively
made as if this Section 6.3.B(v) and Section 6.3.B(iv) hereof were not
in the Agreement.
(vi) Limitation on Allocation of Net Loss. To the
extent that any allocation of Net Loss would cause or increase an
Adjusted Capital Account Deficit as to any Holder of Partnership Common
Units, such allocation of Net Loss shall be reallocated among the other
Holders of Partnership Common Units in accordance with their respective
Partnership Common Units, subject to the limitations of this Section
6.3.B(vi).
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(vii) Section 754 Adjustment. To the extent that an
adjustment to the adjusted tax basis of any Partnership asset pursuant
to Code Section 734(b) or Code Section 743(b) is required, pursuant to
Regulations Section 1.704-1(b)(2) (iv)(m)(2) or Regulations Section
1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining
Capital Accounts as the result of a distribution to a Holder of
Partnership Common Units in complete liquidation of its interest in the
Partnership, the amount of such adjustment to the Capital Accounts
shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis),
and such gain or loss shall be specially allocated to the Holders in
accordance with their Partnership Common Units in the event that
Regulations Section 1.704- 1(b)(2)(iv)(m)(2) applies, or to the Holders
to whom such distribution was made in the event that Regulations
Section 1.704-1(b)(2)(iv)(m)(4) applies.
(viii) Curative Allocations. The allocations set
forth in Sections 6.3.B(i), (ii), (iii), (iv), (v), (vi) and (vii)
hereof (the "Regulatory Allocations") are intended to comply with
certain regulatory requirements, including the requirements of
Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the
provisions of Section 6.1 hereof, the Regulatory Allocations shall be
taken into account in allocating other items of income, gain, loss and
deduction among the Holders of Partnership Common Units so that to the
extent possible without violating the requirements giving rise to the
Regulatory Allocations, the net amount of such allocations of other
items and the Regulatory Allocations to each Holder of a Partnership
Common Unit shall be equal to the net amount that would have been
allocated to each such Holder if the Regulatory Allocations had not
occurred.
C. Special Allocations Upon Liquidation. Notwithstanding any
provision in this Article VI to the contrary, in the event that the Partnership
disposes of all or substantially all of its assets in a transaction that will
lead to a liquidation of the Partnership pursuant to Article XIII hereof, then
any Net Income or Net Loss realized in connection with such transaction and
thereafter (and, if necessary, constituent items of income, gain, loss and
deduction) shall be specially allocated among the Partners as required so as to
cause liquidating distributions pursuant to Section 13.2.A(4) hereof to be made
in the same amounts and proportions as would have resulted had such
distributions instead been made pursuant to Section 5.1 hereof.
D. Allocation of Excess Nonrecourse Liabilities. For purposes
of determining a Holder's proportional share of the "excess nonrecourse
liabilities" of the Partnership within the meaning of Regulations Section
1.752-3(a)(3), each Holder's interest in Partnership profits shall be such
Holder's share of Partnership Common Units.
Section 6.4 Tax Allocations.
A. In General. Except as otherwise provided in this Section
6.4, for income tax purposes under the Code and the Regulations each Partnership
item of income, gain, loss and deduction (collectively, "Tax Items") shall be
allocated among the Holders of Partnership Common Units in the same manner as
its correlative item of "book" income, gain, loss or deduction is allocated
pursuant to Sections 6.2 and 6.3 hereof.
B. Allocations Respecting Section 704(c) Revaluations.
Notwithstanding Section 6.4.A hereof, Tax Items with respect to Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated among the Holders of Partnership Common Units
for income tax purposes pursuant to Regulations promulgated under Code Section
704(c) so as to take into account such variation. The Partnership shall account
for such variation under any
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method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). In the event that the
Gross Asset Value of any partnership asset is adjusted pursuant to subsection
(b) of the definition of "Gross Asset Value" (provided in Article 1 hereof),
subsequent allocations of Tax Items with respect to such asset shall take
account of the variation, if any, between the adjusted basis of such asset and
its Gross Asset Value in the same manner as under Code Section 704(c) and the
applicable Regulations.
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management.
A. Except as otherwise expressly provided in this Agreement,
all management powers over the business and affairs of the Partnership are and
shall be exclusively vested in the General Partner, and no Limited Partner shall
have any right to participate in or exercise control or management power over
the business and affairs of the Partnership. The General Partner may not be
removed by the Partners with or without cause, except with the Consent of the
General Partner. In addition to the powers now or hereafter granted a general
partner of a limited partnership under applicable law or that are granted to the
General Partner under any other provision of this Agreement, the General
Partner, subject to the other provisions hereof including Section 7.3, shall
have full power and authority to do all things deemed necessary or desirable by
it to conduct the business of the Partnership, to exercise all powers set forth
in Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1
hereof, including, without limitation:
(1) the making of any expenditures, the lending or
borrowing of money (including, without limitation, making prepayments
on loans and borrowing money to permit the Partnership to make
distributions to its Partners in such amounts as will permit the
Previous General Partner (so long as the Previous General Partner
qualifies as a REIT) to avoid the payment of any federal income tax
(including, for this purpose, any excise tax pursuant to Code Section
4981) and to make distributions to its shareholders sufficient to
permit the Previous General Partner to maintain REIT status or
otherwise to satisfy the REIT Requirements), the assumption or
guarantee of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of indebtedness (including the
securing of same by deed to secure debt, mortgage, deed of trust or
other lien or encumbrance on the Partnership's assets) and the
incurring of any obligations that it deems necessary for the conduct of
the activities of the Partnership;
(2) the making of tax, regulatory and other filings,
or rendering of periodic or other reports to governmental or other
agencies having jurisdiction over the business or assets of the
Partnership;
(3) the acquisition, sale, transfer, exchange or
other disposition of any assets of the Partnership (including, but not
limited to, the exercise or grant of any conversion, option, privilege
or subscription right or any other right available in connection with
any assets at any time held by the Partnership) or the merger,
consolidation, reorganization or other combination of the Partnership
with or into another entity;
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(4) the mortgage, pledge, encumbrance or
hypothecation of any assets of the Partnership, the use of the assets
of the Partnership (including, without limitation, cash on hand) for
any purpose consistent with the terms of this Agreement and on any
terms that it sees fit, including, without limitation, the financing of
the operations and activities of the General Partner, the Partnership
or any of the Partnership's Subsidiaries, the lending of funds to other
Persons (including, without limitation, the Partnership's Subsidiaries)
and the repayment of obligations of the Partnership, its Subsidiaries
and any other Person in which it has an equity investment, and the
making of capital contributions to and equity investments in the
Partnership's Subsidiaries;
(5) the management, operation, leasing, landscaping,
repair, alteration, demolition, replacement or improvement of any
Property, including, without limitation, any Contributed Property, or
other asset of the Partnership or any Subsidiary;
(6) the negotiation, execution and performance of any
contracts, leases, conveyances or other instruments that the General
Partner considers useful or necessary to the conduct of the
Partnership's operations or the implementation of the General
Partner's powers under this Agreement, including contracting with
contractors, developers, consultants, accountants, legal counsel,
other professional advisors and other agents and the payment of their
expenses and compensation out of the Partner ship's assets;
(7) the distribution of Partnership cash or other
Partnership assets in accordance with this Agreement, the holding,
management, investment and reinvestment of cash and other assets of the
Partnership, and the collection and receipt of revenues, rents and
income of the Partnership;
(8) the selection and dismissal of employees of the
Partnership or the General Partner (including, without limitation,
employees having titles or offices such as "president," "vice
president," "secretary" and "treasurer"), and agents, outside
attorneys, accountants, consultants and contractors of the Partnership
or the General Partner and the determination of their compensation and
other terms of employment or hiring;
(9) the maintenance of such insurance for the benefit
of the Partnership and the Partners as it deems necessary or
appropriate;
(10) the formation of, or acquisition of an interest
in, and the contribution of property to, any further limited or general
partnerships, limited liability companies, joint ventures or other
relationships that it deems desirable (including, without limitation,
the acquisition of interests in, and the contributions of property to,
any Subsidiary and any other Person in which it has an equity
investment from time to time); provided, however, that, as long as the
Previous General Partner has determined to continue to qualify as a
REIT, the General Partner may not engage in any such formation,
acquisition or contribution that would cause the Previous General
Partner to fail to qualify as a REIT or the General Partner to fail to
qualify as a "qualified REIT subsidiary" within the meaning of Code
Section 856(i)(2);
(11) the control of any matters affecting the rights
and obligations of the Partnership, including the settlement,
compromise, submission to arbitration or any other form of dispute
resolution, or abandonment, of any claim, cause of action, liability,
debt or damages, due
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or owing to or from the Partnership, the commencement or defense of
suits, legal proceedings, administrative proceedings, arbitrations or
other forms of dispute resolution, and the representation of the
Partnership in all suits or legal proceedings, administrative
proceedings, arbitrations or other forms of dispute resolution, the
incurring of legal expense, and the indemnification of any Person
against liabilities and contingencies to the extent permitted by law;
(12) the undertaking of any action in connection with
the Partnership's direct or indirect investment in any Subsidiary or
any other Person (including, without limitation, the contribution or
loan of funds by the Partnership to such Persons);
(13) the determination of the fair market value of
any Partnership property distributed in kind using such reasonable
method of valuation as it may adopt; provided that such methods are
otherwise consistent with the requirements of this Agreement;
(14) the enforcement of any rights against any
Partner pursuant to representations, warranties, covenants and
indemnities relating to such Partner's contribution of property or
assets to the Partnership;
(15) the exercise, directly or indirectly, through
any attorney- in-fact acting under a general or limited power of
attorney, of any right, including the right to vote, appurtenant to any
asset or investment held by the Partnership;
(16) the exercise of any of the powers of the General
Partner enumerated in this Agreement on behalf of or in connection with
any Subsidiary of the Partnership or any other Person in which the
Partnership has a direct or indirect interest, or jointly with any such
Subsidiary or other Person;
(17) the exercise of any of the powers of the General
Partner enumerated in this Agreement on behalf of any Person in which
the Partnership does not have an interest, pursuant to contractual or
other arrangements with such Person;
(18) the making, execution and delivery of any and
all deeds, leases, notes, deeds to secure debt, mortgages, deeds of
trust, security agreements, conveyances, contracts, guarantees,
warranties, indemnities, waivers, releases or legal instruments or
agreements in writing necessary or appropriate in the judgment of the
General Partner for the accomplishment of any of the powers of the
General Partner enumerated in this Agreement;
(19) the issuance of additional Partnership Units, as
appropriate and in the General Partner's sole and absolute discretion,
in connection with Capital Contributions by Additional Limited Partners
and additional Capital Contributions by Partners pursuant to Article 4
hereof; and
(20) an election to dissolve the Partnership pursuant
to Section 13.1.C hereof.
B. Each of the Limited Partners agrees that, except as
provided in Section 7.3 hereof, the General Partner is authorized to execute,
deliver and perform the above-mentioned agreements and transactions on behalf of
the Partnership without any further act, approval or vote of the Partners,
notwithstanding any other provision of this Agreement (except as provided in
Section 7.3 hereof), the Act or any applicable law, rule or regulation. The
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execution, delivery or performance by the General Partner or the Partnership of
any agreement authorized or permitted under this Agreement shall not constitute
a breach by the General Partner of any duty that the General Partner may owe the
Partnership or the Limited Partners or any other Persons under this Agreement or
of any duty stated or implied by law or equity.
C. At all times from and after the date hereof, the General
Partner may cause the Partnership to obtain and maintain (i) casualty, liability
and other insurance on the Properties of the Partnership and (ii) liability
insurance for the Indemnitees hereunder.
D. At all times from and after the date hereof, the General
Partner may cause the Partnership to establish and maintain working capital and
other reserves in such amounts as the General Partner, in its sole and absolute
discretion, deems appropriate and reasonable from time to time.
E. In exercising its authority under this Agreement, the
General Partner may, but shall be under no obligation to, take into account the
tax consequences to any Partner (including the General Partner) of any action
taken by it. The General Partner and the Partnership shall not have liability to
a Limited Partner under any circumstances as a result of an income tax liability
incurred by such Limited Partner as a result of an action (or inaction) by the
General Partner pursuant to its authority under this Agreement so long as the
action or inaction is taken in good faith.
Section 7.2 Certificate of Limited Partnership. To the extent
that such action is determined by the General Partner to be reasonable and
necessary or appropriate, the General Partner shall file amendments to and
restatements of the Certificate and do all the things to maintain the
Partnership as a limited partnership (or a partnership in which the limited
partners have limited liability) under the laws of the State of Delaware and
each other state, the District of Columbia or any other jurisdiction, in which
the Partnership may elect to do business or own property. Subject to the terms
of Section 8.5.A(4) hereof, the General Partner shall not be required, before or
after filing, to deliver or mail a copy of the Certificate or any amendment
thereto to any Limited Partner. The General Partner shall use all reasonable
efforts to cause to be filed such other certificates or documents as may be
reasonable and necessary or appropriate for the formation, continuation,
qualification and operation of a limited partnership (or a partnership in which
the limited partners have limited liability to the extent provided by applicable
law) in the State of Delaware and any other state, or the District of Columbia
or other jurisdiction, in which the Partnership may elect to do business or own
property.
Section 7.3 Restrictions on General Partner's Authority.
A. The General Partner may not take any action in
contravention of this Agreement, including, without limitation:
(1) take any action that would make it impossible to
carry on the ordinary business of the Partnership, except as otherwise
provided in this Agreement;
(2) possess Partnership property, or assign any
rights in specific Partnership property, for other than a Partnership
purpose except as otherwise provided in this Agreement;
(3) admit a Person as a Partner, except as otherwise
provided in this Agreement;
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(4) perform any act that would subject a Limited
Partner to liability as a general partner in any jurisdiction or any
other liability except as provided herein or under the Act; or
(5) enter into any contract, mortgage, loan or other
agreement that prohibits or restricts, or has the effect of prohibiting
or restricting, the ability of (a) the General Partner, the Previous
General Partner or the Partnership from satisfying its obligations
under Section 8.6 hereof in full or (b) a Limited Partner from
exercising its rights under Section 8.6 hereof to effect a Redemption
in full, except, in either case, with the written consent of such
Limited Partner affected by the prohibition or restriction.
B. The General Partner shall not, without the prior Consent of
the Limited Partners, undertake, on behalf of the Partnership, any of the
following actions or enter into any transaction that would have the effect of
such transactions:
(1) except as provided in Section 7.3.C hereof,
amend, modify or terminate this Agreement other than to reflect the
admission, substitution, termination or withdrawal of Partners pursuant
to Article 11 or Article 12 hereof;
(2) make a general assignment for the benefit of
creditors or appoint or acquiesce in the appointment of a custodian,
receiver or trustee for all or any part of the assets of the
Partnership;
(3) institute any proceeding for bankruptcy on behalf
of the Partnership; or
(4) subject to the rights of Transfer provided in
Sections 11.1.C and 11.2 hereof, approve or acquiesce to the Transfer
of the Partnership Interest of the General Partner, or admit into the
Partnership any additional or successor General Partners.
C. Notwithstanding Section 7.3.B hereof, the General Partner
shall have the power, without the Consent of the Limited Partners, to amend this
Agreement as may be required to facilitate or implement any of the following
purposes:
(1) to add to the obligations of the General Partner
or surrender any right or power granted to the General Partner or any
Affiliate of the General Partner for the benefit of the Limited
Partners;
(2) to reflect the admission, substitution or
withdrawal of Partners or the termination of the Partnership in
accordance with this Agreement, and to amend Exhibits A and C in
connection with such admission, substitution or withdrawal;
(3) to reflect a change that is of an inconsequential
nature and does not adversely affect the Limited Partners in any
material respect, or to cure any ambiguity, correct or supplement any
provision in this Agreement not inconsistent with law or with other
provisions, or make other changes with respect to matters arising under
this Agreement that will not be inconsistent with law or with the
provisions of this Agreement;
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(4) to satisfy any requirements, conditions or
guidelines contained in any order, directive, opinion, ruling or
regulation of a federal or state agency or contained in federal or
state law;
(5) (a) to reflect such changes as are reasonably
necessary (i) for either the General Partner or the Special Limited
Partner, as the case may be, to maintain its status as a "qualified
REIT subsidiary" within the meaning of Code Section 856(i)(2) or (ii)
for the Previous General Partner to maintain its status as a REIT or to
satisfy the REIT Requirement; (b) to reflect the Transfer of all or any
part of a Partnership Interest among the Previous General Partner, the
General Partner, the Special Limited Partner or any other "qualified
REIT subsidiary" (within the meaning of Code Section 856(i)(2)) with
respect to the Previous General Partner;
(6) to modify the manner in which Capital Accounts
are computed (but only to the extent set forth in the definition of
"Capital Account" or contemplated by the Code or the Regulations); and
(7) the issuance of additional Partnership Interests
in accordance with Section 4.2.
The General Partner will provide notice to the Limited Partners when any action
under this Section 7.3.C is taken.
D. Notwithstanding Sections 7.3.B and 7.3.C hereof, this
Agreement shall not be amended, and no action may be taken by the General
Partner, without the Consent of each Partner adversely affected, if such
amendment or action would (i) convert a Limited Partner Interest in the
Partnership into a General Partner Interest (except as a result of the General
Partner acquiring such Partnership Interest), (ii) modify the limited liability
of a Limited Partner, (iii) alter the rights of any Partner to receive the
distributions to which such Partner is entitled, pursuant to Article 5 or
Section 13.2.A(4) hereof, or alter the allocations specified in Article 6 hereof
(except, in any case, as permitted pursuant to Sections 4.2 and 7.3.C hereof),
(iv) alter or modify the Redemption rights, Cash Amount or REIT Shares Amount as
set forth in Sections 8.6 and 11.2 hereof, or amend or modify any related
definitions, or (v) amend this Section 7.3.D; provided, however, that the
Consent of each Partner adversely affected shall not be required for any
amendment or action that affects all Partners holding the same class or series
of Partnership Units on a uniform or pro rata basis. Further, no amendment may
alter the restrictions on the General Partner's authority set forth elsewhere in
this Section 7.3 without the Consent specified therein. Any such amendment or
action consented to by any Partner shall be effective as to that Partner,
notwithstanding the absence of such consent by any other Partner.
Section 7.4 Reimbursement of the General Partner.
A. The General Partner shall not be compensated for its
services as general partner of the Partnership except as provided in elsewhere
in this Agreement (including the provisions of Articles 5 and 6 hereof regarding
distributions, payments and allocations to which it may be entitled in its
capacity as the General Partner).
B. Subject to Sections 7.4.C and 15.11 hereof, the Partnership
shall be liable for, and shall reimburse the General Partner on a monthly basis,
or such other basis as the General Partner may determine in its sole and
absolute discretion, for all sums expended in connection with the Partnership's
business, including, without limitation, (i) expenses relating to the ownership
of interests in and management and operation of, or for the benefit of, the
Partnership, (ii) compensation of officers and employees, including, without
limitation, payments under future
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compensation plans of the General Partner that may provide for stock units, or
other phantom stock, pursuant to which employees of the General Partner will
receive payments based upon dividends on or the value of REIT Shares, (iii)
director fees and expenses and (iv) all costs and expenses of the General
Partner being a public company, including costs of filings with the SEC, reports
and other distributions to its shareholders; provided, however, that the amount
of any reimbursement shall be reduced by any interest earned by the General
Partner with respect to bank accounts or other instruments or accounts held by
it on behalf of the Partnership as permitted pursuant to Section 7.5 hereof.
Such reimbursements shall be in addition to any reimbursement of the General
Partner as a result of indemnification pursuant to Section 7.7 hereof.
C. To the extent practicable, Partnership expenses shall be
billed directly to and paid by the Partnership and, subject to Section 15.11
hereof, reimbursements to the General Partner or any of its Affiliates by the
Partnership pursuant to this Section 7.4 shall be treated as "guaranteed
payments" within the meaning of Code Section 707(c).
Section 7.5 Outside Activities of the Previous General Partner
and the General Partner. Neither the General Partner nor the Previous General
Partner shall directly or indirectly enter into or conduct any business, other
than in connection with (a) the ownership, acquisition and disposition of
Partnership Interests as General Partner, (b) the management of the business of
the Partnership, (c) the operation of the Previous General Partner as a
reporting company with a class (or classes) of securities registered under the
Exchange Act, (d) the Previous General Partner's operations as a REIT, (e) the
offering, sale, syndication, private placement or public offering of stock,
bonds, securities or other interests, (f) financing or refinancing of any type
related to the Partnership or its assets or activities, (g) the General
Partner's qualification as a "qualified REIT subsidiary" (within the meaning of
Code Section 856(i)(2)) and (h) such activities as are incidental thereto.
Nothing contained herein shall be deemed to prohibit the General Partner or the
Previous General Partner from executing guarantees of Partnership debt for which
it would otherwise be liable in its capacity as General Partner. Subject to
Section 7.3.B hereof, the General Partner, the Previous General Partner, the
Special Limited Partner and all "qualified REIT subsidiaries" (within the
meaning of Code Section 856(i)(2)), taken as a group, shall not own any assets
or take title to assets (other than temporarily in connection with an
acquisition prior to contributing such assets to the Partnership) other than
Partnership Interests as the General Partner or Special Limited Partner and
other than such cash and cash equivalents, bank accounts or similar instruments
or accounts as such group deems reasonably necessary, taking into account
Section 7.1.D hereof and the requirements necessary for the Previous General
Partner to qualify as a REIT and for the Previous General Partner, the General
Partner and the Special Limited Partner to carry out their respective
responsibilities contemplated under this Agreement and the Charter.
Notwithstanding the foregoing, if the Previous General Partner or the General
Partner acquires assets in its own name and owns Property other than through the
Partnership, the Partners agree to negotiate in good faith to amend this
Agreement, including, without limitation, the definition of "Adjustment Factor,"
to reflect such activities and the direct ownership of assets by the Previous
General Partner or the General Partner. The General Partner and any Affiliates
of the General Partner may acquire Limited Partner Interests and shall be
entitled to exercise all rights of a Limited Partner relating to such Limited
Partner Interests.
Section 7.6 Contracts with Affiliates.
A. The Partnership may lend or contribute funds or other
assets to its Subsidiaries or other Persons in which it has an equity
investment, and such Persons may borrow funds from the Partnership, on terms and
conditions established in the sole and absolute discretion of the General
Partner. The foregoing authority shall not create any right or benefit in favor
of any Subsidiary or any other Person.
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B. Except as provided in Section 7.5 hereof and subject to
Section 3.1 hereof, the Partnership may transfer assets to joint ventures,
limited liability companies, partnerships, corporations, business trusts or
other business entities in which it is or thereby becomes a participant upon
such terms and subject to such conditions consistent with this Agreement and
applicable law as the General Partner, in its sole and absolute discretion,
believes to be advisable.
C. Except as expressly permitted by this Agreement, neither
the General Partner nor any of its Affiliates shall sell, transfer or convey any
property to the Partnership, directly or indirectly, except pursuant to
transactions that are determined by the General Partner in good faith to be fair
and reasonable.
D. The General Partner, in its sole and absolute discretion
and without the approval of the Limited Partners, may propose and adopt on
behalf of the Partnership employee benefit plans funded by the Partnership for
the benefit of employees of the General Partner, the Partnership, Subsidiaries
of the Partnership or any Affiliate of any of them in respect of services
performed, directly or indirectly, for the benefit of the Partnership or any of
the Partnership's Subsidiaries.
E. The General Partner is expressly authorized to enter into,
in the name and on behalf of the Partnership, a right of first opportunity
arrangement and other conflict avoidance agreements with various Affiliates of
the Partnership and the General Partner, on such terms as the General Partner,
in its sole and absolute discretion, believes are advisable.
Section 7.7 Indemnification.
A. To the fullest extent permitted by applicable law, the
Partnership shall indemnify each Indemnitee from and against any and all losses,
claims, damages, liabilities, joint or several, expenses (including, without
limitation, attorney's fees and other legal fees and expenses), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership ("Actions") as set forth in
this Agreement in which such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise; provided, however, that the Partnership shall
not indemnify an Indemnitee (i) for willful misconduct or a knowing violation of
the law or (ii) for any transaction for which such Indemnitee received an
improper personal benefit in violation or breach of any provision of this
Agreement. Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership (including,
without limitation, any indebtedness which the Partnership or any Subsidiary of
the Partnership has assumed or taken subject to), and the General Partner is
hereby authorized and empowered, on behalf of the Partnership, to enter into one
or more indemnity agreements consistent with the provisions of this Section 7.7
in favor of any Indemnitee having or potentially having liability for any such
indebtedness. It is the intention of this Section 7.7.A that the Partnership
indemnify each Indemnitee to the fullest extent permitted by law. The
termination of any proceeding by judgment, order or settlement does not create a
presumption that the Indemnitee did not meet the requisite standard of conduct
set forth in this Section 7.7.A. The termination of any proceeding by conviction
of an Indemnitee or upon a plea of nolo contendere or its equivalent by an
Indemnitee, or an entry of an order of probation against an Indemnitee prior to
judgment, does not create a presumption that such Indemnitee acted in a manner
contrary to that specified in this Section 7.7.A with respect to the subject
matter of such proceeding. Any indemnification pursuant to this Section 7.7
shall be made only out of the assets of the Partnership, and neither the General
Partner nor any Limited Partner shall have any obligation to contribute to the
capital of the Partnership or otherwise provide funds to enable the Partnership
to fund its obligations under this Section 7.7.
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B. To the fullest extent permitted by law, expenses incurred
by an Indemnitee who is a party to a proceeding or otherwise subject to or the
focus of or is involved in any Action shall be paid or reimbursed by the
Partnership as incurred by the Indemnitee in advance of the final disposition of
the Action upon receipt by the Partnership of (i) a written affirmation by the
Indemnitee of the Indemnitee's good faith belief that the standard of conduct
necessary for indemnification by the Partnership as authorized in this Section
7.7.A has been met, and (ii) a written undertaking by or on behalf of the
Indemnitee to repay the amount if it shall ultimately be determined that the
standard of conduct has not been met.
C. The indemnification provided by this Section 7.7 shall be
in addition to any other rights to which an Indemnitee or any other Person may
be entitled under any agreement, pursuant to any vote of the Partners, as a
matter of law or otherwise, and shall continue as to an Indemnitee who has
ceased to serve in such capacity and shall inure to the benefit of the heirs,
successors, assigns and administrators of the Indemnitee unless otherwise
provided in a written agreement with such Indemnitee or in the writing pursuant
to which such Indemnitee is indemnified.
D. The Partnership may, but shall not be obligated to,
purchase and maintain insurance, on behalf of any of the Indemnitees and such
other Persons as the General Partner shall determine, against any liability that
may be asserted against or expenses that may be incurred by such Person in
connection with the Partnership's activities, regardless of whether the
Partnership would have the power to indemnify such Person against such liability
under the provisions of this Agreement.
E. Any liabilities which an Indemnitee incurs as a result of
acting on behalf of the Partnership or the General Partner (whether as a
fiduciary or otherwise) in connection with the operation, administration or
maintenance of an employee benefit plan or any related trust or funding
mechanism (whether such liabilities are in the form of excise taxes assessed by
the IRS, penalties assessed by the Department of Labor, restitutions to such a
plan or trust or other funding mechanism or to a participant or beneficiary of
such plan, trust or other funding mechanism, or otherwise) shall be treated as
liabilities or judgments or fines under this Section 7.7, unless such
liabilities arise as a result of (i) such Indemnitee's intentional misconduct or
knowing violation of the law, or (ii) any transaction in which such Indemnitee
received a personal benefit in violation or breach of any provision of this
Agreement or applicable law.
F. In no event may an Indemnitee subject any of the Partners
to personal liability by reason of the indemnification provisions set forth in
this Agreement.
G. An Indemnitee shall not be denied indemnification in whole
or in part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
H. The provisions of this Section 7.7 are for the benefit of
the Indemnitees, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
Partnership's liability to any Indemnitee under this Section 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
I. It is the intent of the Partners that any amounts paid by
the Partnership to the General Partner pursuant to this Section 7.7 shall be
treated as "guaranteed payments" within the meaning of Code Section 707(c).
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Section 7.8 Liability of the General Partner.
A. Notwithstanding anything to the contrary set forth in this
Agreement, neither the General Partner nor any of its directors or officers
shall be liable or accountable in damages or otherwise to the Partnership, any
Partners or any Assignees for losses sustained, liabilities incurred or benefits
not derived as a result of errors in judgment or mistakes of fact or law or of
any act or omission if the General Partner or such director or officer acted in
good faith.
B. The Limited Partners expressly acknowledge that the General
Partner is acting for the benefit of the Partnership, the Limited Partners and
the General Partner's shareholders collectively and that the General Partner is
under no obligation to give priority to the separate interests of the Limited
Partners or the General Partner's shareholders (including, without limitation,
the tax consequences to Limited Partners, Assignees or the General Partner's
shareholders) in deciding whether to cause the Partnership to take (or decline
to take) any actions.
C. Subject to its obligations and duties as General Partner
set forth in Section 7.1.A hereof, the General Partner may exercise any of the
powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its employees or agents
(subject to the supervision and control of the General Partner). The General
Partner shall not be responsible for any misconduct or negligence on the part of
any such agent appointed by it in good faith.
D. Any amendment, modification or repeal of this Section 7.8
or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the General Partner's, and its officers' and
directors', liability to the Partnership and the Limited Partners under this
Section 7.8 as in effect immediately prior to such amendment, modification or
repeal with respect to claims arising from or relating to matters occurring, in
whole or in part, prior to such amendment, modification or repeal, regardless of
when such claims may arise or be asserted.
E. Notwithstanding anything herein to the contrary, except for
fraud, willful misconduct or gross negligence, or pursuant to any express
indemnities given to the Partnership by any Partner pursuant to any other
written instrument, no Partner shall have any personal liability whatsoever, to
the Partnership or to the other Partner(s), for the debts or liabilities of the
Partnership or the Partnership's obligations hereunder, and the full recourse of
the other Partner(s) shall be limited to the interest of that Partner in the
Partnership. To the fullest extent permitted by law, no officer, director or
shareholder of the General Partner shall be liable to the Partnership for money
damages except for (i) active and deliberate dishonesty established by a
non-appealable final judgment or (ii) actual receipt of an improper benefit or
profit in money, property or services. Without limitation of the foregoing, and
except for fraud, willful misconduct or gross negligence, or pursuant to any
such express indemnity, no property or assets of any Partner, other than its
interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partner(s) and arising out of, or in connection
with, this Agreement. This Agreement is executed by the officers of the General
Partner solely as officers of the same and not in their own individual
capacities.
F. To the extent that, at law or in equity, the General
Partner has duties (including fiduciary duties) and liabilities relating thereto
to the Partnership or the Limited Partners, the General Partner shall not be
liable to the Partnership or to any other Partner for its good faith reliance on
the provisions of this Agreement. The provisions of this Agreement, to the
extent that they restrict the duties and liabilities of the General Partner
otherwise existing at law or in equity, are agreed by the Partners to replace
such other duties and liabilities of such General Partner.
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Section 7.9 Other Matters Concerning the General Partner.
A. The General Partner may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture or
other paper or document believed by it in good faith to be genuine and to have
been signed or presented by the proper party or parties.
B. The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers, architects,
engineers, environmental consultants and other consultants and advisers selected
by it, and any act taken or omitted to be taken in reliance upon the opinion of
such Persons as to matters that the General Partner reasonably believes to be
within such Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance with such
opinion.
C. The General Partner shall have the right, in respect of any
of its powers or obligations hereunder, to act through any of its duly
authorized officers and a duly appointed attorney or attorneys-in-fact. Each
such attorney shall, to the extent provided by the General Partner in the power
of attorney, have full power and authority to do and perform all and every act
and duty that is permitted or required to be done by the General Partner
hereunder.
D. Notwithstanding any other provision of this Agreement or
the Act, any action of the General Partner on behalf of the Partnership or any
decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect the ability of the Previous
General Partner to continue to qualify as a REIT, (ii) for the Previous General
Partner otherwise to satisfy the REIT Requirements, (iii) to avoid the Previous
General Partner incurring any taxes under Code Section 857 or Code Section 4981
or (iv) for the General Partner or the Special Limited Partner to continue to
qualify as a "qualified REIT subsidiary" (within the meaning of Code Section
856(i)(2)), is expressly authorized under this Agreement and is deemed approved
by all of the Limited Partners.
Section 7.10 Title to Partnership Assets. Title to Partnership
assets, whether real, personal or mixed and whether tangible or intangible,
shall be deemed to be owned by the Partnership as an entity, and no Partner,
individually or collectively with other Partners or Persons, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
the General Partner or one or more nominees, as the General Partner may
determine, including Affiliates of the General Partner. The General Partner
hereby declares and warrants that any Partnership assets for which legal title
is held in the name of the General Partner or any nominee or Affiliate of the
General Partner shall be held by the General Partner for the use and benefit of
the Partnership in accordance with the provisions of this Agreement; provided,
however, that the General Partner shall use its best efforts to cause beneficial
and record title to such assets to be vested in the Partnership as soon as
reasonably practicable. All Partnership assets shall be recorded as the property
of the Partnership in its books and records, irrespective of the name in which
legal title to such Partnership assets is held.
Section 7.11 Reliance by Third Parties. Notwithstanding
anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the General Partner has full power
and authority, without the consent or approval of any other Partner or Person,
to encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
take any and all actions on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if it were the Partnership's sole
party in interest, both legally and beneficially. Each Limited Partner hereby
waives any and all defenses or other remedies that may be available against such
Person to contest, negate or disaffirm any action
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of the General Partner in connection with any such dealing. In no event shall
any Person dealing with the General Partner or its representatives be obligated
to ascertain that the terms of this Agreement have been complied with or to
inquire into the necessity or expediency of any act or action of the General
Partner or its representatives. Each and every certificate, document or other
instrument executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (i) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (iii) such certificate, document or instrument was
duly executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability. The Limited Partners
shall have no liability under this Agreement except as expressly provided in
this Agreement (including, without limitation, Section 10.4 hereof) or under the
Act.
Section 8.2 Management of Business. No Limited Partner or
Assignee (other than the General Partner, any of its Affiliates or any officer,
director, member, employee, partner, agent or trustee of the General Partner,
the Partnership or any of their Affiliates, in their capacity as such) shall
take part in the operations, management or control (within the meaning of the
Act) of the Partnership's business, transact any business in the Partnership's
name or have the power to sign documents for or otherwise bind the Partnership.
The transaction of any such business by the General Partner, any of its
Affiliates or any officer, director, member, employee, partner, agent,
representative, or trustee of the General Partner, the Partnership or any of
their Affiliates, in their capacity as such, shall not affect, impair or
eliminate the limitations on the liability of the Limited Partners or Assignees
under this Agreement.
Section 8.3 Outside Activities of Limited Partners. Subject to
any agreements entered into pursuant to Section 7.6.D hereof and any other
agreements entered into by a Limited Partner or its Affiliates with the General
Partner, the Partnership or a Subsidiary (including, without limitation, any
employment agreement), any Limited Partner and any Assignee, officer, director,
employee, agent, trustee, Affiliate or shareholder of any Limited Partner shall
be entitled to and may have business interests and engage in business activities
in addition to those relating to the Partnership, including business interests
and activities that are in direct or indirect competition with the Partnership
or that are enhanced by the activities of the Partnership. Neither the
Partnership nor any Partners shall have any rights by virtue of this Agreement
in any business ventures of any Limited Partner or Assignee. Subject to such
agreements, none of the Limited Partners nor any other Person shall have any
rights by virtue of this Agreement or the partnership relationship established
hereby in any business ventures of any other Person (other than the General
Partner, to the extent expressly provided herein), and such Person shall have no
obligation pursuant to this Agreement, subject to Section 7.6.D hereof and any
other agreements entered into by a Limited Partner or its Affiliates with the
General Partner, the Partnership or a Subsidiary, to offer any interest in any
such business ventures to the Partnership, any Limited Partner or any such other
Person, even if such opportunity is of a character that, if presented to the
Partnership, any Limited Partner or such other Person, could be taken by such
Person.
Section 8.4 Return of Capital. Except pursuant to the rights
of Redemption set forth in Section 8.6 hereof, no Limited Partner shall be
entitled to the withdrawal or return of its Capital Contribution, except to the
extent
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of distributions made pursuant to this Agreement or upon termination of the
Partnership as provided herein. Except to the extent provided in Article 6
hereof or otherwise expressly provided in this Agreement, no Limited Partner or
Assignee shall have priority over any other Limited Partner or Assignee either
as to the return of Capital Contributions or as to profits, losses or
distributions.
Section 8.5 Rights of Limited Partners Relating to the
Partnership.
A. In addition to other rights provided by this Agreement or
by the Act, and except as limited by Section 8.5.C hereof, each Limited Partner
shall have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon written demand with a
statement of the purpose of such demand and at such Limited Partner's own
expense:
(1) to obtain a copy of (i) the most recent annual
and quarterly reports filed with the SEC by the Previous General
Partner or the General Partner pursuant to the Exchange Act and (ii)
each report or other written communication sent to the shareholders of
the Previous General Partner;
(2) to obtain a copy of the Partnership's federal,
state and local income tax returns for each Fiscal Year;
(3) to obtain a current list of the name and last
known business, residence or mailing address of each Partner;
(4) to obtain a copy of this Agreement and the
Certificate and all amendments thereto, together with executed copies
of all powers of attorney pursuant to which this Agreement, the
Certificate and all amendments thereto have been executed; and
(5) to obtain true and full information regarding the
amount of cash and a description and statement of any other property or
services contributed by each Partner and that each Partner has agreed
to contribute in the future, and the date on which each became a
Partner.
B. The Partnership shall notify any Limited Partner that is a
Qualifying Party, on request, of the then current Adjustment Factor or any
change made to the Adjustment Factor.
C. Notwithstanding any other provision of this Section 8.5,
the General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner determines in its sole and absolute
discretion to be reasonable, any information that (i) the General Partner
believes to be in the nature of trade secrets or other information the
disclosure of which the General Partner in good faith believes is not in the
best interests of the Partnership or the General Partner or (ii) the Partnership
or the General Partner is required by law or by agreements with unaffiliated
third parties to keep confidential.
Section 8.6 Redemption Rights of Qualifying Parties.
A. After the first Twelve-Month Period, a Qualifying Party,
but no other Limited Partner or Assignee, shall have the right (subject to the
terms and conditions set forth herein) to require the Partnership to redeem all
or a portion of the Redeemable Units held by such Tendering Party (such
Redeemable Units being hereafter "Tendered Units") in exchange (a "Redemption")
for REIT shares issuable on, or the Cash Amount payable on, the Specified
Redemption Date, as determined by the Partnership in its sole discretion. Any
Redemption shall be exercised
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pursuant to a Notice of Redemption delivered to the General Partner by the
Qualifying Party when exercising the Redemption right (the "Tendering Party"). A
Tendering Party shall have no right to receive distributions with respect to any
Tendered Units (other than the Cash Amount) paid after delivery of the Notice of
Redemption, whether or not the Partnership Record Date for such distribution
precedes or coincides with such delivery of the Notice of Redemption. If the
Partnership elects to redeem Tendered Units for cash, the Cash Amount shall be
delivered as a certified check payable to the Tendering Party or, in the General
Partner's sole and absolute discretion, in immediately available funds.
B. If the Partnership elects to redeem Tendered Units for REIT
Shares rather than cash, then the Partnership shall direct the Previous General
Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to
the terms set forth in this Section 8.6.B, in which case, (i) the Previous
General Partner, acting as a 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 Previous General Partner in exchange for REIT shares. The percentage of
the Tendered Units tendered for Redemption by the Tendering Party for which the
Partnership elects to cause the Previous General Partner to issue REIT Shares
(rather than cash) is referred to as the "Applicable Percentage." In making such
election to cause the Previous General Partner to acquire Tendered Units, the
Partnership shall act in a fair, equitable and reasonable manner that neither
prefers one group or class of Qualifying Parties over another nor discriminates
against a group or class of Qualifying Parties. If the Partnership elects to
redeem any number of Tendered Units for REIT Shares, rather than cash, on the
Specified Redemption Date, the Tendering Party shall sell such number of the
Tendered Units to the Previous General Partner in exchange for a number of REIT
Shares equal to the product of the REIT Shares Amount and the Applicable
Percentage. The Tendering Party shall submit (i) such information, certification
or affidavit as the Previous General Partner may reasonably require in
connection with the application of the Ownership Limit and other restrictions
and limitations of the Charter to any such acquisition and (ii) such written
representations, investment letters, legal opinions or other instruments
necessary, in the Previous General Partner's view, to effect compliance with the
Securities Act. The product of the Applicable Percentage and the REIT Shares
Amount, if applicable, shall be delivered by the Previous General Partner as
duly authorized, validly issued, fully paid and accessible REIT Shares and, if
applicable, Rights, free of any pledge, lien, encumbrance or restriction, other
than the Ownership Limit and other restrictions provided in the Charter, the
Bylaws of the Previous General Partner, the Securities Act and relevant state
securities or "blue sky" laws. Neither any Tendering Party whose Tendered Units
are acquired by the Previous General Partner pursuant to this Section 8.6.B, any
Partner, any Assignee nor any other interested Person shall have any right to
require or cause the Previous General Partner or the General Partner to
register, qualify or list any REIT Shares owned or held by such Person, whether
or not such REIT Shares are issued pursuant to this Section 8.6.B, with the SEC,
with any state securities commissioner, department or agency, under the
Securities Act or the Exchange Act or with any stock exchange; provided,
however, that this limitation shall not be in derogation of any registration or
similar rights granted pursuant to any other written agreement between the
Previous General Partner and any such Person. Notwithstanding any delay in such
delivery, the Tendering Party shall be deemed the owner of such REIT Shares and
Rights for all purposes, including, without limitation, rights to vote or
consent, receive dividends, and exercise rights, as of the Specified Redemption
Date. REIT Shares issued upon an acquisition of the Tendered Units by the
Previous General Partner pursuant to this Section 8.6.B may contain such legends
regarding restrictions under the Securities Act and applicable state securities
laws as the Previous General Partner in good faith determines to be necessary or
advisable in order to ensure compliance with such laws.
C. Notwithstanding the provisions of Section 8.6.A and 8.6.B
hereof, the Tendering Parties (i) where the Redemption would consist of less
than all the Partnership Common Units held by Partners other than the General
Partner and the Special Limited Partner, shall not be entitled to elect or
effect a Redemption to the extent that the aggregate Percentage Interests of the
Limited Partners (other than the Special Limited Partner) would be reduced, as a
result of the Redemption, to less than one percent (1%) and (ii) shall have no
rights under this Agreement that
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would otherwise be prohibited under the Charter. To the extent that any
attempted Redemption would be in violation of this Section 8.6.C, it shall be
null and void ab initio, and the Tendering Party shall not acquire any rights or
economic interests in REIT Shares otherwise issuable by the Previous General
Partner under Section 8.6.B hereof.
D. In the event that the Partnership declines to cause the
Previous General Partner to acquire all of the Tendered Units from the Tendering
Party in exchange for REIT Shares pursuant to Section 8.6.B hereof following
receipt of a Notice of Redemption (a "Declination"):
(1) The Previous General Partner or the General
Partner shall give notice of such Declination to the Tendering
Party on or before the close of business on the Cut-Off Date.
(2) The Partnership may elect to raise funds for the
payment of the Cash Amount either (a) by requiring that the
General Partner contribute such funds from the proceeds of a
registered public offering (a "Public Offering Funding") by
the Previous General Partner of a number of REIT Shares
("Registrable Shares") equal to the REIT Shares Amount with
respect to the Tendered Units or (b) from any other sources
(including, but not limited to, the sale of any Property and
the incurrence of additional Debt) available to the
Partnership.
(3) Promptly upon the General Partner's receipt of
the Notice of Redemption and the Previous General Partner or
the General Partner giving notice of the Partnership's
Declination, the General Partner shall give notice (a "Single
Funding Notice") to all Qualifying Parties then holding a
Partnership Interest (or an interest therein) and having
Redemption rights pursuant to this Section 8.6 and require
that all such Qualifying Parties elect whether or not to
effect a Redemption of their Partnership Common Units to be
funded through such Public Offering Funding. In the event that
any such Qualifying Party elects to effect such a Redemption,
it shall give notice thereof and of the number of Partnership
Common Units to be made subject thereon in writing to the
General Partner within ten (10) Business Days after receipt of
the Single Funding Notice, and such Qualifying Party shall be
treated as a Tendering Party for all purposes of this Section
8.6. In the event that a Qualifying Party does not so elect,
it shall be deemed to have waived its right to effect a
Redemption for the current Twelve-Month Period; provided,
however, that the Previous General Partner shall not be
required to acquire Partnership Common Units pursuant to this
Section 8.6.D more than twice within a Twelve-Month Period.
Any proceeds from a Public Offering Funding that are in excess of the Cash
Amount shall be for the sole benefit of the Previous General Partner and/or the
General Partner. The General Partner and/or the Special Limited Partner shall
make a Capital Contribution of such amounts to the Partnership for an additional
General Partner Interest and/or Limited Partner Interest. Any such contribution
shall entitle the General Partner and the Special Limited Partner, as the case
may be, to an equitable Percentage Interest adjustment.
E. Notwithstanding the provisions of Section 8.6.B hereof, the
Previous General Partner shall not, under any circumstances, elect to acquire
Tendered Units in exchange for the REIT Shares Amount if such exchange would be
prohibited under the Charter.
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F. Notwithstanding anything herein to the contrary (but
subject to Section 8.6.C hereof), with respect to any Redemption pursuant to
this Section 8.6:
(1) All Partnership Common Units acquired by the
Previous General Partner pursuant to Section 8.6.B hereof
shall be contributed by the Previous General Partner to either
or both of the General Partner and the Special Limited Partner
in such proportions as the Previous General Partner, the
General Partner and the Special Limited Partner shall
determine. Any Partnership Common Units so contributed to the
General Partner shall automatically, and without further
action required, be converted into and deemed to be a General
Partner Interest comprised of the same number of Partnership
Common Units. Any Partnership Common Units so contributed to
the Special Limited Partner shall remain outstanding.
(2) Subject to the Ownership Limit, no Tendering
Party may effect a Redemption for less than five hundred (500)
Redeemable Units or, if such Tendering Party holds (as a
Limited Partner or, economically, as an Assignee) less than
five hundred (500) Redeemable Units, all of the Redeem able
Units held by such Tendering Party.
(3) Each Tendering Party (a) may effect a Redemption
only once in each fiscal quarter of a Twelve-Month Period and
(b) may not effect a Redemption during the period after the
Partnership Record Date with respect to a distribution and
before the record date established by the Previous General
Partner for a distribution to its shareholders of some or all
of its portion of such Partnership distribution.
(4) Notwithstanding anything herein to the contrary,
with respect to any Redemption or acquisition of Tendered
Units by the Previous General Partner pursuant to Section
8.6.B hereof, in the event that the Previous General Partner
or the General Partner gives notice to all Limited Partners
(but excluding any Assignees) then owning Partnership
Interests (a "Primary Offering Notice") that the Previous
General Partner desires to effect a primary offering of its
equity securities then, unless the Previous General Partner
and the General Partner otherwise consent, commencement of the
actions denoted in Section 8.6.E hereof as to a Public
Offering Funding with respect to any Notice of Redemption
thereafter received, whether or not the Tendering Party is a
Limited Partner, may be delayed until the earlier of (a) the
completion of the primary offering or (b) ninety (90) days
following the giving of the Primary Offering Notice.
(5) Without the Consent of the Previous General
Partner, no Tendering Party may effect a Redemption within
ninety (90) days following the closing of any prior Public
Offering Funding.
(6) The consummation of such Redemption shall be
subject to the expiration or termination of the applicable
waiting period, if any, under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended.
(7) The Tendering Party shall continue to own
(subject, in the case of an Assignee, to the provision of
Section 11.5 hereof) all Redeemable Units subject to any
Redemption, and be treated as a Limited Partner or an
Assignee, as applicable, with respect
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to such Redeemable Units for all purposes of this Agreement,
until such Redeemable Units are either paid for by the
Partnership pursuant to Section 8.6.A hereof or transferred
to the Previous General Partner (or directly to the General
Partner or Special Limited Partner) and paid for, by the
issuance of the REIT Shares, pursuant to Section 8.6.B
hereof on the Specified Redemption Date. Until a Specified
Redemption Date and an acquisition of the Tendered Units by
the Previous General Partner pursuant to Section 8.6.B
hereof, the Tendering Party shall have no rights as a
shareholder of the Previous General Partner with respect to
the REIT Shares issuable in connection with such
acquisition.
For purposes of determining compliance with the restrictions set forth in this
Section 8.6.F, all Partnership Common Units beneficially owned by a Related
Party of a Tendering Party shall be considered to be owned or held by such
Tendering Party.
G. In connection with an exercise of Redemption rights
pursuant to this Section 8.6, the Tendering Party shall submit the following to
the General Partner, 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 Ownership 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; and
(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 affidavit required
by Section 8.6.G(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 Ownership Limit.
Section 8.7 Partnership Right to Call Limited Partner
Interests. Notwithstanding any other provision of this Agreement, on and after
the date on which the aggregate Percentage Interests of the Limited Partners
(other than the Special Limited Partner) are less than one percent (1%), the
Partnership shall have the right, but not the obligation, from time to time and
at any time to redeem any and all outstanding Limited Partner Interests (other
than the Special Limited Partner's Limited Partner Interest) by treating any
Limited Partner as a Tendering Party who has delivered a Notice of Redemption
pursuant to Section 8.6 hereof for the amount of Partnership Common Units to be
specified by the General Partner, in its sole and absolute discretion, by notice
to such Limited Partner that the Partnership has elected to exercise its rights
under this Section 8.7. Such notice given by the General Partner to a Limited
Partner pursuant to this Section 8.7 shall be treated as if it were a Notice of
Redemption delivered to the General Partner by such Limited Partner. For
purposes of this Section 8.7, (a) any Limited Partner (whether or not otherwise
a Qualifying Party) may, in the General Partner's sole and absolute discretion,
be treated as a Qualifying Party that is a Tendering Party and (b) the
provisions of Sections 8.6.C(1), 8.6.F(2), 8.6.F(3) and 8.6.F(5) hereof shall
not apply, but the remainder of Section 8.6 hereof shall apply, mutatis
mutandis.
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ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting.
A. The General Partner shall keep or cause to be kept at the
principal office of the Partnership those records and documents required to be
maintained by the Act and other books and records deemed by the General Partner
to be appropriate with respect to the Partnership's business, including, without
limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents required to be provided pursuant
to Section 8.5.A or Section 9.3 hereof. Any records maintained by or on behalf
of the Partnership in the regular course of its business may be kept on, or be
in the form for, punch cards, magnetic tape, photographs, micrographics or any
other information storage device, provided that the records so maintained are
convertible into clearly legible written form within a reasonable period of
time.
B. The books of the Partnership shall be maintained, for
financial and tax reporting purposes, on an accrual basis in accordance with
generally accepted accounting principles, or on such other basis as the General
Partner determines to be necessary or appropriate. To the extent permitted by
sound accounting practices and principles, the Partnership, the General Partner
and the Previous General Partner may operate with integrated or consolidated
accounting records, operations and principles.
Section 9.2 Fiscal Year. The Fiscal Year of the Partnership
shall be the calendar year.
Section 9.3 Reports.
A. As soon as practicable, but in no event later than one
hundred five (105) days after the close of each Fiscal Year, the General Partner
shall cause to be mailed to each Limited Partner, of record as of the close of
the Fiscal Year, an annual report containing financial statements of the
Partnership, or of the Previous General Partner if such statements are prepared
solely on a consolidated basis with the Previous General Partner, for such
Fiscal Year, presented in accordance with generally accepted accounting
principles, such statements to be audited by a nationally recognized firm of
independent public accountants selected by the General Partner.
B. As soon as practicable, but in no event later than one
hundred five (105) days after the close of each calendar quarter (except the
last calendar quarter of each year), the General Partner shall cause to be
mailed to each Limited Partner, of record as of the last day of the calendar
quarter, a report containing unaudited financial statements of the Partnership,
or of the Previous General Partner if such statements are prepared solely on a
consolidated basis with the Previous General Partner, and such other information
as may be required by applicable law or regulation or as the General Partner
determines to be appropriate. At the request of any Limited Partner, the General
Partner shall provide access to the books, records and workpapers upon which the
reports required by this Section 9.3 are based, to the extent required by the
Act.
ARTICLE 10
TAX MATTERS
Section 10.1 Preparation of Tax Returns. The General Partner
shall arrange for the preparation and timely filing of all returns with respect
to Partnership income, gains, deductions, losses and other items required of
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the Partnership for federal and state income tax purposes and shall use all
reasonable effort to furnish, within ninety (90) days of the close of each
taxable year, the tax information reasonably required by Limited Partners for
federal and state income tax reporting purposes. The Limited Partners shall
promptly provide the General Partner with such information relating to the
Contributed Properties, including tax basis and other relevant information, as
may be reasonably requested by the General Partner from time to time.
Section 10.2 Tax Elections. Except as otherwise provided
herein, the General Partner shall, in its sole and absolute discretion,
determine whether to make any available election pursuant to the Code,
including, but not limited to, the election under Code Section 754 and the
election to use the "recurring item" method of accounting provided under Code
Section 461(h) with respect to property taxes imposed on the Partnership's
Properties; provided, however, that, if the "recurring item" method of
accounting is elected with respect to such property taxes, the Partnership shall
pay the applicable property taxes prior to the date provided in Code Section
461(h) for purposes of determining economic performance. The General Partner
shall have the right to seek to revoke any such election (including, without
limitation, any election under Code Sections 461(h) and 754) upon the General
Partner's determination in its sole and absolute discretion that such revocation
is in the best interests of the Partners.
Section 10.3 Tax Matters Partner.
A. The General Partner shall be the "tax matters partner" of
the Partnership for federal income tax purposes. The tax matters partner shall
receive no compensation for its services. All third-party costs and expenses
incurred by the tax matters partner in performing its duties as such (including
legal and accounting fees and expenses) shall be borne by the Partnership in
addition to any reimbursement pursuant to Section 7.4 hereof. Nothing herein
shall be construed to restrict the Partnership from engaging an accounting firm
to assist the tax matters partner in discharging its duties hereunder, so long
as the compensation paid by the Partnership for such services is reasonable. At
the request of any Limited Partner, the General Partner agrees to consult with
such Limited Partner with respect to the preparation and filing of any returns
and with respect to any subsequent audit or litigation relating to such returns;
provided, however, that the filing of such returns shall be in the sole and
absolute discretion of the General Partner.
B. The tax matters partner is authorized, but not required:
(1) to enter into any settlement with the IRS with
respect to any administrative or judicial proceedings for the
adjustment of Partnership items required to be taken into account by a
Partner for income tax purposes (such administrative proceedings being
referred to as a "tax audit" and such judicial proceedings being
referred to as "judicial review"), and in the settlement agreement the
tax matters partner may expressly state that such agreement shall bind
all Partners, except that such settlement agreement shall not bind any
Partner (i) who (within the time prescribed pursuant to the Code and
Regulations) files a statement with the IRS providing that the tax
matters partner shall not have the authority to enter into a
settlement agreement on behalf of such Partner or (ii) who is a
"notice partner" (as defined in Code Section 6231) or a member of a
"notice group" (as defined in Code Section 6223(b)(2));
(2) in the event that a notice of a final
administrative adjustment at the Partnership level of any item required
to be taken into account by a Partner for tax purposes (a "final
adjustment") is mailed to the tax matters partner, to seek judicial
review of such final adjustment, including the filing of a petition for
readjustment with the United States Tax Court or the United States
Claims Court, or the filing of a complaint for refund with the District
Court of the United States for the district in which the Partnership's
principal place of business is located;
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(3) to intervene in any action brought by any other
Partner for judicial review of a final adjustment;
(4) to file a request for an administrative
adjustment with the IRS at any time and, if any part of such request is
not allowed by the IRS, to file an appropriate pleading (petition or
complaint) for judicial review with respect to such request;
(5) to enter into an agreement with the IRS to extend
the period for assessing any tax that is attributable to any item
required to be taken into account by a Partner for tax purposes, or an
item affected by such item; and
(6) to take any other action on behalf of the
Partners in connection with any tax audit or judicial review proceeding
to the extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the tax matters
partner in connection with any such proceeding, except to the extent required by
law, is a matter in the sole and absolute discretion of the tax matters partner
and the provisions relating to indemnification of the General Partner set forth
in Section 7.7 hereof shall be fully applicable to the tax matters partner in
its capacity as such.
Section 10.4 Withholding. Each Limited Partner hereby
authorizes the Partnership to withhold from or pay on behalf of or with respect
to such Limited Partner any amount of federal, state, local or foreign taxes
that the General Partner determines that the Partnership is required to withhold
or pay with respect to any amount distributable or allocable to such Limited
Partner pursuant to this Agreement, including, without limitation, any taxes
required to be withheld or paid by the Partnership pursuant to Code Section
1441, Code Section 1442, Code Section 1445 or Code Section 1446. Any amount paid
on behalf of or with respect to a Limited Partner shall constitute a loan by the
Partnership to such Limited Partner, which loan shall be repaid by such Limited
Partner within fifteen (15) days after notice from the General Partner that such
payment must be made unless (i) the Partnership withholds such payment from a
distribution that would otherwise be made to the Limited Partner or (ii) the
General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the Available Funds of the Partnership that
would, but for such payment, be distributed to the Limited Partner. Each Limited
Partner hereby unconditionally and irrevocably grants to the Partnership a
security interest in such Limited Partner's Partnership Interest to secure such
Limited Partner's obligation to pay to the Partnership any amounts required to
be paid pursuant to this Section 10.4. In the event that a Limited Partner fails
to pay any amounts owed to the Partnership pursuant to this Section 10.4 when
due, the General Partner may, in its sole and absolute discretion, elect to make
the payment to the Partnership on behalf of such defaulting Limited Partner, and
in such event shall be deemed to have loaned such amount to such defaulting
Limited Partner and shall succeed to all rights and remedies of the Partnership
as against such defaulting Limited Partner (including, without limitation, the
right to receive distributions). Any amounts payable by a Limited Partner
hereunder shall bear interest at the base rate on corporate loans at large
United States money center commercial banks, as published from time to time in
the Wall Street Journal, plus four (4) percentage points (but not higher than
the maximum lawful rate) from the date such amount is due (i.e., fifteen (15)
days after demand) until such amount is paid in full. Each Limited Partner shall
take such actions as the Partnership or the General Partner shall request in
order to perfect or enforce the security interest created hereunder.
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ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer.
A. No part of the interest of a Partner shall be subject to
the claims of any creditor, to any spouse for alimony or support, or to legal
process, and may not be voluntarily or involuntarily alienated or encumbered
except as may be specifically provided for in this Agreement.
B. No Partnership Interest shall be Transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article 11. Any Transfer or purported Transfer of a Partnership Interest not
made in accordance with this Article 11 shall be null and void ab initio.
C. Notwithstanding the other provisions of this Article 11
(other than Section 11.6.D hereof), the Partnership Interests of the General
Partner and the Special Limited Partner may be Transferred, in whole or in part,
at any time or from time to time, to or among the Previous General Partner, the
General Partner, the Special Limited Partner, and any other Person that is, at
the time of such Transfer, a "qualified REIT subsidiary" (within the meaning of
Code Section 856(i)(2)) with respect to the Previous General Partner. Any
transferee of the entire General Partner Interest pursuant to this Section
11.1.C shall automatically become, without further action or Consent of any
Limited Partners, the sole general partner of the Partnership, subject to all
the rights, privileges, duties and obligations under this Agreement and the Act
relating to a general partner. Any transferee of a Limited Partner Interest
pursuant to this Section 11.1.C shall automatically become, without further
action or Consent of any Limited Partners, a Substituted Limited Partner. Upon
any Transfer permitted by this Section 11.1.C, the transferor Partner shall be
relieved of all its obligations under this Agreement. The provisions of Section
11.2.B (other than the last sentence thereof), 11.3, 11.4.A and 11.5 hereof
shall not apply to any Transfer permitted by this Section 11.1.C.
Section 11.2 Transfer of General Partner's Partnership
Interest.
A. The General Partner may not Transfer any of its General
Partner Interest or withdraw from the Partnership except as provided in Sections
11.2.B and 11.2.C hereof.
B. The General Partner shall not withdraw from the Partnership
and shall not Transfer all or any portion of its interest in the Partnership
(whether by sale, disposition, statutory merger or consolidation, liquidation or
otherwise) without the Consent of the Limited Partners, which Consent may be
given or withheld in the sole and absolute discretion of the Limited Partners.
Upon any Transfer of such a Partnership Interest pursuant to the Consent of the
Limited Partners and otherwise in accordance with the provisions of this Section
11.2.B, the transferee shall become a successor General Partner for all purposes
herein, and shall be vested with the powers and rights of the transferor General
Partner, and shall be liable for all obligations and responsible for all duties
of the General Partner, once such transferee has executed such instruments as
may be necessary to effectuate such admission and to confirm the agreement of
such transferee to be bound by all the terms and provisions of this Agreement
with respect to the Partnership Interest so acquired. It is a condition to any
Transfer otherwise permitted hereunder that the transferee assumes, by operation
of law or express agreement, all of the obligations of the transferor General
Partner under this Agreement with respect to such Transferred Partnership
Interest, and such Transfer shall relieve the transferor General Partner of its
obligations under this Agreement without the Consent of the Limited Partners. In
the event that the General Partner withdraws from the Partnership, in violation
of this Agreement or otherwise, or otherwise dissolves or terminates, or upon
the bankruptcy of the General Partner, a Majority in Interest of the Limited
Partners may elect to continue the Partnership business by selecting a successor
General Partner in accordance with the Act.
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C. The General Partner may merge with another entity if
immediately after such merger substantially all of the assets of the surviving
entity, other than the General Partner Interest held by the General Partner, are
contributed to the Partnership as a Capital Contribution in exchange for
Partnership Units.
Section 11.3 Limited Partners' Rights to Transfer.
A. General. Prior to the end of the first Twelve-Month Period,
no Limited Partner shall Transfer all or any portion of its Partnership Interest
to any transferee without the Consent of the General Partner, which Consent may
be withheld in its sole and absolute discretion; provided, however, that any
Limited Partner may, at any time, without the consent of the General Partner,
(i) Transfer all or part of its Partnership Interest to any Designated Party,
any Family Member, any Controlled Entity or any Affiliate, provided that the
transferee is, in any such case, a Qualified Transferee, or (ii) pledge (a
"Pledge") all or any portion of its Partnership Interest to a lending
institution, that is not an Affiliate of such Limited Partner, as collateral or
security for a bona fide loan or other extension of credit, and Transfer such
pledged Partnership Interest to such lending institution in connection with the
exercise of remedies under such loan or extension or credit (any Transfer or
Pledge permitted by this proviso is hereinafter referred to as a "Permitted
Transfer"). After such first Twelve-Month Period, each Limited Partner, and each
transferee of Partnership Units or Assignee pursuant to a Permitted Transfer,
shall have the right to Transfer all or any portion of its Partnership Interest
to any Person, subject to the provisions of Section 11.6 hereof and to
satisfaction of each of the following conditions:
(1) General Partner Right of First Refusal. The
transferring Partner shall give written notice of the proposed Transfer
to the General Partner, which notice shall state (i) the identity of
the proposed transferee and (ii) the amount and type of consideration
proposed to be received for the Transferred Partnership Units. The
General Partner shall have ten (10) Business Days upon which to give
the Transferring Partner notice of its election to acquire the
Partnership Units on the proposed terms. If it so elects, it shall
purchase the Partnership Units on such terms within ten (10) Business
Days after giving notice of such election; provided, however, that in
the event that the proposed terms involve a purchase for cash, the
General Partner may at its election deliver in lieu of all or any
portion of such cash a note payable to the Transferring Partner at a
date as soon as reasonably practicable, but in no event later than one
hundred eighty (180) days after such purchase, and bearing interest at
an annual rate equal to the total dividends declared with respect to
one (1) REIT Share for the four (4) preceding fiscal quarters of the
General Partner, divided by the Value as of the closing of such
purchase; provided, further, that such closing may be deferred to the
extent necessary to effect compliance with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, if applicable, and any other
applicable requirements of law. If it does not so elect, the
Transferring Partner may Transfer such Partnership Units to a third
party, on terms no more favorable to the transferee than the proposed
terms, subject to the other conditions of this Section 11.3.
(2) Qualified Transferee. Any Transfer of a
Partnership Interest shall be made only to a single Qualified
Transferee; provided, however, that, for such purposes, all Qualified
Transferees that are Affiliates, or that comprise investment accounts
or funds managed by a single Qualified Transferee and its Affiliates,
shall be considered together to be a single Qualified Transferee;
provided, further, that each Transfer meeting the minimum Transfer
restriction of Section 11.3.A(3) hereof may be to a separate Qualified
Transferee.
(3) Minimum Transfer Restriction. Any Transferring
Partner must Transfer not less than the lesser of (i) the greater of
five hundred (500) Partnership Units or one-third (1/3) of the number
of Partnership Units owned by such Partner as of the Effective Date or
(ii) all of the remaining Partnership Units
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owned by such Transferring Partner; provided, however, that, for
purposes of determining compliance with the foregoing restriction, all
Partnership Units owned by Affiliates of a Limited Partner shall be
considered to be owned by such Limited Partner.
(4) Transferee Agreement to Effect a Redemption. Any
proposed transferee shall deliver to the General Partner a written
agreement reasonably satisfactory to the General Partner to the effect
that the transferee will, within six (6) months after consummation of a
Partnership Common Units Transfer, tender its Partnership Common Units
for Redemption in accordance with the terms of the Redemption rights
provided in Section 8.6 hereof.
(5) No Further Transfers. The transferee (other than
a Designated Party) shall not be permitted to effect any further
Transfer of the Partnership Units, other than to the General Partner.
(6) Exception for Permitted Transfers. The conditions
of Sections 11.3.A(1) through 11.3.A(5) hereof shall not apply in the
case of a Permitted Transfer.
It is a condition to any Transfer otherwise permitted hereunder (whether or not
such Transfer is effected during or after the first Twelve-Month Period) that
the transferee assumes by operation of law or express agreement all of the
obligations of the transferor Limited Partner under this Agreement with respect
to such Transferred Partnership Interest, and no such Transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor Partner are assumed by a successor corporation by
operation of law) shall relieve the transferor Partner of its obligations under
this Agreement without the approval of the General Partner, in its sole and
absolute discretion. Notwithstanding the foregoing, any transferee of any
Transferred Partnership Interest shall be subject to any and all ownership
limitations (including, without limitation, the Ownership Limit) contained in
the Charter that may limit or restrict such transferee's ability to exercise its
Redemption rights, including, without limitation, the Ownership Limit. Any
transferee, whether or not admitted as a Substituted Limited Partner, shall take
subject to the obligations of the transferor hereunder. Unless admitted as a
Substituted Limited Partner, no transferee, whether by a voluntary Transfer, by
operation of law or otherwise, shall have any rights hereunder, other than the
rights of an Assignee as provided in Section 11.5 hereof.
B. Incapacity. If a Limited Partner is subject to Incapacity,
the executor, administrator, trustee, committee, guardian, conservator or
receiver of such Limited Partner's estate shall have all the rights of a Limited
Partner, but not more rights than those enjoyed by other Limited Partners, for
the purpose of settling or managing the estate, and such power as the
Incapacitated Limited Partner possessed to Transfer all or any part of its
interest in the Partnership. The Incapacity of a Limited Partner, in and of
itself, shall not dissolve or terminate the Partnership.
C. Opinion of Counsel. In connection with any Transfer of a
Limited Partner Interest, the General Partner shall have the right to receive an
opinion of counsel reasonably satisfactory to it to the effect that the proposed
Transfer may be effected without registration under the Securities Act and will
not otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the Partnership Interests Transferred. If, in
the opinion of such counsel, such Transfer would require the filing of a
registration statement under the Securities Act or would otherwise violate any
federal or state securities laws or regulations applicable to the Partnership or
the Partnership Units, the General Partner may prohibit any Transfer otherwise
permitted under this Section 11.3 by a Limited Partner of Partnership Interests.
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D. Adverse Tax Consequences. No Transfer by a Limited Partner
of its Partnership Interests (including any Redemption, any other acquisition of
Partnership Units by the General Partner or any acquisition of Partnership Units
by the Partnership) may be made to any person if (i) in the opinion of legal
counsel for the Partnership, it would result in the Partnership being treated as
an association taxable as a corporation, or (ii) such Transfer is effectuated
through an "established securities market" or a "secondary market (or the
substantial equivalent thereof)" within the meaning of Code Section 7704.
Section 11.4 Substituted Limited Partners.
A. No Limited Partner shall have the right to substitute a
transferee (including any Designated Party or other transferees pursuant to
Transfers permitted by Section 11.3 hereof) as a Limited Partner in its place. A
transferee (including, but not limited to, any Designated Party) of the interest
of a Limited Partner may be admitted as a Substituted Limited Partner only with
the Consent of the General Partner, which Consent may be given or withheld by
the General Partner in its sole and absolute discretion. The failure or refusal
by the General Partner to permit a transferee of any such interests to become a
Substituted Limited Partner shall not give rise to any cause of action against
the Partnership or the General Partner. Subject to the foregoing, an Assignee
shall not be admitted as a Substituted Limited Partner until and unless it
furnishes to the General Partner (i) evidence of acceptance, in form and
substance satisfactory to the General Partner, of all the terms, conditions and
applicable obligations of this Agreement, (ii) a counterpart signature page to
this Agreement executed by such Assignee and (iii) such other documents and
instruments as may be required or advisable, in the sole and absolute discretion
of the General Partner, to effect such Assignee's admission as a Substituted
Limited Partner.
B. A transferee who has been admitted as a Substituted Limited
Partner in accordance with this Article 11 shall have all the rights and powers
and be subject to all the restrictions and liabilities of a Limited Partner
under this Agreement.
C. Upon the admission of a Substituted Limited Partner, the
General Partner shall amend Exhibit A to reflect the name, address and number of
Partnership Units of such Substituted Limited Partner and to eliminate or
adjust, if necessary, the name, address and number of Partnership Units of the
predecessor of such Substituted Limited Partner.
Section 11.5 Assignees. If the General Partner, in its sole
and absolute discretion, does not consent to the admission of any permitted
transferee under Section 11.3 hereof as a Substituted Limited Partner, as
described in Section 11.4 hereof, such transferee shall be considered an
Assignee for purposes of this Agreement. An Assignee shall be entitled to all
the rights of an assignee of a limited partnership interest under the Act,
including the right to receive distributions from the Partnership and the share
of Net Income, Net Losses and other items of income, gain, loss, deduction and
credit of the Partnership attributable to the Partnership Units assigned to such
transferee and the rights to Transfer the Partnership Units provided in this
Article 11, but shall not be deemed to be a holder of Partnership Units for any
other purpose under this Agreement (other than as expressly provided in Section
8.6 hereof with respect to a Qualifying Party that becomes a Tendering Party),
and shall not be entitled to effect a Consent or vote with respect to such
Partnership Units on any matter presented to the Limited Partners for approval
(such right to Consent or vote, to the extent provided in this Agreement or
under the Act, fully remaining with the transferor Limited Partner). In the
event that any such transferee desires to make a further assignment of any such
Partnership Units, such transferee shall be subject to all the provisions of
this Article 11 to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of Partnership Units.
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Section 11.6 General Provisions.
A. No Limited Partner may withdraw from the Partnership other
than as a result of a permitted Transfer of all of such Limited Partner's
Partnership Units in accordance with this Article 11, with respect to which the
transferee becomes a Substituted Limited Partner, or pursuant to a redemption
(or acquisition by the Previous General Partner) of all of its Partnership Units
pursuant to a Redemption under Section 8.6 hereof and/or pursuant to any
Partnership Unit Designation.
B. Any Limited Partner who shall Transfer all of its
Partnership Units in a Transfer (i) permitted pursuant to this Article 11 where
such transferee was admitted as a Substituted Limited Partner, (ii) pursuant to
the exercise of its rights to effect a redemption of all of its Partnership
Units pursuant to a Redemption under Section 8.6 hereof and/or pursuant to any
Partnership Unit Designation or (iii) to the Previous General Partner or the
General Partner, whether or not pursuant to Section 8.6.B hereof, shall cease to
be a Limited Partner.
C. If any Partnership Unit is Transferred in compliance with
the provisions of this Article 11, or is redeemed by the Partnership, or
acquired by the Previous General Partner pursuant to Section 8.6 hereof, on any
day other than the first day of a Fiscal Year, then Net Income, Net Losses, each
item thereof and all other items of income, gain, loss, deduction and credit
attributable to such Partnership Unit for such Fiscal Year shall be allocated to
the transferor Partner or the Tendering Party, as the case may be, and, in the
case of a Transfer or assignment other than a Redemption, to the transferee
Partner (including, without limitation, the General Partner and the Special
Limited Partner as transferees of the Previous General Partner in the case of an
acquisition of Partnership Common Units pursuant to Section 8.6 hereof), by
taking into account their varying interests during the Fiscal Year in accordance
with Code Section 706(d), using the "interim closing of the books" method or
another permissible method selected by the General Partner. Solely for purposes
of making such allocations, each of such items for the calendar month in which a
Transfer occurs shall be allocated to the transferee Partner and none of such
items for the calendar month in which a Transfer or a Redemption occurs shall be
allocated to the transferor Partner or the Tendering Party, as the case may be,
if such Transfer occurs on or before the fifteenth (15th) day of the month,
otherwise such items shall be allocated to the transferor. All distributions of
Available Cash attributable to such Partnership Unit with respect to which the
Partnership Record Date is before the date of such Transfer, assignment or
Redemption shall be made to the transferor Partner or the Tendering Party, as
the case may be, and, in the case of a Transfer other than a Redemption, all
distributions of Available Cash thereafter attributable to such Partnership Unit
shall be made to the transferee Partner.
D. In addition to any other restrictions on Transfer herein
contained, in no event may any Transfer or assignment of a Partnership Interest
by any Partner (including any Redemption, any acquisition of Partnership Units
by the Previous General Partner or any other acquisition of Partnership Units by
the Partnership) be made (i) to any person or entity who lacks the legal right,
power or capacity to own a Partnership Interest; (ii) in violation of applicable
law; (iii) of any component portion of a Partnership Interest, such as the
Capital Account, or rights to distributions, separate and apart from all other
components of a Partnership Interest; (iv) in the event that such Transfer would
cause either (a) the Previous General Partner to cease to comply with the REIT
Requirements or (b) the General Partner or the Special Limited Partner to cease
to qualify as a "qualified REIT subsidiary" (within the meaning of Code Section
856(i)(2); (v) if such Transfer would, in the opinion of counsel to the
Partnership or the General Partner, cause a termination of the Partnership for
federal or state income tax purposes (except as a result of the Redemption (or
acquisition by the Previous General Partner) of all Partnership Common Units
held by all Limited Partners other than the Special Limited Partner); (vi) if
such Transfer would, in the opinion of legal counsel to the Partnership, cause
the Partnership to cease to be classified as a partnership for federal income
tax purposes (except as a result of the Redemption (or acquisition by the
Previous General Partner) of all Partnership Common Units held by all Limited
Partners other than the Special Limited Partner); (vii) if such Transfer would
cause the Partnership to
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become, with respect to any employee benefit plan subject to Title I of ERISA, a
"party-in-interest" (as defined in ERISA Section 3(14)) or a "disqualified
person" (as defined in Code Section 4975(c)); (viii) if such Transfer would, in
the opinion of legal counsel to the Partnership, cause any portion of the assets
of the Partnership to constitute assets of any employee benefit plan pursuant to
Department of Labor Regulations Section 2510.2-101; (ix) if such Transfer
requires the registration of such Partnership Interest pursuant to any
applicable federal or state securities laws; (x) if such Transfer causes the
Partnership to become a "publicly traded partnership," as such term is defined
in Code Section 469(k)(2) or Code 7704(b); or (xi) if such Transfer subjects the
Partnership to regulation under the Investment Company Act of 1940, the
Investment Advisors Act of 1940 or ERISA, each as amended.
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner. A
successor to all of the General Partner's General Partner Interest pursuant to
Section 11.2 hereof who is proposed to be admitted as a successor General
Partner shall be admitted to the Partnership as the General Partner, effective
immediately prior to such Transfer. Any such successor shall carry on the
business of the Partnership without dissolution. In each case, the admission
shall be subject to the successor General Partner executing and delivering to
the Partnership an acceptance of all of the terms and conditions of this
Agreement and such other documents or instruments as may be required to effect
the admission.
Section 12.2 Admission of Additional Limited Partners.
A. After the admission to the Partnership of an Original
Limited Partner on the date hereof, a Person (other than an existing Partner)
who makes a Capital Contribution to the Partnership in accordance with this
Agreement shall be admitted to the Partnership as an Additional Limited Partner
only upon furnishing to the General Partner (i) evidence of acceptance, in form
and substance satisfactory to the General Partner, of all of the terms and
conditions of this Agreement, including, without limitation, the power of
attorney granted in Section 2.4 hereof, (ii) a counterpart signature page to
this Agreement executed by such Person and (iii) such other documents or
instruments as may be required in the sole and absolute discretion of the
General Partner in order to effect such Person's admission as an Additional
Limited Partner.
B. Notwithstanding anything to the contrary in this Section
12.2, no Person shall be admitted as an Additional Limited Partner without the
consent of the General Partner, which consent may be given or withheld in the
General Partner's sole and absolute discretion. The admission of any Person as
an Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.
C. If any Additional Limited Partner is admitted to the
Partnership on any day other than the first day of a Fiscal Year, then Net
Income, Net Losses, each item thereof and all other items of income, gain, loss,
deduction and credit allocable among Partners and Assignees for such Fiscal Year
shall be allocated among such Additional Limited Partner and all other Partners
and Assignees by taking into account their varying interests during the Fiscal
Year in accordance with Code Section 706(d), using the "interim closing of the
books" method or another permissible method selected by the General Partner.
Solely for purposes of making such allocations, each of such items for the
calendar month in which an admission of any Additional Limited Partner occurs
shall be allocated among all the Partners and Assignees including such
Additional Limited Partner, in accordance with the principles described in
Section 11.6.C hereof. All distributions of Available Cash with respect to which
the Partnership Record Date is before the date of such admission shall be made
solely to Partners and Assignees other than the Additional Limited Partner, and
all distributions of Available Cash thereafter shall be made to all the Partners
and Assignees including such Additional Limited Partner.
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Section 12.3 Amendment of Agreement and Certificate of Limited
Partnership. For the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Act to amend
the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 2.4 hereof.
Section 12.4 Admission of Initial Limited Partners. The
Persons listed on Exhibit A as limited partners of the Partnership shall be
admitted to the Partnership as Limited Partners upon their execution and
delivery of this Agreement.
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1 Dissolution. The Partnership shall not be
dissolved by the admission of Substituted Limited Partners or Additional Limited
Partners or by the admission of a successor General Partner in accordance with
the terms of this Agreement. Upon the withdrawal of the General Partner, any
successor General Partner shall continue the business of the Partnership without
dissolution. However, the Partnership shall dissolve, and its affairs shall be
wound up, upon the first to occur of any of the following (each a "Liquidating
Event"):
A. the expiration of its term as provided in Section 2.5
hereof;
B. an event of withdrawal, as defined in the Act (including,
without limitation, bankruptcy), of the sole General Partner unless, within
ninety (90) days after the withdrawal, a "majority in interest" (as such phrase
is used in Section 17-801(3) of the Act) of the remaining Partners agree in
writing, in their sole and absolute discretion, to continue the business of the
Partnership and to the appointment, effective as of the date of withdrawal, of a
successor General Partner:
C. an election to dissolve the Partnership made by the General
Partner in its sole and absolute discretion, with or without the Consent of the
Limited Partners;
D. entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the
Act;
E. the occurrence of a Terminating Capital Transaction;
F. the Redemption (or acquisition by the Previous General
Partner, the General Partner and/or the Special Limited Partner) of all
Partnership Common Units other than Partnership Common Units held by the General
Partner or the Special Limited Partner; or
G. the Redemption (or acquisition by the General Partner) of
all Partnership Common Units other than Partnership Common Units held by the
General Partner.
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Section 13.2 Winding Up.
A. Upon the occurrence of a Liquidating Event, the Partnership
shall continue solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets and satisfying the claims of its creditors and
Partners. After the occurrence of a Liquidating Event, no Partner shall take any
action that is inconsistent with, or not necessary to or appropriate for, the
winding up of the Partnership's business and affairs. The General Partner (or,
in the event that there is no remaining General Partner or the General Partner
has dissolved, become bankrupt within the meaning of the Act or ceased to
operate, any Person elected by a Majority in Interest of the Limited Partners
(the General Partner or such other Person being referred to herein as the
"Liquidator")) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership's
liabilities and property, and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the General Partner,
include shares of stock in the Previous General Partner) shall be applied and
distributed in the following order:
(1) First, to the satisfaction of all of the
Partnership's debts and liabilities to creditors other than the
Partners and their Assignees (whether by payment or the making of
reasonable provision for payment thereof);
(2) Second, to the satisfaction of all of the
Partnership's debts and liabilities to the General Partner (whether by
payment or the making of reasonable provision for payment thereof),
including, but not limited to, amounts due as reimbursements under
Section 7.4 hereof;
(3) Third, to the satisfaction of all of the
Partnership's debts and liabilities to the other Partners and any
Assignees (whether by payment or the making of reasonable provision for
payment thereof); and
(4) Subject to the terms of any Partnership Unit
Designation, the balance, if any, to the General Partner, the Limited
Partners and any Assignees in accordance with and in proportion to
their positive Capital Account balances, after giving effect to all
contributions, distributions and allocations for all periods.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.
B. Notwithstanding the provisions of Section 13.2.A hereof
that require liquidation of the assets of the Partnership, but subject to the
order of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
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C. In the event that the Partnership is "liquidated" within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be
made pursuant to this Article 13 to the Partners and Assignees that have
positive Capital Accounts in compliance with Regulations Section
1.704-1(b)(2)(ii)(b)(2) to the extent of, and in proportion to, positive Capital
Account balances. If any Partner has a deficit balance in its Capital Account
(after giving effect to all contributions, distributions and allocations for all
taxable years, including the year during which such liquidation occurs), such
Partner shall have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever. In the sole and absolute discretion of the General Partner or the
Liquidator, a pro rata portion of the distributions that would otherwise be made
to the Partners pursuant to this Article 13 may be withheld or escrowed to
provide a reasonable reserve for Partnership liabilities (contingent or
otherwise) and to reflect the unrealized portion of any installment obligations
owed to the Partnership, provided that such withheld or escrowed amounts shall
be distributed to the General Partner and Limited Partners in the manner and
order of priority set forth in Section 13.2.A hereof as soon as practicable.
Section 13.3 Deemed Distribution and Recontribution.
Notwithstanding any other provision of this Article 13, in the event that the
Partnership is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), but no Liquidating Event has occurred, the Partnership's
Property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged and the Partnership's affairs shall not be wound up. Instead,
for federal income tax purposes the Partnership shall be deemed to have
distributed the Property in kind to the Partners and the Assignees, who shall be
deemed to have assumed and taken such Property subject to all Partnership
liabilities, all in accordance with their respective Capital Accounts.
Immediately thereafter, the Partners and the Assignees shall be deemed to have
recontributed the Partnership Property in kind to the Partnership, which shall
be deemed to have assumed and taken such Property subject to all such
liabilities; provided, however, that nothing in this Section 13.3 shall be
deemed to have constituted any Assignee as a Substituted Limited Partner without
compliance with the provisions of Section 11.4 hereof.
Section 13.4 Rights of Limited Partners. Except as otherwise
provided in this Agreement, (a) each Limited Partner shall look solely to the
assets of the Partnership for the return of its Capital Contribution, (b) no
Limited Partner shall have the right or power to demand or receive property
other than cash from the Partnership and (c) no Limited Partner shall have
priority over any other Limited Partner as to the return of its Capital
Contributions, distributions or allocations.
Section 13.5 Notice of Dissolution. In the event that a
Liquidating Event occurs or an event occurs that would, but for an election or
objection by one or more Partners pursuant to Section 13.1 hereof, result in a
dissolution of the Partnership, the General Partner shall, within thirty (30)
days thereafter, provide written notice thereof to each of the Partners and, in
the General Partner's sole and absolute discretion or as required by the Act, to
all other parties with whom the Partnership regularly conducts business (as
determined in the sole and absolute discretion of the General Partner), and the
General Partner may, or, if required by the Act, shall, publish notice thereof
in a newspaper of general circulation in each place in which the Partnership
regularly conducts business (as determined in the sole and absolute discretion
of the General Partner).
Section 13.6 Cancellation of Certificate of Limited
Partnership. Upon the completion of the liquidation of the Partnership cash and
property as provided in Section 13.2 hereof, the Partnership shall be
terminated, a certificate of cancellation shall be filed with the State of
Delaware, all qualifications of the Partnership as a foreign limited partnership
or association in jurisdictions other than the State of Delaware shall be
cancelled, and such other actions as may be necessary to terminate the
Partnership shall be taken.
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Section 13.7 Reasonable Time for Winding-Up. A reasonable time
shall be allowed for the orderly winding-up of the business and affairs of the
Partnership and the liquidation of its assets pursuant to Section 13.2 hereof,
in order to minimize any losses otherwise attendant upon such winding-up, and
the provisions of this Agreement shall remain in effect between the Partners
during the period of liquidation.
ARTICLE 14
PROCEDURES FOR ACTIONS AND CONSENTS
OF PARTNERS; AMENDMENTS; MEETINGS
Section 14.1 Procedures for Actions and Consents of Partners.
The actions requiring consent or approval of Limited Partners pursuant to this
Agreement, including Section 7.3 hereof, or otherwise pursuant to applicable
law, are subject to the procedures set forth in this Article 14.
Section 14.2 Amendments. Amendments to this Agreement may be
proposed by the General Partner or by a Majority in Interest of the Limited
Partners. Following such proposal, the General Partner shall submit any proposed
amendment to the Limited Partners. The General Partner shall seek the written
consent of the Limited Partners on the proposed amendment or shall call a
meeting to vote thereon and to transact any other business that the General
Partner may deem appropriate. For purposes of obtaining a written consent, the
General Partner may require a response within a reasonable specified time, but
not less than fifteen (15) days, and failure to respond in such time period
shall constitute a consent that is consistent with the General Partner's
recommendation with respect to the proposal; provided, however, that an action
shall become effective at such time as requisite consents are received even if
prior to such specified time.
Section 14.3 Meetings of the Partners.
A. Meetings of the Partners may be called by the General
Partner and shall be called upon the receipt by the General Partner of a written
request by a Majority in Interest of the Limited Partners. The call shall state
the nature of the business to be transacted. Notice of any such meeting shall be
given to all Partners not less than seven (7) days nor more than thirty (30)
days prior to the date of such meeting. Partners may vote in person or by proxy
at such meeting. Whenever the vote or Consent of Partners is permitted or
required under this Agreement, such vote or Consent may be given at a meeting of
Partners or may be given in accordance with the procedure prescribed in Section
14.3.B hereof.
B. Any action required or permitted to be taken at a meeting
of the Partners may be taken without a meeting if a written consent setting
forth the action so taken is signed by a majority of the Percentage Interests of
the Partners (or such other percentage as is expressly required by this
Agreement for the action in question). Such consent may be in one instrument or
in several instruments, and shall have the same force and effect as a vote of a
majority of the Percentage Interests of the Partners (or such other percentage
as is expressly required by this Agreement). Such consent shall be filed with
the General Partner. An action so taken shall be deemed to have been taken at a
meeting held on the effective date so certified.
C. Each Limited Partner may authorize any Person or Persons to
act for it by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or its
attorney-in-fact. No proxy shall be valid after the expiration of eleven (11)
months from the date thereof unless otherwise provided in the proxy (or there is
receipt of a proxy authorizing a later date). Every proxy shall be revocable at
the pleasure of the Limited Partner executing it, such revocation to be
effective upon the Partnership's receipt of written notice of such revocation
from the Limited Partner executing such proxy.
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D. Each meeting of Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to such
rules for the conduct of the meeting as the General Partner or such other Person
deems appropriate in its sole and absolute discretion. Without limitation,
meetings of Partners may be conducted in the same manner as meetings of the
General Partner's shareholders and may be held at the same time as, and as part
of, the meetings of the General Partner's shareholders.
ARTICLE 15
GENERAL PROVISIONS
Section 15.1 Addresses and Notice. Any notice, demand, request
or report required or permitted to be given or made to a Partner or Assignee
under this Agreement shall be in writing and shall be deemed given or made when
delivered in person or when sent by first class United States mail or by other
means of written communication (including by telecopy, facsimile, or commercial
courier service) to the Partner or Assignee at the address set forth in Exhibit
A or such other address of which the Partner shall notify the General Partner in
writing.
Section 15.2 Titles and Captions. All article or section
titles or captions in this Agreement are for convenience only. They shall not be
deemed part of this Agreement and in no way define, limit, extend or describe
the scope or intent of any provisions hereof. Except as specifically provided
otherwise, references to "Articles" or "Sections" are to Articles and Sections
of this Agreement.
Section 15.3 Pronouns and Plurals. Whenever the context may
require, any pronouns used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns, pronouns
and verbs shall include the plural and vice versa.
Section 15.4 Further Action. The parties shall execute and
deliver all documents, provide all information and take or refrain from taking
action as may be necessary or appropriate to achieve the purposes of this
Agreement.
Section 15.5 Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and permitted assigns.
Section 15.6 Waiver.
A. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
B. The restrictions, conditions and other limitations on the
rights and benefits of the Limited Partners contained in this Agreement, and the
duties, covenants and other requirements of performance or notice by the Limited
Partners, are for the benefit of the Partnership and, except for an obligation
to pay money to the Partnership, may be waived or relinquished by the General
Partner, in its sole and absolute discretion, on behalf of the Partnership in
one or more instances from time to time and at any time; provided, however, that
any such waiver or relinquishment may not be made if it would have the effect of
(i) creating liability for any other Limited Partner,
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(ii) causing the Partnership to cease to qualify as a limited partnership, (iii)
reducing the amount of cash otherwise distributable to the Limited Partners,
(iv) resulting in the classification of the Partnership as an association or
publicly traded partnership taxable as a corporation or (v) violating the
Securities Act, the Exchange Act or any state "blue sky" or other securities
laws; provided, further, that any waiver relating to compliance with the
Ownership Limit or other restrictions in the Charter shall be made and shall be
effective only as provided in the Charter.
Section 15.7 Counterparts. This Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart. Each party shall become
bound by this Agreement immediately upon affixing its signature hereto.
Section 15.8 Applicable Law. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the State of
Delaware, without regard to the principles of conflicts of law. In the event of
a conflict between any provision of this Agreement and any non-mandatory
provision of the Act, the provisions of this Agreement shall control and take
precedence.
Section 15.9 Entire Agreement. This Agreement contains all of
the understandings and agreements between and among the Partners with respect to
the subject matter of this Agreement and the rights, interests and obligations
of the Partners with respect to the Partnership.
Section 15.10 Invalidity of Provisions. If any provision of
this Agreement is or becomes invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.
Section 15.11 Limitation to Preserve REIT Status.
Notwithstanding anything else in this Agreement, to the extent that the amount
paid, credited, distributed or reimbursed by the Partnership to any REIT Partner
or its officers, directors, employees or agents, whether as a reimbursement,
fee, expense or indemnity (a "REIT Payment"), would constitute gross income to
the REIT Partner for purposes of Code Section 856(c)(2) or Code Section
856(c)(3), then, notwithstanding any other provision of this Agreement, the
amount of such REIT Payments, as selected by the General Partner in its
discretion from among items of potential distribution, reimbursement, fees,
expenses and indemnities, shall be reduced for any Fiscal Year so that the REIT
Payments, as so reduced, for or with respect to such REIT Partner shall not
exceed the lesser of:
(i) an amount equal to the excess, if any,
of (a) four and nine-tenths percent (4.9%) of the REIT Partner's total
gross income (but excluding the amount of any REIT Payments) for the
Fiscal Year that is described in subsections (A) through (H) of Code
Section 856(c)(2) over (b) the amount of gross income (within the
meaning of Code Section 856(c)(2)) derived by the REIT Partner from
sources other than those described in subsections (A) through (H) of
Code Section 856(c)(2) (but not including the amount of any REIT
Payments); or
(ii) an amount equal to the excess, if any,
of (a) twenty-four percent (24%) of the REIT Partner's total gross
income (but excluding the amount of any REIT Payments) for the Fiscal
Year that is described in subsections (A) through (I) of Code Section
856(c)(3) over (b) the amount of gross income (within the meaning of
Code Section 856(c)(3)) derived by the REIT Partner from sources other
than those described in subsections (A) through (I) of Code Section
856(c)(3) (but not including the amount of any REIT Payments);
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provided, however, that REIT Payments in excess of the amounts set forth in
clauses (i) and (ii) above may be made if the General Partner, as a condition
precedent, obtains an opinion of tax counsel that the receipt of such excess
amounts shall not adversely affect the REIT Partner's ability to qualify as a
REIT. To the extent that REIT Payments may not be made in a Fiscal Year as a
consequence of the limitations set forth in this Section 15.11, such REIT
Payments shall carry over and shall be treated as arising in the following
Fiscal Year. The purpose of the limitations contained in this Section 15.11 is
to prevent any REIT Partner from failing to qualify as a REIT under the Code by
reason of such REIT Partner's share of items, including distributions,
reimbursements, fees, expenses or indemnities, receivable directly or indirectly
from the Partnership, and this Section 15.11 shall be interpreted and applied to
effectuate such purpose.
Section 15.12 No Partition. No Partner nor any
successor-in-interest to a Partner shall have the right while this Agreement
remains in effect to have any property of the Partnership partitioned, or to
file a complaint or institute any proceeding at law or in equity to have such
property of the Partnership partitioned, and each Partner, on behalf of itself
and its successors and assigns hereby waives any such right. It is the intention
of the Partners that the rights of the parties hereto and their
successors-in-interest to Partnership property, as among themselves, shall be
governed by the terms of this Agreement, and that the rights of the Partners and
their successors-in-interest shall be subject to the limitations and
restrictions as set forth in this Agreement.
Section 15.13 No Third-Party Rights Created Hereby. The
provisions of this Agreement are solely for the purpose of defining the
interests of the Partners, inter se; and no other person, firm or entity (i.e.,
a party who is not a signatory hereto or a permitted successor to such signatory
hereto) shall have any right, power, title or interest by way of subrogation or
otherwise, in and to the rights, powers, title and provisions of this Agreement.
No creditor or other third party having dealings with the Partnership shall have
the right to enforce the right or obligation of any Partner to make Capital
Contributions or loans to the Partnership or to pursue any other right or remedy
hereunder or at law or in equity. None of the rights or obligations of the
Partners herein set forth to make Capital Contributions or loans to the
Partnership shall be deemed an asset of the Partnership for any purpose by any
creditor or other third party, nor may any such rights or obligations be sold,
transferred or assigned by the Partnership or pledged or encumbered by the
Partnership to secure any debt or other obligation of the Partnership or any of
the Partners.
[the next page is the signature page]
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
first written above.
PREVIOUS GENERAL PARTNER:
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice Chairman
GENERAL PARTNER:
AIMCO-GP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
SPECIAL LIMITED PARTNER:
AIMCO-LP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
LIMITED PARTNERS:
By: AIMCO-GP, INC.,
as attorney-in-fact
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
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EXHIBIT A
PARTNERS AND PARTNERSHIP UNITS
Exhibit A, the list of Partners and Partnership Units, is
maintained by the General Partner and omitted from this copy of the Agreement.
A-1
69
EXHIBIT B
EXAMPLES REGARDING ADJUSTMENT FACTOR
For purposes of the following examples, it is assumed that (a)
the Adjustment Factor in effect on June 30, 1995 is 1.0 and (b) on July 1, 1995
(the "Partnership Record Date" for purposes of these examples), prior to the
events described in the examples, there are 100 REIT Shares issued and
outstanding.
Example 1
On the Partnership Record Date, the Previous General Partner
declares a dividend on its outstanding REIT Shares in REIT Shares. The amount of
the dividend is one REIT Share paid in respect of each REIT Share owned.
Pursuant to Paragraph (i) of the definition of "Adjustment Factor," the
Adjustment Factor shall be adjusted on the Partnership Record Date, effective
immediately after the stock dividend is declared, as follows:
1.0 * 200 =2.0
-----
100
Accordingly, the Adjustment Factor after the stock dividend is
declared is 2.0.
Example 2
On the Partnership Record Date, the Previous General Partner
distributes options to purchase REIT Shares to all holders of its REIT Shares.
The amount of the distribution is one option to acquire one REIT Share in
respect of each REIT Share owned. The strike price is $4.00 a share. The Value
of a REIT Share on the Partnership Record Date is $5.00 per share. Pursuant to
Paragraph (ii) of the definition of "Adjustment Factor," the Adjustment Factor
shall be adjusted on the Partnership Record Date, effective immediately after
the options are distributed, as follows:
1.0* (100+100) = 1.1111
-------------
(100 +100*$4.00)
----------
$5.00
Accordingly, the Adjustment Factor after the options are
distributed is 1.1111. If the options expire or become no longer exercisable,
then the retroactive adjustment specified in Paragraph (ii) of the definition of
"Adjustment Factor" shall apply.
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Example 3
On the Partnership Record Date, the Previous General Partner
distributes assets to all holders of its REIT Shares. The amount of the
distribution is one asset with a fair market value (as determined by the General
Partner) of $1.00 in respect of each REIT Share owned. It is also assumed that
the assets do not relate to assets received by the Previous General Partner or
the General Partner pursuant to a pro rata distribution by the Partnership. The
Value of a REIT Share on the Partnership Record Date is $5.00 a share. Pursuant
to Paragraph (iii) of the definition of "Adjustment Factor," the Adjustment
Factor shall be adjusted on the Partnership Record Date, effective immediately
after the assets are distributed, as follows:
1.0 * $5.00 = 1.25
------------
$5.00-$1.00
Accordingly, the Adjustment Factor after the assets are
distributed is 1.25.
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EXHIBIT C
LIST OF DESIGNATED PARTIES
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Stonegate Funding Company
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. Spizzini
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. & ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Amerett ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇. & ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Sycamore Realty Trust, V
E. ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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EXHIBIT D
[INTENTIONALLY OMITTED]
D-1
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EXHIBIT E
NOTICE OF REDEMPTION
To: AIMCO-GP, Inc.
c/o Apartment Investment and
Management Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned Limited Partner or Assignee hereby irrevocably
tenders for Redemption _______ Partnership Common Units in AIMCO Properties,
L.P. in accordance with the terms of the Agreement of Limited Partnership of
AIMCO Properties, L.P., dated as of July 29, 1994, as amended (the "Agreement"),
and the Redemption rights referred to therein. All capitalized terms used herein
and not otherwise defined shall have the same meaning ascribed to them
respectively in the Agreement. The undersigned Limited Partner or Assignee:
(a) if the Partnership elects to redeem such Partnership
Common Units for REIT Shares rather than cash, hereby irrevocably
transfers, assigns, contributes and sets over to the Previous General
Partner all of the undersigned Limited Partner's or Assignee's right,
title and interest in and to such Partnership Common Units;
(b) undertakes (i) to surrender such Partnership Common Units
and any certificate therefor at the closing of the Redemption and (ii)
to furnish to the Previous General Partner, prior to the Specified
Redemption Date, the documentation, instruments and information
required under Section 8.6.G of the Agreement;
(c) directs that the certificate representing the REIT Shares,
or the certified check representing the Cash Amount, in either case,
deliverable upon the closing of such Redemption be delivered to the
address specified below;
(d) represents, warrants, certifies and agrees that:
(i) the undersigned Limited Partner or Assignee is
a Qualifying Party;
(ii) the undersigned Limited Partner or Assignee has,
and at the closing of the Redemption will have, good,
marketable and unencumbered title to such Partnership Common
Units, free and clear of the rights or interests of any other
person or entity;
(iii) the undersigned Limited Partner or Assignee
has, and at the closing of the Redemption will have, the full
right, power and authority to tender and surrender such
Partnership Common Units as provided herein; and
(iv) the undersigned Limited Partner or Assignee has
obtained the consent or approval of all persons and entities,
if any, having the right to consent to or approve such tender
and surrender; and
E-1
74
(e) acknowledges that he will continue to own such Partnership
Common Units until and unless such Redemption transaction closes.
Dated:
------------------ Name of Limited Partner or Assignee:
-----------------------------------------
-----------------------------------------
(Signature of Limited Partner or Assignee)
-----------------------------------------
(Street Address)
-----------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
-----------------------------------------
Issue Check Payable to:
-----------------------------------------
Please insert social security
or identifying number:
-----------------------------------------
E-2
75
EXHIBIT F
FORM OF UNIT CERTIFICATE
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP AN OPINION OF
COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO
THE PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER
DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS. IN ADDITION, THE LIMITED
PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN
THE AGREEMENT OF LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY
29, 1994, A COPY OF WHICH MAY BE OBTAINED FROM AIMCO-GP, INC., THE GENERAL
PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.
Certificate Number
--------
AIMCO PROPERTIES, L.P.
FORMED UNDER THE LAWS OF THE STATE OF DELAWARE
This certifies that
-----------------------------------------------------------
is the owner of
---------------------------------------------------------------
FULLY PAID PARTNERSHIP COMMON UNITS
OF
AIMCO PROPERTIES, L.P.,
transferable on the books of the Partnership in person or by duly authorized
attorney on the surrender of this Certificate properly endorsed. This
Certificate and the Partnership Common Units represented hereby are issued and
shall be held subject to all of the provisions of the Agreement of Limited
Partnership, as the same may be amended and/or supplemented from time to time.
IN WITNESS WHEREOF, the undersigned has signed this Certificate.
Dated:
By
--------------------------------
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76
For Value Received, hereby
--------------------------------
sells, assigns and transfers unto
---------------------------------------------
-------------------------------------------------------------------------------
Partnership Common Unit(s) represented by the within Certificate, and does
hereby irrevocably constitute and appoint the General Partner of AIMCO
Properties, L.P. as its Attorney to transfer said Partnership Common Unit(s) on
the books of AIMCO Properties, L.P. with full power of substitution in the
premises.
Dated:
--------------------
By:
------------------------------
Name:
F-2
77
EXHIBIT G
PARTNERSHIP UNIT DESIGNATION OF THE
CLASS B PARTNERSHIP PREFERRED UNITS
OF AIMCO PROPERTIES, L.P.
1. NUMBER OF UNITS AND DESIGNATION.
A class of Partnership Preferred Units is hereby designated as "Class B
Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be Seven Hundred Fifty Thousand (750,000).
2. DEFINITIONS.
For purposes of the Class B Partnership Preferred Units, the following
terms shall have the meanings indicated in this Section 2. Capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Agreement.
"Agreement" shall mean the Agreement of Limited Partnership of the
Partnership, as amended, supplemented or restated from time to time.
"Call Date" shall have the meaning set forth in paragraph (a) of
Section 5 of this Exhibit G.
"Class B Partnership Preferred Unit" means a Partnership Preferred Unit
with the designations, preferences and relative, participating,
optional or other special rights, powers and duties as are set forth in
this Exhibit G. It is the intention of the General Partner that each
Class B Partnership Preferred Unit shall be substantially the economic
equivalent of one share of Class B Preferred Stock.
"Class B Preferred Stock" means the Class B Cumulative Convertible
Preferred Stock, par value $0.01 per share, of the Previous General
Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Previous General Partner or such shares of the Previous
General Partner's capital stock into which outstanding shares of Common
Stock shall be reclassified.
"Distribution Payment Date" shall mean any date on which cash dividends
are paid on the Class B Preferred Stock.
"Junior Partnership Units" shall have the meaning set forth in
paragraph (c) of Section 8 of this Exhibit G.
"Parity Partnership Units" shall have the meaning set forth in
paragraph (b) of Section 8 of this Exhibit G.
G-1
78
"Partnership" shall mean AIMCO Properties, L.P., a Delaware limited
partnership.
"Senior Partnership Units" shall have the meaning set forth in
paragraph (a) of Section 8 of this Exhibit G.
3. DISTRIBUTIONS.
On every Distribution Payment Date, the holders of Class B
Partnership Preferred Units shall be entitled to receive distributions payable
in cash in an amount per Class B Partnership Preferred Unit equal to the per
share dividend payable on the Class B Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record
of the Class B Partnership Preferred Units, as they appear on the records of the
Partnership at the close of business on the record date for the dividend payable
with respect to the Class B Preferred Stock on such Distribution Payment Date.
Holders of Class B Partnership Preferred Units shall not be entitled to any
distributions on the Class B Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.
4. LIQUIDATION PREFERENCE.
(1) In the event of any liquidation, dissolution or winding up
of the Partnership, whether voluntary or involuntary, before any payment or
distribution of the Partnership (whether capital or surplus) shall be made to or
set apart for the holders of Junior Partnership Units, the holders of Class B
Partnership Preferred Units shall be entitled to receive One Hundred Dollars
($100) per Class B Partnership Preferred Unit (the "Liquidation Preference"),
plus an amount equal to all dividends (whether or not earned) accumulated,
accrued and unpaid on each share of Class B Preferred Stock to the date of final
distribution to such holders; but such holders shall not be entitled to any
further payment. Until the holders of the Class B Partnership Preferred Units
have been paid the Liquidation Preference in full, plus an amount equal to all
dividends (whether or not earned) accumulated, accrued and unpaid on the Class B
Preferred Stock to the date of final distribution to such holders, no payment
will be made to any holder of Junior Partnership Units upon the liquidation,
dissolution or winding up of the Partnership. If, upon any liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership, or
proceeds thereof, distributable among the holders of Class B Partnership
Preferred Units shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any Parity Partnership Units, then such
assets, or the proceeds thereof, shall be distributed among the holders of Class
B Partnership Preferred Units and any such Parity Partnership Units ratably in
the same proportion as the respective amounts that would be payable on such
Class B Partnership Preferred Units and any such other Parity Partnership Units
if all amounts payable thereon were paid in full. For the purposes of this
Section 4, (i) a consolidation or merger of the Partnership with one or more
partnerships, or (ii) a sale or transfer of all or substantially all of the
Partnership's assets shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Partnership.
(2) Upon any liquidation, dissolution or winding up of the
Partnership, after payment shall have been made in full to the holders of Class
B Partnership Preferred Units and any Parity Partnership Units, as provided in
this Section 4, any other series or class or classes of Junior Partnership Units
shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class B
Partnership Preferred Units and any Parity Partnership Units shall not be
entitled to share therein.
5. REDEMPTION.
Class B Partnership Preferred Units shall be redeemable by the
Partnership as follows:
(1) At any time that the Previous General Partner exercises
its right to redeem all or any of the shares of Class B Preferred Stock, the
General Partner shall cause the Partnership to redeem an equal number of
G-2
79
Class B Partnership Preferred Units, at a redemption price payable in cash equal
to 100% of the Liquidation Preference thereof, plus an amount equal to all
accrued and unpaid dividends on each share of Class B Preferred Stock to the
date fixed for redemption (the "Call Date"), in the manner set forth herein.
(2) If the Partnership shall redeem Class B Partnership
Preferred Units pursuant to paragraph (a) of this Section 5, from and after the
Call Date (unless the Partnership shall fail to make available the amount of
cash necessary to effect such redemption), (i) except for payment of the
redemption price, the Partnership shall not make any further distributions on
the Class B Partnership Preferred Units so called for redemption (except that,
in the case of a Call Date after a distribution record date and prior to the
related Distribution Payment Date, holders of Class B Partnership Preferred
Units on the distribution record date will be entitled on such Distribution
Payment Date to receive the distribution payable thereon), (ii) said units shall
no longer be deemed to be outstanding, and (iii) all rights of the holders
thereof as holders of Class B Partnership Preferred Units of the Partnership
shall cease (except the rights to receive the cash payable upon such redemption,
without interest thereon, and to receive any distributions payable thereon). No
interest shall accrue for the benefit of the holders of Class B Partnership
Preferred Units to be redeemed on any cash set aside by the Partnership.
If fewer than all the outstanding Class B Partnership Preferred Units
are to be redeemed, units to be redeemed shall be selected by the Partnership
from outstanding Class B Partnership Preferred Units not previously called for
redemption by any method determined by the General Partner in its discretion.
Upon any such redemption, the General Partner shall amend Exhibit A to the
Agreement as appropriate to reflect such redemption.
6. STATUS OF REACQUIRED UNITS.
All Class B Partnership Preferred Units which shall have been issued
and reacquired in any manner by the Partnership (including Class B Partnership
Preferred Units which have been surrendered for conversion into Partnership
Common Units) shall be deemed cancelled.
7. CONVERSION.
Class B Partnership Preferred Units shall be convertible by the holders
thereof as follows:
(1) Upon any conversion of shares of Class B Preferred Stock
into shares of Common Stock, the General Partner shall cause a number of Class B
Partnership Preferred Units equal to the number of such converted shares of
Class B Preferred Stock to be converted by the holders thereof into Partnership
Common Units. The conversion ratio in effect from time to time for the
conversion of Class B Partnership Preferred Units into Partnership Common Units
pursuant to this Section 7 shall at all times be equal to, and shall be
automatically adjusted as necessary to reflect, the conversion ratio in effect
from time to time for the conversion of Class B Preferred Stock into Common
Stock.
(2) Holders of Class B Partnership Preferred Units at the
close of business on a distribution payment record date shall be entitled to
receive the distribution payable on such units on the corresponding Distribution
Payment Date notwithstanding the conversion thereof following such distribution
payment record date and prior to such Distribution Payment Date. Except as
provided above, the Partnership shall make no payment or allowance for unpaid
distributions on converted units or for distributions on the Partnership Common
Units issued upon such conversion. Each conversion of Class B Partnership
Preferred Units into Partnership Common Units shall be deemed to have been
effected at the same time and date that the corresponding conversion of Class B
Preferred Stock into Common Stock is deemed to have been effected.
G-3
80
(3) No fractional Partnership Common Units shall be issued
upon conversion of Class B Partnership Preferred Units. Instead of any
fractional Partnership Common Units that would otherwise be deliverable upon the
conversion of Class B Partnership Preferred Units, the Partnership shall pay to
the holder of such converted units an amount in cash equal to the cash payable
to a holder of an equivalent number of converted shares of Class B Preferred
Stock in lieu of fractional shares of Common Stock.
(4) The Partnership will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of (i) the issue or delivery
of Partnership Common Units or other securities or property on conversion or
redemption of Class B Partnership Preferred Units pursuant hereto, and (ii) the
issue or delivery of Common Stock or other securities or property on conversion
or redemption of Class B Preferred Stock pursuant to the terms hereof.
8. RANKING.
Any class or series of Partnership Units of the Partnership shall be
deemed to rank:
(1) prior or senior to the Class B Partnership Preferred
Units, as to the payment of distributions and as to distributions of assets upon
liquidation, dissolution or winding up, if the holders of such class or series
shall be entitled to the receipt of distributions or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of Class B Partnership Preferred Units ("Senior
Partnership Units");
(2) on a parity with the Class B Partnership Preferred Units,
as to the payment of distributions and as to distribution of assets upon
liquidation, dissolution or winding up, whether or not the distribution rates,
distribution payment dates or redemption or liquidation prices per unit or other
denomination thereof be different from those of the Class B Partnership
Preferred Units, if the holders of such class or series of Partnership Units and
the Class B Partnership Preferred Units shall be entitled to the receipt of
distributions and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
distributions per unit or other denomination or liquidation preferences, without
preference or priority one over the other ("Parity Partnership Units"); and
(3) junior to the Class B Partnership Preferred Units, as to
the payment of distributions or as to the distribution of assets upon
liquidation, dissolution or winding up, if such class or series of Partnership
Units shall be Partnership Common Units or if the holders of Class B Preferred
Partnership Units shall be entitled to receipt of distributions or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of such class or series of Partnership
Units ("Junior Partnership Units").
9. SPECIAL ALLOCATIONS.
(1) Gross income and, if necessary, gain shall be allocated to
the holders of Class B Partnership Preferred Units for any Fiscal Year (and, if
necessary, subsequent Fiscal Years) to the extent that the holders of Class B
Partnership Preferred Units receive a distribution on any Class B Partnership
Preferred Units (other than an amount included in any redemption pursuant to
Section 5 hereof) with respect to such Fiscal Year.
(2) If any Class B Partnership Preferred Units are redeemed
pursuant to Section 5 hereof, for the Fiscal Year that includes such redemption
(and, if necessary, for subsequent Fiscal Years) (a) gross income and gain (in
such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class B Partnership Preferred
Units to the extent that the redemption amounts paid or payable with respect to
the Class B Partnership Preferred Units so redeemed exceeds the aggregate
Capital Contributions (net of liabilities
G-4
81
assumed or taken subject to by the Partnership) per Class B Partnership
Preferred Unit allocable to the Class B Partnership Preferred Units so redeemed
and (b) deductions and losses (in such relative proportions as the General
Partner in its discretion shall determine) shall be allocated to the holders of
Class B Partnership Preferred Units to the extent that the aggregate Capital
Contributions (net of liabilities assumed or taken subject to by the
Partnership) per Class B Partnership Preferred Unit allocable to the Class B
Partnership Preferred Units so redeemed exceeds the redemption amount paid or
payable with respect to the Class B Partnership Preferred Units so redeemed.
10. RESTRICTIONS ON OWNERSHIP.
The Class B Partnership Preferred Units shall be owned and held solely
by the General Partner or the Special Limited Partner.
11. GENERAL.
(1) The ownership of Class B Partnership Preferred Units may
(but need not, in the sole and absolute discretion of the General Partner) be
evidenced by one or more certificates. The General Partner shall amend Exhibit A
to the Agreement from time to time to the extent necessary to reflect accurately
the issuance of, and subsequent conversion, redemption, or any other event
having an effect on the ownership of, Class B Partnership Preferred Units.
(2) The rights of the General Partner and the Special Limited
Partner, in their capacity as holders of the Class B Partnership Preferred
Units, are in addition to and not in limitation of any other rights or authority
of the General Partner or the Special Limited Partner, respectively, in any
other capacity under the Agreement or applicable law. In addition, nothing
contained herein shall be deemed to limit or otherwise restrict the authority of
the General Partner or the Special Limited Partner under the Agreement, other
than in their capacity as holders of the Class B Partnership Preferred Units.
G-5
82
EXHIBIT H
PARTNERSHIP UNIT DESIGNATION OF THE
CLASS C PARTNERSHIP PREFERRED UNITS
OF AIMCO PROPERTIES, L.P.
1. NUMBER OF UNITS AND DESIGNATION.
A class of Partnership Preferred Units is hereby designated as "Class C
Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be Two Million Seven Hundred Sixty Thousand
(2,760,000).
2. DEFINITIONS.
For purposes of the Class C Partnership Preferred Units, the following
terms shall have the meanings indicated in this Section 2. Capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Agreement.
"Agreement" shall mean the Agreement of Limited Partnership of the
Partnership, as amended, supplemented or restated from time to time.
"Call Date" shall have the meaning set forth in paragraph (a) of
Section 5 of this Exhibit H.
"Class C Partnership Preferred Unit" means a Partnership Preferred Unit
with the designations, preferences and relative, participating,
optional or other special rights, powers and duties as are set forth in
this Exhibit H. It is the intention of the General Partner that each
Class C Partnership Preferred Unit shall be substantially the economic
equivalent of one share of Class C Preferred Stock.
"Class C Preferred Stock" means the Class C Cumulative Preferred Stock,
par value $0.01 per share, of the Previous General Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Previous General Partner or such shares of the Previous
General Partner's capital stock into which outstanding shares of Common
Stock shall be reclassified.
"Distribution Payment Date" shall mean any date on which cash dividends
are paid on the Class C Preferred Stock.
"Junior Partnership Units" shall have the meaning set forth in
paragraph (c) of Section 7 of this Exhibit H.
"Parity Partnership Units" shall have the meaning set forth in
paragraph (b) of Section 7 of this Exhibit H.
H-1
83
"Partnership" shall mean AIMCO Properties, L.P., a Delaware limited
partnership.
"Senior Partnership Units" shall have the meaning set forth in
paragraph (a) of Section 7 of this Exhibit H.
3. DISTRIBUTIONS.
On every Distribution Payment Date, the holders of Class C
Partnership Preferred Units shall be entitled to receive distributions payable
in cash in an amount per Class C Partnership Preferred Unit equal to the per
share dividend payable on the Class C Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record
of the Class C Partnership Preferred Units, as they appear on the records of the
Partnership at the close of business on the record date for the dividend payable
with respect to the Class C Preferred Stock on such Distribution Payment Date.
Holders of Class C Partnership Preferred Units shall not be entitled to any
distributions on the Class C Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.
4. LIQUIDATION PREFERENCE.
(1) In the event of any liquidation, dissolution or winding up
of the Partnership, whether voluntary or involuntary, before any payment or
distribution of the Partnership (whether capital or surplus) shall be made to or
set apart for the holders of Junior Partnership Units, the holders of Class C
Partnership Preferred Units shall be entitled to receive Twenty Five Dollars
($25) per Class C Partnership Preferred Unit (the "Liquidation Preference"),
plus an amount equal to all dividends (whether or not earned) accumulated,
accrued and unpaid on each share of Class C Preferred Stock to the date of final
distribution to such holders; but such holders shall not be entitled to any
further payment. Until the holders of the Class C Partnership Preferred Units
have been paid the Liquidation Preference in full, plus an amount equal to all
dividends (whether or not earned) accumulated, accrued and unpaid on the Class C
Preferred Stock to the date of final distribution to such holders, no payment
will be made to any holder of Junior Partnership Units upon the liquidation,
dissolution or winding up of the Partnership. If, upon any liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership, or
proceeds thereof, distributable among the holders of Class C Partnership
Preferred Units shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any Parity Partnership Units, then such
assets, or the proceeds thereof, shall be distributed among the holders of Class
C Partnership Preferred Units and any such Parity Partnership Units ratably in
the same proportion as the respective amounts that would be payable on such
Class C Partnership Preferred Units and any such other Parity Partnership Units
if all amounts payable thereon were paid in full. For the purposes of this
Section 4, (i) a consolidation or merger of the Partnership with one or more
partnerships, or (ii) a sale or transfer of all or substantially all of the
Partnership's assets shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Partnership.
(2) Upon any liquidation, dissolution or winding up of the
Partnership, after payment shall have been made in full to the holders of Class
C Partnership Preferred Units and any Parity Partnership Units, as provided in
this Section 4, any other series or class or classes of Junior Partnership Units
shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class C
Partnership Preferred Units and any Parity Partnership Units shall not be
entitled to share therein.
5. REDEMPTION.
Class C Partnership Preferred Units shall be redeemable by the
Partnership as follows:
(1) At any time that the Previous General Partner exercises
its right to redeem all or any of the shares of Class C Preferred Stock, the
General Partner may cause the Partnership to redeem an equal number of
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Class C Partnership Preferred Units, at a redemption price payable in cash equal
to 100% of the Liquidation Preference thereof, plus an amount equal to all
accrued and unpaid dividends on each share of Class C Preferred Stock to the
date fixed for redemption (the "Call Date"), in the manner set forth herein.
(2) If the Partnership shall redeem Class C Partnership
Preferred Units pursuant to paragraph (a) of this Section 5, from and after the
Call Date (unless the Partnership shall fail to make available the amount of
cash necessary to effect such redemption), (i) except for payment of the
redemption price, the Partnership shall not make any further distributions on
the Class C Partnership Preferred Units so called for redemption (except that,
in the case of a Call Date after a distribution record date and prior to the
related Distribution Payment Date, holders of Class C Partnership Preferred
Units on the distribution record date will be entitled on such Distribution
Payment Date to receive the distribution payable thereon), (ii) said units shall
no longer be deemed to be outstanding, and (iii) all rights of the holders
thereof as holders of Class C Partnership Preferred Units of the Partnership
shall cease (except the rights to receive the cash payable upon such redemption,
without interest thereon, and to receive any distributions payable thereon). No
interest shall accrue for the benefit of the holders of Class C Partnership
Preferred Units to be redeemed on any cash set aside by the Partnership.
If fewer than all the outstanding Class C Partnership Preferred Units
are to be redeemed, units to be redeemed shall be selected by the Partnership
from outstanding Class C Partnership Preferred Units not previously called for
redemption by any method determined by the General Partner in its discretion.
Upon any such redemption, the General Partner shall amend Exhibit A to the
Agreement as appropriate to reflect such redemption.
6. STATUS OF REACQUIRED UNITS.
All Class C Partnership Preferred Units which shall have been issued
and reacquired in any manner by the Partnership shall be deemed cancelled.
7. RANKING.
Any class or series of Partnership Units of the Partnership shall be
deemed to rank:
(1) prior or senior to the Class C Partnership Preferred
Units, as to the payment of distributions and as to distributions of assets upon
liquidation, dissolution or winding up, if the holders of such class or series
shall be entitled to the receipt of distributions or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of Class C Partnership Preferred Units ("Senior
Partnership Units");
(2) on a parity with the Class C Partnership Preferred Units,
as to the payment of distributions and as to distribution of assets upon
liquidation, dissolution or winding up, whether or not the distribution rates,
distribution payment dates or redemption or liquidation prices per unit or other
denomination thereof be different from those of the Class C Partnership
Preferred Units if such Class or series of Partnership Units shall be Class B
Preferred Partnership Units or if the holders of such class or series of
Partnership Units and the Class C Partnership Preferred Units shall be entitled
to the receipt of distributions and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of accrued
and unpaid distributions per unit or other denomination or liquidation
preferences, without preference or priority one over the other ("Parity
Partnership Units"); and
(3) junior to the Class C Partnership Preferred Units, as to
the payment of distributions or as to the distribution of assets upon
liquidation, dissolution or winding up, if such class or series of Partnership
Units shall be Partnership Common Units or if the holders of Class C Preferred
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Partnership Units shall be entitled to receipt of distributions or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of such class or series of Partnership
Units ("Junior Partnership Units").
8. SPECIAL ALLOCATIONS.
(1) Gross income and, if necessary, gain shall be allocated to
the holders of Class C Partnership Preferred Units for any Fiscal Year (and, if
necessary, subsequent Fiscal Years) to the extent that the holders of Class C
Partnership Preferred Units receive a distribution on any Class C Partnership
Preferred Units (other than an amount included in any redemption pursuant to
Section 5 hereof) with respect to such Fiscal Year.
(2) If any Class C Partnership Preferred Units are redeemed
pursuant to Section 5 hereof, for the Fiscal Year that includes such redemption
(and, if necessary, for subsequent Fiscal Years) (a) gross income and gain (in
such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class C Partnership Preferred
Units to the extent that the redemption amounts paid or payable with respect to
the Class C Partnership Preferred Units so redeemed exceeds the aggregate
Capital Contributions (net of liabilities assumed or taken subject to by the
Partnership) per Class C Partnership Preferred Unit allocable to the Class C
Partnership Preferred Units so redeemed and (b) deductions and losses (in such
relative proportions as the General Partner in its discretion shall determine)
shall be allocated to the holders of Class C Partnership Preferred Units to the
extent that the aggregate Capital Contributions (net of liabilities assumed or
taken subject to by the Partnership) per Class C Partnership Preferred Unit
allocable to the Class C Partnership Preferred Units so redeemed exceeds the
redemption amount paid or payable with respect to the Class C Partnership
Preferred Units so redeemed.
9. RESTRICTIONS ON OWNERSHIP.
The Class C Partnership Preferred Units shall be owned and held solely
by the General Partner or the Special Limited Partner.
10. GENERAL.
(1) The ownership of Class C Partnership Preferred Units may
(but need not, in the sole and absolute discretion of the General Partner) be
evidenced by one or more certificates. The General Partner shall amend Exhibit A
to the Agreement from time to time to the extent necessary to reflect accurately
the issuance of, and subsequent conversion, redemption, or any other event
having an effect on the ownership of, Class C Partnership Preferred Units.
(2) The rights of the General Partner and the Special Limited
Partner, in their capacity as holders of the Class C Partnership Preferred
Units, are in addition to and not in limitation of any other rights or authority
of the General Partner or the Special Limited Partner, respectively, in any
other capacity under the Agreement or applicable law. In addition, nothing
contained herein shall be deemed to limit or otherwise restrict the authority of
the General Partner or the Special Limited Partner under the Agreement, other
than in their capacity as holders of the Class C Partnership Preferred Units.
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EXHIBIT I
PARTNERSHIP UNIT DESIGNATION OF THE
CLASS D PARTNERSHIP PREFERRED UNITS
OF AIMCO PROPERTIES, L.P.
1. NUMBER OF UNITS AND DESIGNATION.
A class of Partnership Preferred Units is hereby designated as "Class D
Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be Four Million Six Hundred Thousand (4,600,000).
2. DEFINITIONS.
For purposes of the Class D Partnership Preferred Units, the following
terms shall have the meanings indicated in this Section 2. Capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Agreement.
"Agreement" shall mean the Agreement of Limited Partnership of the
Partnership, as amended, supplemented or restated from time to time.
"Call Date" shall have the meaning set forth in paragraph (a) of
Section 5 of this Exhibit I.
"Class D Partnership Preferred Unit" means a Partnership Preferred Unit
with the designations, preferences and relative, participating,
optional or other special rights, powers and duties as are set forth in
this Exhibit I. It is the intention of the General Partner that each
Class D Partnership Preferred Unit shall be substantially the economic
equivalent of one share of Class D Preferred Stock.
"Class D Preferred Stock" means the Class D Cumulative Preferred Stock,
par value $0.01 per share, of the Previous General Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Previous General Partner or such shares of the Previous
General Partner's capital stock into which outstanding shares of Common
Stock shall be reclassified.
"Distribution Payment Date" shall mean any date on which cash dividends
are paid on the Class D Preferred Stock.
"Junior Partnership Units" shall have the meaning set forth in
paragraph (c) of Section 7 of this Exhibit I.
"Parity Partnership Units" shall have the meaning set forth in
paragraph (b) of Section 7 of this Exhibit I.
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"Partnership" shall mean AIMCO Properties, L.P., a Delaware limited
partnership.
"Senior Partnership Units" shall have the meaning set forth in
paragraph (a) of Section 7 of this Exhibit I.
3. DISTRIBUTIONS.
On every Distribution Payment Date, the holders of Class D
Partnership Preferred Units shall be entitled to receive distributions payable
in cash in an amount per Class D Partnership Preferred Unit equal to the per
share dividend payable on the Class D Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record
of the Class D Partnership Preferred Units, as they appear on the records of the
Partnership at the close of business on the record date for the dividend payable
with respect to the Class D Preferred Stock on such Distribution Payment Date.
Holders of Class D Partnership Preferred Units shall not be entitled to any
distributions on the Class D Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.
4. LIQUIDATION PREFERENCE.
(1) In the event of any liquidation, dissolution or winding up
of the Partnership, whether voluntary or involuntary, before any payment or
distribution of the Partnership (whether capital or surplus) shall be made to or
set apart for the holders of Junior Partnership Units, the holders of Class D
Partnership Preferred Units shall be entitled to receive Twenty Five Dollars
($25) per Class D Partnership Preferred Unit (the "Liquidation Preference"),
plus an amount equal to all dividends (whether or not earned) accumulated,
accrued and unpaid on each share of Class D Preferred Stock to the date of final
distribution to such holders; but such holders shall not be entitled to any
further payment. Until the holders of the Class D Partnership Preferred Units
have been paid the Liquidation Preference in full, plus an amount equal to all
dividends (whether or not earned) accumulated, accrued and unpaid on the Class D
Preferred Stock to the date of final distribution to such holders, no payment
will be made to any holder of Junior Partnership Units upon the liquidation,
dissolution or winding up of the Partnership. If, upon any liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership, or
proceeds thereof, distributable among the holders of Class D Partnership
Preferred Units shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any Parity Partnership Units, then such
assets, or the proceeds thereof, shall be distributed among the holders of Class
D Partnership Preferred Units and any such Parity Partnership Units ratably in
the same proportion as the respective amounts that would be payable on such
Class D Partnership Preferred Units and any such other Parity Partnership Units
if all amounts payable thereon were paid in full. For the purposes of this
Section 4, (i) a consolidation or merger of the Partnership with one or more
partnerships, or (ii) a sale or transfer of all or substantially all of the
Partnership's assets shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Partnership.
(2) Upon any liquidation, dissolution or winding up of the
Partnership, after payment shall have been made in full to the holders of Class
D Partnership Preferred Units and any Parity Partnership Units, as provided in
this Section 4, any other series or class or classes of Junior Partnership Units
shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class D
Partnership Preferred Units and any Parity Partnership Units shall not be
entitled to share therein.
5. REDEMPTION.
Class D Partnership Preferred Units shall be redeemable by the
Partnership as follows:
(1) At any time that the Previous General Partner exercises
its right to redeem all or any of the shares of Class D Preferred Stock, the
General Partner may cause the Partnership to redeem an equal number of
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Class D Partnership Preferred Units, at a redemption price payable in cash equal
to 100% of the Liquidation Preference thereof, plus an amount equal to all
accrued and unpaid dividends on each share of Class D Preferred Stock to the
date fixed for redemption (the "Call Date"), in the manner set forth herein.
(2) If the Partnership shall redeem Class D Partnership
Preferred Units pursuant to paragraph (a) of this Section 5, from and after the
Call Date (unless the Partnership shall fail to make available the amount of
cash necessary to effect such redemption), (i) except for payment of the
redemption price, the Partnership shall not make any further distributions on
the Class D Partnership Preferred Units so called for redemption (except that,
in the case of a Call Date after a distribution record date and prior to the
related Distribution Payment Date, holders of Class D Partnership Preferred
Units on the distribution record date will be entitled on such Distribution
Payment Date to receive the distribution payable thereon), (ii) said units shall
no longer be deemed to be outstanding, and (iii) all rights of the holders
thereof as holders of Class D Partnership Preferred Units of the Partnership
shall cease (except the rights to receive the cash payable upon such redemption,
without interest thereon, and to receive any distributions payable thereon). No
interest shall accrue for the benefit of the holders of Class D Partnership
Preferred Units to be redeemed on any cash set aside by the Partnership.
If fewer than all the outstanding Class D Partnership Preferred Units
are to be redeemed, units to be redeemed shall be selected by the Partnership
from outstanding Class D Partnership Preferred Units not previously called for
redemption by any method determined by the General Partner in its discretion.
Upon any such redemption, the General Partner shall amend Exhibit A to the
Agreement as appropriate to reflect such redemption.
6. STATUS OF REACQUIRED UNITS.
All Class D Partnership Preferred Units which shall have been issued
and reacquired in any manner by the Partnership shall be deemed cancelled.
7. RANKING.
Any class or series of Partnership Units of the Partnership shall be
deemed to rank:
(1) prior or senior to the Class D Partnership Preferred
Units, as to the payment of distributions and as to distributions of assets upon
liquidation, dissolution or winding up, if the holders of such class or series
shall be entitled to the receipt of distributions or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of Class D Partnership Preferred Units ("Senior
Partnership Units");
(2) on a parity with the Class D Partnership Preferred Units,
as to the payment of distributions and as to distribution of assets upon
liquidation, dissolution or winding up, whether or not the distribution rates,
distribution payment dates or redemption or liquidation prices per unit or other
denomination thereof be different from those of the Class D Partnership
Preferred Units if such Class or series of Partnership Units shall be Class B
Partnership Preferred Units, Class C Partnership Preferred Units or if the
holders of such class or series of Partnership Units and the Class D Partnership
Preferred Units shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up in proportion to their
respective amounts of accrued and unpaid distributions per unit or other
denomination or liquidation preferences, without preference or priority one over
the other ("Parity Partnership Units"); and
(3) junior to the Class D Partnership Preferred Units, as to
the payment of distributions or as to the distribution of assets upon
liquidation, dissolution or winding up, if such class or series of Partnership
Units shall be Partnership Common Units or if the holders of Class D Preferred
Partnership Units shall be entitled to receipt
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of distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of such
class or series of Partnership Units ("Junior Partnership Units").
8. SPECIAL ALLOCATIONS.
(1) Gross income and, if necessary, gain shall be allocated to
the holders of Class D Partnership Preferred Units for any Fiscal Year (and, if
necessary, subsequent Fiscal Years) to the extent that the holders of Class D
Partnership Preferred Units receive a distribution on any Class D Partnership
Preferred Units (other than an amount included in any redemption pursuant to
Section 5 hereof) with respect to such Fiscal Year.
(2) If any Class D Partnership Preferred Units are redeemed
pursuant to Section 5 hereof, for the Fiscal Year that includes such redemption
(and, if necessary, for subsequent Fiscal Years) (a) gross income and gain (in
such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class D Partnership Preferred
Units to the extent that the redemption amounts paid or payable with respect to
the Class D Partnership Preferred Units so redeemed exceeds the aggregate
Capital Contributions (net of liabilities assumed or taken subject to by the
Partnership) per Class D Partnership Preferred Unit allocable to the Class D
Partnership Preferred Units so redeemed and (b) deductions and losses (in such
relative proportions as the General Partner in its discretion shall determine)
shall be allocated to the holders of Class D Partnership Preferred Units to the
extent that the aggregate Capital Contributions (net of liabilities assumed or
taken subject to by the Partnership) per Class D Partnership Preferred Unit
allocable to the Class D Partnership Preferred Units so redeemed exceeds the
redemption amount paid or payable with respect to the Class D Partnership
Preferred Units so redeemed.
9. RESTRICTIONS ON OWNERSHIP.
The Class D Partnership Preferred Units shall be owned and held solely
by the General Partner or the Special Limited Partner.
10. GENERAL.
(1) The ownership of Class D Partnership Preferred Units may
(but need not, in the sole and absolute discretion of the General Partner) be
evidenced by one or more certificates. The General Partner shall amend Exhibit A
to the Agreement from time to time to the extent necessary to reflect accurately
the issuance of, and subsequent conversion, redemption, or any other event
having an effect on the ownership of, Class D Partnership Preferred Units.
(2) The rights of the General Partner and the Special Limited
Partner, in their capacity as holders of the Class D Partnership Preferred
Units, are in addition to and not in limitation of any other rights or authority
of the General Partner or the Special Limited Partner, respectively, in any
other capacity under the Agreement or applicable law. In addition, nothing
contained herein shall be deemed to limit or otherwise restrict the authority of
the General Partner or the Special Limited Partner under the Agreement, other
than in their capacity as holders of the Class D Partnership Preferred Units.
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EXHIBIT J
PARTNERSHIP UNIT DESIGNATION OF THE
CLASS E PARTNERSHIP PREFERRED UNITS
OF AIMCO PROPERTIES, L.P.
1. NUMBER OF UNITS AND DESIGNATION.
A class of Partnership Preferred Units is hereby designated as "Class E
Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be Ten Million (10,000,000).
2. DEFINITIONS.
For purposes of the Class E Partnership Preferred Units, the following
terms shall have the meanings indicated in this Section 2, and capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Agreement:
"Agreement" shall mean the Agreement of Limited Partnership of the
Partnership, as amended, supplemented or restated from time to time.
"Call Date" shall mean a date fixed for redemption of shares of Class E
Preferred Stock.
"Class E Partnership Preferred Unit" means a Partnership Preferred Unit
with the designations, preferences and relative, participating,
optional or other special rights, powers and duties as are set forth in
this Exhibit J. It is the intention of the General Partner that each
Class E Partnership Preferred Unit shall be substantially the economic
equivalent of one share of Class E Preferred Stock.
"Class E Preferred Stock" means the Class E Cumulative Convertible
Preferred Stock, par value $0.01 per share, of the Previous General
Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Distribution Payment Date" shall mean any date on which dividends are
paid on the Class E Preferred Stock.
"Issue Date" shall have the meaning set forth in the Articles
Supplementary relating to the Class E Preferred Stock.
"Junior Partnership Units" shall have the meaning set forth in
paragraph (c) of Section 7 of this Exhibit J.
"Parity Partnership Units" shall have the meaning set forth in
paragraph (b) of Section 7 of this Exhibit J.
"Partnership" shall mean AIMCO Properties, L.P., a Delaware limited
partnership.
"Senior Partnership Units" shall have the meaning set forth in
paragraph (a) of Section 7 of this Exhibit J.
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"Special Dividend" shall have the meaning set forth in the Articles
Supplementary relating to the Class E Preferred Stock.
3. DISTRIBUTIONS.
On every Distribution Payment Date, the holders of Class E
Partnership Preferred Units shall be entitled to receive distributions of the
type and in an amount per Class E Partnership Preferred Unit equal to the per
share dividend payable on the Class E Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record
of the Class E Partnership Preferred Units, as they appear on the records of the
Partnership at the close of business on the record date for the dividend payable
with respect to the Class E Preferred Stock on such Distribution Payment Date.
Holders of Class E Partnership Preferred Units shall not be entitled to any
distributions on the Class E Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.
4. LIQUIDATION PREFERENCE.
(1) In the event of any liquidation, dissolution or winding up
of the Partnership, whether voluntary or involuntary, before any payment or
distribution of the Partnership (whether capital, surplus or otherwise) shall be
made to or set apart for the holders of Junior Partnership Units, the holders of
Class E Partnership Preferred Units shall be entitled to receive One Dollar
($1.00) per Class E Partnership Preferred Unit (the "Liquidation Preference"),
plus an amount equal to the Special Dividend if such dividend is unpaid on the
date of final distribution to such holders. Until the holders of the Class E
Partnership Preferred Units have been paid the Liquidation Preference in full,
plus an amount equal to the Special Dividend if such dividend is unpaid on the
date of final distribution to such holders, no payment shall be made to any
holder of Junior Partnership Units upon the liquidation, dissolution or winding
up of the Partnership. If, upon any liquidation, dissolution or winding up of
the Partnership, the assets of the Partnership, or proceeds thereof,
distributable among the holders of Class E Partnership Preferred Units shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any Parity Partnership Units, then such assets, or the proceeds
thereof, shall be distributed among the holders of Class E Partnership Preferred
Units and any such Parity Partnership Units ratably in the same proportion as
the respective amounts that would be payable on such Class E Partnership
Preferred Units and any such other Parity Partnership Units if all amounts
payable thereon were paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Partnership with one or more partnerships, or
(ii) a sale or transfer of all or substantially all of the Partnership's assets
shall not be deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary, of the Partnership.
(2) Upon any liquidation, dissolution or winding up of the
Partnership, after payment shall have been made in full to the holders of Class
E Partnership Preferred Units and any Parity Partnership Units, as provided in
this Section 4, any other series or class or classes of Junior Partnership Units
shall, subject to the respective terms thereof, be entitled to receive any
assets remaining to be paid or distributed, and the holders of the Class E
Partnership Preferred Units shall be entitled to share therein on the same basis
as the holders of Partnership Common Units (on a per unit basis).
5. REDEMPTION.
Class E Partnership Preferred Units shall be redeemable by the
Partnership as follows:
(1) At any time that the Previous General Partner redeems all
or any of the shares of Class E Preferred Stock, the General Partner shall cause
the Partnership to redeem an equal number of Class E Partnership Preferred
Units, at a redemption price per Class E Partnership Preferred Unit equal to the
redemption price per share paid in respect of such redeemed shares of Class E
Preferred Stock, in the manner set forth herein; provided, however,
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that in the event of a redemption of Class E Partnership Preferred Units, if the
Call Date occurs after a dividend record date for the Class E Preferred Stock
and on or prior to the related Distribution Payment Date, the distribution
payable on such Distribution Payment Date in respect of such Class E Partnership
Preferred Units called for redemption shall be payable on such Distribution
Payment Date to the holders of record of such Class E Partnership Preferred
Units on the applicable dividend record date, and shall not be payable as part
of the redemption price for such Class E Partnership Preferred Units.
(2) If the Partnership shall redeem Class E Partnership
Preferred Units pursuant to paragraph (a) of this Section 5, from and after the
Call Date (unless the Partnership shall fail to make available the amount of
cash necessary to effect such redemption), (i) except for payment of the
redemption price, the Partnership shall not make any further distributions on
the Class E Partnership Preferred Units so called for redemption, (ii) said
units shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of Class E Partnership Preferred Units shall cease
except the rights to receive the cash payable upon such redemption, without
interest thereon; provided, however, that if a Call Date occurs after a dividend
record date for the Class E Preferred Stock and on or prior to the related
Distribution Payment Date, the full distribution payable on such Distribution
Payment Date in respect of such Class E Partnership Preferred Units called for
redemption shall be payable on such Distribution Payment Date to the holders of
record of such Class E Partnership Preferred Units on the applicable dividend
record date notwithstanding the prior redemption of such Class E Partnership
Preferred Units. No interest shall accrue for the benefit of the holders of
Class E Partnership Preferred Units to be redeemed on any cash set aside by the
Partnership.
If fewer than all the outstanding Class E Partnership Preferred Units
are to be redeemed, units to be redeemed shall be selected by the Partnership
from outstanding Class E Partnership Preferred Units not previously called for
redemption by any method determined by the General Partner in its discretion.
Upon any such redemption, the General Partner shall amend Exhibit A to the
Agreement as appropriate to reflect such redemption.
6. STATUS OF REACQUIRED UNITS.
All Class E Partnership Preferred Units which shall have been issued
and reacquired or redeemed in any manner by the Partnership shall be deemed
cancelled.
7. RANKING.
Any class or series of Partnership Units of the Partnership shall be
deemed to rank:
(1) prior or senior to the Class E Partnership Preferred
Units, as to the payment of distributions and as to distributions of assets upon
liquidation, dissolution or winding up, if (i) such class or series of
Partnership Units shall be Class B Partnership Preferred Units, Class C
Partnership Preferred Units, Class D Partnership Preferred Units, Class F
Partnership Preferred Units, Class G Partnership Preferred Units or Class H
Partnership Preferred Units, or (ii) the holders of such class or series shall
be entitled to the receipt of distributions and of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class E Partnership Preferred Units (the Partnership
Units referred to in clauses (i) and (ii) of this paragraph being hereinafter
referred to, collectively, as "Senior Partnership Units");
(2) on a parity with the Class E Partnership Preferred Units,
as to the payment of distributions and as to distribution of assets upon
liquidation, dissolution or winding up, whether or not the distribution rates,
distribution payment dates or redemption or liquidation prices per unit or other
denomination thereof be different from those of the Class E Partnership
Preferred Units if the holders of such class or series of Partnership Units and
the Class E Partnership Preferred Units shall be entitled to the receipt of
distributions and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
distributions per
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unit or other denomination or liquidation preferences, without preference or
priority one over the other ( "Parity Partnership Units"); and
(3) junior to the Class E Partnership Preferred Units, as to
the payment of distributions and as to the distribution of assets upon
liquidation, dissolution or winding up, if (i) such class or series of
Partnership Units shall be Partnership Common Units or Class I High Performance
Partnership Units or (ii) the holders of Class E Partnership Preferred Units
shall be entitled to receipt of distributions or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of such class or series of Partnership Units (the
Partnership Units referred to in clauses (i) and (ii) of this paragraph being
hereinafter referred to, collectively, as "Junior Partnership Units").
8. SPECIAL ALLOCATIONS.
(1) Gross income and, if necessary, gain shall be allocated to
the holders of Class E Partnership Preferred Units for any Fiscal Year (and, if
necessary, subsequent Fiscal Years) to the extent that the holders of Class E
Partnership Preferred Units receive a distribution on any Class E Partnership
Preferred Units (other than an amount included in any redemption pursuant to
Section 5 hereof) with respect to such Fiscal Year.
(2) If any Class E Partnership Preferred Units are redeemed
pursuant to Section 5 hereof, for the Fiscal Year that includes such redemption
(and, if necessary, for subsequent Fiscal Years) (a) gross income and gain (in
such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class E Partnership Preferred
Units to the extent that the redemption amounts paid or payable with respect to
the Class E Partnership Preferred Units so redeemed exceeds the aggregate
Capital Contributions (net of liabilities assumed or taken subject to by the
Partnership) per Class E Partnership Preferred Unit allocable to the Class E
Partnership Preferred Units so redeemed and (b) deductions and losses (in such
relative proportions as the General Partner in its discretion shall determine)
shall be allocated to the holders of Class E Partnership Preferred Units to the
extent that the aggregate Capital Contributions (net of liabilities assumed or
taken subject to by the Partnership) per Class E Partnership Preferred Unit
allocable to the Class E Partnership Preferred Units so redeemed exceeds the
redemption amount paid or payable with respect to the Class E Partnership
Preferred Units so redeemed.
9. CONVERSION.
Class E Partnership Preferred Units shall be convertible by the holders
thereof as follows:
(1) Upon any conversion of shares of Class E Preferred Stock
into shares of Common Stock, the General Partner shall cause a number of Class E
Partnership Preferred Units equal to the number of such converted shares of
Class E Preferred Stock to be converted by the holders thereof into Partnership
Common Units. The conversion ratio in effect from time to time for the
conversion of Class E Partnership Preferred Units into Partnership Common Units
pursuant to this Section 9 shall at all times be equal to, and shall be
automatically adjusted as necessary to reflect, the conversion ratio in effect
from time to time for the conversion of Class E Preferred Stock into Common
Stock.
(2) If the Previous General Partner shall after the Issue Date
(i) pay a dividend or make a distribution on the Class E Preferred Stock in
shares of Common Stock, (ii) subdivide its outstanding Class E Preferred Stock
into a greater number of shares, (iii) combine its outstanding Class E Preferred
Stock into a smaller number of shares, or (iv) issue any shares of capital stock
by reclassification of its outstanding Class E Preferred Stock, then the
Partnership shall contemporaneously do the same with respect to the Class E
Partnership Preferred Units. If the Previous General Partner shall after the
Issue Date issue rights, options or warrants to all holders of Class E Preferred
Stock entitling them to subscribe for or purchase Class E Preferred Stock, then
upon the subscription for or purchase of shares
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of Class E Preferred Stock pursuant thereto, the Previous General Partner shall
contribute the proceeds from such subscription or purchase to the Partnership in
exchange for a number of Partnership Preferred Units equal to the number of
shares of Class E Preferred Stock so subscribed for or purchased.
(3) Each conversion of Class E Partnership Preferred Units
into Partnership Common Units shall be deemed to have been effected at the same
time and date that the corresponding conversion of Class E Preferred Stock into
Common Stock is deemed to have been effected.
(4) The Partnership will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
Partnership Common Units upon conversion of Class E Partnership Preferred Units
pursuant hereto.
10. RESTRICTIONS ON OWNERSHIP.
The Class E Partnership Preferred Units shall be owned and held solely
by the General Partner or the Special Limited Partner.
11. GENERAL.
(1) The ownership of Class E Partnership Preferred Units may
(but need not, in the sole and absolute discretion of the General Partner) be
evidenced by one or more certificates. The General Partner shall amend Exhibit A
to the Agreement from time to time to the extent necessary to reflect accurately
the issuance of, and subsequent conversion, redemption, or any other event
having an effect on the ownership of, Class E Partnership Preferred Units.
(2) The rights of the General Partner and the Special Limited
Partner, in their capacity as holders of the Class E Partnership Preferred
Units, are in addition to and not in limitation of any other rights or authority
of the General Partner or the Special Limited Partner, respectively, in any
other capacity under the Agreement or applicable law. In addition, nothing
contained herein shall be deemed to limit or otherwise restrict the authority of
the General Partner or the Special Limited Partner under the Agreement, other
than in their capacity as holders of the Class E Partnership Preferred Units.
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EXHIBIT K
PARTNERSHIP UNIT DESIGNATION
OF THE
CLASS I HIGH PERFORMANCE PARTNERSHIP UNITS
OF AIMCO PROPERTIES, L.P.
1. NUMBER OF UNITS AND DESIGNATION.
A class of Partnership Units is hereby designated as "Class I High
Performance Partnership Units," and the number of Partnership Units initially
constituting such class shall be fifteen thousand (15,000), subject to
adjustment at the Class I High Performance Valuation Date, as provided in
Section 3 hereof.
2. DEFINITIONS.
For purposes of this Partnership Unit Designation, the following terms
shall have the meanings indicated in this Section 2. Capitalized terms used and
not otherwise defined herein shall have the meanings assigned thereto in the
Agreement.
"AIMCO Equity Capitalization" shall mean the quotient obtained by
dividing (i) the sum of the AIMCO Market Values for each trading day included in
the Measurement Period, by (ii) the number of trading days included in the
Measurement Period.
"AIMCO Market Value" shall mean, for any date, the product of (i) the
number of REIT Shares and Partnership Units (other than Partnership Preferred
Units) outstanding as of the close of business on such date, multiplied by (ii)
the Value of a REIT Share on such date.
"AIMCO Total Return" shall mean the Total Return of the REIT Shares for
the Measurement Period.
"Agreement" shall mean the Agreement of Limited Partnership of the
Partnership, as amended, supplemented or restated from time to time.
"Change of Control" shall mean the occurrence of any of the following
events:
(i) an acquisition (other than directly from the Previous
General Partner) of any voting securities of the Previous General Partner (the
"Voting Securities) by any "person" (as the term "person" is used for purposes
of Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) immediately after which such person has
"beneficial ownership" (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) ("Beneficial Ownership") of 20% or more of the combined voting
power of the Previous General Partner's then outstanding Voting Securities;
provided, however, in determining whether a Change in Control has occurred,
Voting Securities that are acquired in a Non-Control Acquisition (as hereinafter
defined) shall not constitute an acquisition that would cause a Change in
Control. "Non-Control Acquisition" shall mean an acquisition by (A) an employee
benefit plan (or a trust forming a part thereof) maintained by (1) the Previous
General Partner or (2) any corporation, partnership or other person of which a
majority of its voting power or its equity securities or equity interest is
owned directly or indirectly by the Previous General Partner or in which the
Previous General Partner serves as a general partner or manager (a
"Subsidiary"), (B) the Previous General Partner or any Subsidiary, or (C) any
person in connection with a Non-Control Transaction (as hereinafter defined);
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(ii) the individuals who constitute the Board of Directors of
the Previous General Partner as of January 1, 1998 (the "Incumbent Board") cease
for any reason to constitute at least two-thirds (2/3) of the Board of
Directors; provided, however, that if the election, or nomination for election
by the Previous General Partner's stockholders, of any new director was approved
by a vote of at least two-thirds (2/3) of the Incumbent Board, such new director
shall be considered as a member of the Incumbent Board; provided, further, that
no individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "election contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) (an "Election Contest") or other actual or threatened solicitation
of proxies or consents by or on behalf of a person other than the Board of
Directors (a "Proxy Contest") including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest; or
(iii) approval by stockholders of the Previous General Partner
of: (A) a merger, consolidation, share exchange or reorganization involving the
Previous General Partner, unless (1) the stockholders of the Previous General
Partner, immediately before such merger, consolidation, share exchange or
reorganization, own, directly or indirectly immediately following such merger,
consolidation, share exchange or reorganization, at least 80% of the combined
voting power of the outstanding voting securities of the corporation that is the
successor in such merger, consolidation, share exchange or reorganization (the
"Surviving Company") in substantially the same proportion as their ownership of
the Voting Securities immediately before such merger, consolidation, share
exchange or reorganization, (2) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing
for such merger, consolidation, share exchange or reorganization constitute at
least two-thirds (2/3) of the members of the board of directors of the Surviving
Company, and (3) no persons (other than the Previous General Partner or any
Subsidiary, any employee benefit plan (or any trust forming a part thereof)
maintained by the Previous General Partner, the Surviving Company or any
Subsidiary, or any person who, immediately prior to such merger, consolidation,
share exchange or reorganization had Beneficial Ownership of 15% or more of the
then outstanding Voting Securities has Beneficial Ownership of 15% or more of
the combined voting power of the Surviving Company's then outstanding voting
securities (a transaction described in clauses (1) through (3) is referred to
herein as a "Non-Control Transaction"); (B) a complete liquidation or
dissolution of the Previous General Partner; or (C) an agreement for the sale or
other disposition of all or substantially all of the assets of the Previous
General Partner to any person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur solely because any person (a "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the outstanding Voting Securities
as a result of the acquisition of Voting Securities by the Previous General
Partner that, by reducing the number of Voting Securities outstanding, increases
the proportional number of shares Beneficially Owned by such Subject Person,
provided that if a Change of Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Previous
General Partner, and after such share acquisition by the Previous General
Partner, such Subject Person becomes the Beneficial Owner of any additional
Voting Securities that increases the percentage of the then outstanding Voting
Securities Beneficially Owned by such Subject Person, then a Change of Control
shall occur.
"Class I High Performance Cash Amount" shall mean, as of any date, the
lesser of (i) an amount of cash equal to the product of the amount that a Holder
would receive in respect of each Class I High Performance Partnership Unit if
the Partnership sold all of its properties at their fair market value (which may
be determined by reference to the Value of a REIT Share), paid all of its debts
and distributed the remaining proceeds to the Partners as provided in Section
13.2 of the Agreement, determined as of the applicable Valuation Date, or (ii)
in the case of a Declination followed by a Public Offering Funding, the Public
Offering Funding Amount.
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"Class I High Performance Partnership Unit" shall mean a Partnership
Unit with the designations, preferences and relative, participating, optional or
other special rights, powers and duties as are set forth in this Exhibit K.
"Class I High Performance Valuation Date" shall mean the earlier to
occur of (i) January 1, 2001, or (ii) the date on which a Change of Control
occurs.
"Determination Date" shall mean (i) when used with respect to any
dividend or other distribution, the date fixed for the determination of the
holders of the securities entitled to receive such dividend or distribution, or,
if a dividend or distribution is paid or made without fixing such a date, the
date of such dividend or distribution, and (ii) when used with respect to any
split, subdivision, reverse stock split, combination or reclassification of
securities, the date upon which such split, subdivision, reverse stock split,
combination or reclassification becomes effective.
"Excess Return" shall mean the amount (measured as a percentage), if
any, by which (i) the AIMCO Total Return exceeds (ii) the Hurdle Rate of Return.
"Ex-Date" shall mean (i) when used with respect to any dividend or
distribution, the first date on which the securities on which the dividend or
distribution is payable trade regular way on the relevant exchange or in the
relevant market without the right to receive such dividend or distribution, and
(ii) when used with respect to any split, subdivision, reverse stock split,
combination or reclassification of securities, the first date on which the
securities trade regular way on such exchange or in such market to reflect such
split, subdivision, reverse stock split, combination or reclassification
becoming effective.
"Extraordinary Distribution" shall mean the distribution by the
Previous General Partner, by dividend or otherwise, to all holders of its REIT
Shares of evidences of its indebtedness or assets (including securities) other
than cash.
"Hurdle Rate of Return" shall mean the greater of (x) 115% of the
Industry Total Return, or (y) 30% (or, if the Class I High Performance Valuation
Date is not January 1, 2001, a percentage equal to the return over the
Measurement Period that, if compounded annually over three years, would result
in a cumulative return of 30%).
"Industry Total Return" shall mean the Total Return of the securities
included in the Industry Peer Group Index for the Measurement Period, with such
average determined in a manner consistent with the manner in which such index is
calculated; provided, however, that if such Total Return would be less than zero
without giving effect to the reinvestment of dividends, then the "Industry Total
Return" shall be equal to zero.
"Industry Peer Group Index" shall mean the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ Index or
any other similar industry index approved by the Board of Directors of the
Previous General Partner.
"Measurement Period" shall mean the period from and including January
1, 1998 to but excluding the Class I High Performance Valuation Date.
"Partnership" shall mean AIMCO Properties, L.P., a Delaware limited
partnership.
"Total Return" shall mean, for any security and for any period, the
cumulative total return for such security over such period, as measured by (i)
the sum of (A) the cumulative amount of dividends paid in respect of such
security for such period (assuming that all dividends other than Extraordinary
Distributions are reinvested in such security as of the payment date for such
dividend based on the security price on the dividend payment date), and (B) an
amount equal to (1) the security price at the end of such period, minus (2) the
security price at the beginning of
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such period, divided by (ii) the security price at the beginning of the
measurement period; provided, however, that if the foregoing calculation results
in a negative number, the "Total Return" shall be equal to zero.
"Value" shall have the meaning set forth in the Agreement, except that
Value shall be determined by reference to the average of the daily market prices
for twenty (20) consecutive trading days rather than ten (10) consecutive
trading days.
3. ADJUSTMENT OF UNITS AT CLASS I HIGH PERFORMANCE VALUATION
DATE.
(a) If, on the Class I High Performance Valuation Date there
is any Excess Return, then, from and after such date, each Class I High
Performance Partnership Unit shall, without any action on the part of the
Partnership, the General Partner or the Holder thereof, be automatically
adjusted to equal a number of Class I High Performance Partnership Units equal
to the quotient obtained by dividing (x) the product of (A) 15% of the Excess
Return, multiplied by (B) the AIMCO Equity Capitalization, by (y) the product of
(A) 15,000 and (B) the Value of a REIT Share on the Class I High Performance
Valuation Date. For illustrative purposes, examples of the calculation of such
adjustment are set forth in Annex I hereto.
(b) If, on the Class I High Performance Valuation Date there
is no Excess Return, then, from and after such date, each Class I High
Performance Partnership Units shall, without any action on the part of the
Partnership, the General Partner or the Holder thereof, be automatically
adjusted to equal 1/100 of a Class I High Performance Partnership Unit.
4. DISTRIBUTIONS.
On and after the Class I High Performance Valuation Date, the Holders
of Class I High Performance Partnership Units shall be entitled to receive
distributions (other than distributions upon liquidation) if, as, when and in
the same amounts and of the same type as may be paid to Holders of Partnership
Common Units as if each Holder of Class I High Performance Partnership Units
held an equal number of Partnership Common Units originally issued on the Class
I High Performance Valuation Date.
5. ALLOCATIONS.
(a) From and after the Class I High Performance Valuation
Date, Net Income and Net Loss shall be allocated to each of the Holders of Class
I High Performance Partnership Units as if each such Holder was the Holder of an
equal number of Partnership Common Units originally issued on the Class I High
Performance Valuation Date.
(b) In the event that the Partnership disposes of all or
substantially all of its assets in a transaction that will lead to a liquidation
of the Partnership pursuant to Article XIII of the Agreement, then,
notwithstanding Section 6.3.C of the Agreement, each Holder of Class I High
Performance Partnership Units shall be specifically allocated items of
Partnership income and gain in an amount sufficient to cause the Capital Account
of such Holder to be equal to that of a Holder of an equal number of Partnership
Common Units.
6. REDEMPTION.
Upon the occurrence of a Change of Control, and subject to the
applicable requirements of Federal securities laws and any securities exchange
or quotation system rules or regulations, each Holder of Class I High
Performance Partnership Units shall have the redemption rights of Qualifying
Parties set forth in Section 8.6 of the Agreement, except that (i) all
references therein to "Redeemable Units" or "Partnership Common Units" shall be
deemed to be
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references to Class I High Performance Partnership Units, (ii) the first
Twelve-Month Period applicable to all Class I High Performance Partnership Units
shall be deemed to have passed, (iii) all references therein to "Cash Amount"
shall be deemed to be references to the Class I High Performance Cash Amount,
and (iv) in the event that the Previous General Partner elects to acquire Class
I High Performance Partnership Units that have been tendered for Redemption, the
Previous General Partner shall acquire each such Class I High Performance
Partnership Unit in exchange for a number of REIT Shares equal to the quotient
obtained by dividing the Class I High Performance Cash Amount by the Value of a
REIT Share, determined as of the applicable Valuation Date.
7. STATUS OF REACQUIRED UNITS.
All Class I High Performance Partnership Units which shall have been
issued and reacquired in any manner by the Partnership shall be deemed cancelled
and no longer outstanding.
8. RESTRICTIONS ON OWNERSHIP AND TRANSFER.
The restrictions on Transfer set forth in Sections 11.1.B and 11.3.A of
the Agreement shall not apply to Transfers of Class I High Performance
Partnership Units. Prior to the Class I High Performance Valuation Date, the
Class I High Performance Partnership Units shall be owned and held solely by SMP
I, L.L.C., a Delaware limited liability company ("SMP"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇. On or after the Class I High
Performance Valuation Date, the Class I High Performance Partnership Units may
be Transferred (i) by SMP to (a) any Person who is a member (a "Member") of SMP
immediately prior to such transfer, (b) a Family Member of a Member, (c) a
Controlled Entity of a Member, (c) any Person with respect to whom the Member
constitutes a Controlled Entity, (d) upon the death of a Member, by will or by
the laws of descent and distribution to any Qualified Transferee, and (ii) by
any other Person to (a) a Family Member of a such Person, (b) a Controlled
Entity of such Person, (c) any other Person with respect to whom such Person
constitutes a Controlled Entity, (d) upon the death of such Person, by will or
by the laws of descent and distribution to any Qualified Transferee,
9. ADJUSTMENTS.
(a) In the event of any Extraordinary Distribution occurring on or
after January 1, 1998, for purposes of determining the Value of a REIT Share or
the AIMCO Total Return, each price of a REIT Share determined as of a date on or
after the Ex-Date for such Extraordinary Distribution shall be adjusted by
multiplying such price by a fraction (i) the numerator of which shall be the
price of a REIT Share on the date immediately prior to such Ex-Date, and (ii)
the denominator of which shall be (A) the price of a REIT Share on the date
immediately prior to such Ex-Date, minus (B) the fair market value on the date
fixed for such determination of the portion of the evidences of indebtedness or
assets so distributed applicable to one REIT Share (as determined by the General
Partner, whose determination shall be conclusive); provided further, that such
amount shall be so adjusted for each such Extraordinary Distribution occurring
on or after January 1, 1998.
(b) In the event that, on or after January 1, 1998, the Previous
General Partner (i) 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, (ii) splits or subdivides its outstanding REIT Shares,
(iii) effects a reverse stock split or otherwise combines its outstanding REIT
Shares into a smaller number of REIT Shares, or (iv) otherwise reclassifies its
outstanding REIT Shares, then, for purposes of determining the Value of a REIT
Share or the AIMCO Total Return, each price of a REIT Share determined as of a
date on or after the Ex-Date for such transaction shall be adjusted by
multiplying such price by a fraction (x) the numerator of which shall be the
number of REIT Shares issued and outstanding on the Determination Date for such
dividend, distribution, split, subdivision, reverse stock split, combination or
reclassification (assuming for such purposes that such dividend, distribution,
split, subdivision, reverse
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split or combination has occurred as of such time) and (y) the denominator of
which shall be the actual number of REIT Shares (determined without the above
assumption) issued and outstanding on the Determination Date for such dividend,
distribution, split, subdivision, reverse stock split, combination or
reclassification.
(c) The General Partner shall have authority to appropriately adjust
the AIMCO Market Value, the AIMCO Total Return or the Value of a REIT Share if
any other transaction or circumstance occurs or arises that would have an
inequitable result.
10. GENERAL.
The ownership of Class I High Performance Partnership Units may (but
need not, in the sole and absolute discretion of the General Partner) be
evidenced by one or more certificates. The General Partner shall amend Exhibit A
to the Agreement from time to time to the extent necessary to reflect accurately
the issuance of, and subsequent conversion, redemption, or any other event
having an effect on the ownership of, Class I High Performance Partnership
Units.
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ANNEX I TO
EXHIBIT K
Numerical Examples of the Calculation of the Adjustment to the Number of
Class I High Performance Partnership
Units on the Class I High Performance Valuation Date
The following table illustrates the adjustment that would be made on
the Class I High Performance Valuation Date to the number of Class I High
Performance Units under different circumstances. Except as otherwise indicated,
it is assumed, for purposes of the illustration, that: (i) the Class I High
Performance Valuation Date is January 1, 2001; (ii) the AIMCO Total Return is
14% per year; (iii) the Industry Total Return is 10% per year; and (iv) the
weighted average market value of outstanding equity (Common Stock and
Partnership Units, other than Partnership Preferred Units) during the
Measurement Period is $3,000,000,000 (assumptions (i) - (iv) are referred to as
the "Base Case").
(1) (2) (3) (4) (5) (6)
---------- ---------- ------- ---------- ------------ -------
Cumulative Total Return Over Three Years:
Company Common Stock 48.2% 119.7% 48.2% 48.2% 119.7% 26.0%
Peer Group Index 32.4% 32.4% 71.2% 0% 32.4% 3.0%
115% of Peer Group Index 38.1% 38.1% 83.7% 0% 38.1% 3.5%
Minimum Return 30% 30% 30% 30% 30% 30%
Excess Return 10.1% 81.6% 0% 18.2% 81.6% 0%
Weighted Average Market Value of $ 3,000 $ 4,000 $ 3,000 $ 3,000 $ 10,000 $ 4,000
Outstanding Equity (millions)
Excess Shareholder Return (millions) $ 303 $ 3,264 $ 0 $ 546 $ 8,160 $ 0
Value of High Performance Units (millions) $ 45.4 $ 489.6 $ 0 $ 81.9 $ 1,224.0 $ 0
Value of a REIT Share $ 50 $ 70 $ 50 $ 50 $ 70 $ 40
Adjusted Number of Class I High Performance Units:
Total 908,000 6,994,286 0 1,638,000 17,485,714 0
Per Unit Adjustment 60.5 466.3 0 109.2 1,165.7 0
(1) Base Case.
(2) Base Case, except that the Company Common Stock has a 30% annual Total
Return and the weighted average market value of outstanding equity is
$4 billion.
(3) Base Case, except that the Peer Group Index has a 20% annual Total
Return.
(4) Base Case, except that the Peer Group Index has a negative annual Total
Return of 10%.
(5) Base Case, except that the Company Common Stock has a 30% annual Total
Return and the weighted average market value of outstanding equity is
$10 billion.
(6) Base Case, except that the Company Common Stock has an 8% annual Total
Return, the Peer Group Index has a 1% annual Total Return and the
weighted average market value of outstanding equity is $4 billion.
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EXHIBIT L
PARTNERSHIP UNIT DESIGNATION OF THE
CLASS G PARTNERSHIP PREFERRED UNITS
OF AIMCO PROPERTIES, L.P.
1. NUMBER OF UNITS AND DESIGNATION.
A class of Partnership Preferred Units is hereby designated as "Class G
Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be Four Million Fifty Thousand (4,050,000).
2. DEFINITIONS.
For purposes of the Class G Partnership Preferred Units, the following
terms shall have the meanings indicated in this Section 2. Capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Agreement.
"Agreement" shall mean the Agreement of Limited Partnership of the
Partnership, as amended, supplemented or restated from time to time.
"Call Date" shall have the meaning set forth in paragraph (a) of
Section 5 of this Exhibit L.
"Class G Partnership Preferred Unit" means a Partnership Preferred Unit
with the designations, preferences and relative, participating,
optional or other special rights, powers and duties as are set forth in
this Exhibit L. It is the intention of the General Partner that each
Class G Partnership Preferred Unit shall be substantially the economic
equivalent of one share of Class G Preferred Stock.
"Class G Preferred Stock" means the Class G Cumulative Preferred Stock,
par value $0.01 per share, of the Previous General Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Previous General Partner or such shares of the Previous
General Partner's capital stock into which outstanding shares of Common
Stock shall be reclassified.
"Distribution Payment Date" shall mean any date on which cash dividends
are paid on the Class G Preferred Stock.
"Junior Partnership Units" shall have the meaning set forth in
paragraph (c) of Section 7 of this Exhibit L.
"Parity Partnership Units" shall have the meaning set forth in
paragraph (b) of Section 7 of this Exhibit L.
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"Partnership" shall mean AIMCO Properties, L.P., a Delaware limited
partnership.
"Senior Partnership Units" shall have the meaning set forth in
paragraph (a) of Section 7 of this Exhibit L.
3. DISTRIBUTIONS.
On every Distribution Payment Date, the holders of Class G
Partnership Preferred Units shall be entitled to receive distributions payable
in cash in an amount per Class G Partnership Preferred Unit equal to the per
share dividend payable on the Class G Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record
of the Class G Partnership Preferred Units, as they appear on the records of the
Partnership at the close of business on the record date for the dividend payable
with respect to the Class G Preferred Stock on such Distribution Payment Date.
Holders of Class G Partnership Preferred Units shall not be entitled to any
distributions on the Class G Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.
4. LIQUIDATION PREFERENCE.
(1) In the event of any liquidation, dissolution or winding up
of the Partnership, whether voluntary or involuntary, before any payment or
distribution of the Partnership (whether capital or surplus) shall be made to or
set apart for the holders of Junior Partnership Units, the holders of Class G
Partnership Preferred Units shall be entitled to receive Twenty Five Dollars
($25) per Class G Partnership Preferred Unit (the "Liquidation Preference"),
plus an amount equal to all dividends (whether or not earned) accumulated,
accrued and unpaid on each share of Class G Preferred Stock to the date of final
distribution to such holders; but such holders shall not be entitled to any
further payment. Until the holders of the Class G Partnership Preferred Units
have been paid the Liquidation Preference in full, plus an amount equal to all
dividends (whether or not earned) accumulated, accrued and unpaid on the Class G
Preferred Stock to the date of final distribution to such holders, no payment
will be made to any holder of Junior Partnership Units upon the liquidation,
dissolution or winding up of the Partnership. If, upon any liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership, or
proceeds thereof, distributable among the holders of Class G Partnership
Preferred Units shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any Parity Partnership Units, then such
assets, or the proceeds thereof, shall be distributed among the holders of Class
G Partnership Preferred Units and any such Parity Partnership Units ratably in
the same proportion as the respective amounts that would be payable on such
Class G Partnership Preferred Units and any such other Parity Partnership Units
if all amounts payable thereon were paid in full. For the purposes of this
Section 4, (i) a consolidation or merger of the Partnership with one or more
partnerships, or (ii) a sale or transfer of all or substantially all of the
Partnership's assets shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Partnership.
(2) Upon any liquidation, dissolution or winding up of the
Partnership, after payment shall have been made in full to the holders of Class
G Partnership Preferred Units and any Parity Partnership Units, as provided in
this Section 4, any other series or class or classes of Junior Partnership Units
shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class G
Partnership Preferred Units and any Parity Partnership Units shall not be
entitled to share therein.
5. REDEMPTION.
Class G Partnership Preferred Units shall be redeemable by the
Partnership as follows:
(1) At any time that the Previous General Partner exercises
its right to redeem all or any of the shares of Class G Preferred Stock, the
General Partner may cause the Partnership to redeem an equal number of
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Class G Partnership Preferred Units, at a redemption price payable in cash equal
to 100% of the Liquidation Preference thereof, plus an amount equal to all
accrued and unpaid dividends on each share of Class G Preferred Stock to the
date fixed for redemption (the "Call Date"), in the manner set forth herein.
(2) If the Partnership shall redeem Class G Partnership
Preferred Units pursuant to paragraph (a) of this Section 5, from and after the
Call Date (unless the Partnership shall fail to make available the amount of
cash necessary to effect such redemption), (i) except for payment of the
redemption price, the Partnership shall not make any further distributions on
the Class G Partnership Preferred Units so called for redemption (except that,
in the case of a Call Date after a distribution record date and prior to the
related Distribution Payment Date, holders of Class G Partnership Preferred
Units on the distribution record date will be entitled on such Distribution
Payment Date to receive the distribution payable thereon), (ii) said units shall
no longer be deemed to be outstanding, and (iii) all rights of the holders
thereof as holders of Class G Partnership Preferred Units of the Partnership
shall cease (except the rights to receive the cash payable upon such redemption,
without interest thereon, and to receive any distributions payable thereon). No
interest shall accrue for the benefit of the holders of Class G Partnership
Preferred Units to be redeemed on any cash set aside by the Partnership.
If fewer than all the outstanding Class G Partnership Preferred Units
are to be redeemed, units to be redeemed shall be selected by the Partnership
from outstanding Class G Partnership Preferred Units not previously called for
redemption by any method determined by the General Partner in its discretion.
Upon any such redemption, the General Partner shall amend Exhibit A to the
Agreement as appropriate to reflect such redemption.
6. STATUS OF REACQUIRED UNITS.
All Class G Partnership Preferred Units which shall have been issued
and reacquired in any manner by the Partnership shall be deemed cancelled.
7. RANKING.
Any class or series of Partnership Units of the Partnership shall be
deemed to rank:
(1) prior or senior to the Class G Partnership Preferred
Units, as to the payment of distributions and as to distributions of assets upon
liquidation, dissolution or winding up, if the holders of such class or series
shall be entitled to the receipt of distributions or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of Class G Partnership Preferred Units ("Senior
Partnership Units");
(2) on a parity with the Class G Partnership Preferred Units,
as to the payment of distributions and as to distribution of assets upon
liquidation, dissolution or winding up, whether or not the distribution rates,
distribution payment dates or redemption or liquidation prices per unit or other
denomination thereof be different from those of the Class G Partnership
Preferred Units if such Class or series of Partnership Units shall be Class B
Preferred Partnership Units or if the holders of such class or series of
Partnership Units and the Class G Partnership Preferred Units shall be entitled
to the receipt of distributions and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of accrued
and unpaid distributions per unit or other denomination or liquidation
preferences, without preference or priority one over the other ("Parity
Partnership Units"); and
(3) junior to the Class G Partnership Preferred Units, as to
the payment of distributions or as to the distribution of assets upon
liquidation, dissolution or winding up, if such class or series of Partnership
Units shall be Partnership Common Units or if the holders of Class G Preferred
Partnership Units shall be entitled to receipt
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of distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of such
class or series of Partnership Units ("Junior Partnership Units").
8. SPECIAL ALLOCATIONS.
(1) Gross income and, if necessary, gain shall be allocated to
the holders of Class G Partnership Preferred Units for any Fiscal Year (and, if
necessary, subsequent Fiscal Years) to the extent that the holders of Class G
Partnership Preferred Units receive a distribution on any Class G Partnership
Preferred Units (other than an amount included in any redemption pursuant to
Section 5 hereof) with respect to such Fiscal Year.
(2) If any Class G Partnership Preferred Units are redeemed
pursuant to Section 5 hereof, for the Fiscal Year that includes such redemption
(and, if necessary, for subsequent Fiscal Years) (a) gross income and gain (in
such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class G Partnership Preferred
Units to the extent that the redemption amounts paid or payable with respect to
the Class G Partnership Preferred Units so redeemed exceeds the aggregate
Capital Contributions (net of liabilities assumed or taken subject to by the
Partnership) per Class G Partnership Preferred Unit allocable to the Class G
Partnership Preferred Units so redeemed and (b) deductions and losses (in such
relative proportions as the General Partner in its discretion shall determine)
shall be allocated to the holders of Class G Partnership Preferred Units to the
extent that the aggregate Capital Contributions (net of liabilities assumed or
taken subject to by the Partnership) per Class G Partnership Preferred Unit
allocable to the Class G Partnership Preferred Units so redeemed exceeds the
redemption amount paid or payable with respect to the Class G Partnership
Preferred Units so redeemed.
9. RESTRICTIONS ON OWNERSHIP.
The Class G Partnership Preferred Units shall be owned and held solely
by the General Partner or the Special Limited Partner.
10. GENERAL.
(1) The ownership of Class G Partnership Preferred Units may
(but need not, in the sole and absolute discretion of the General Partner) be
evidenced by one or more certificates. The General Partner shall amend Exhibit A
to the Agreement from time to time to the extent necessary to reflect accurately
the issuance of, and subsequent conversion, redemption, or any other event
having an effect on the ownership of, Class G Partnership Preferred Units.
(2) The rights of the General Partner and the Special Limited
Partner, in their capacity as holders of the Class G Partnership Preferred
Units, are in addition to and not in limitation of any other rights or authority
of the General Partner or the Special Limited Partner, respectively, in any
other capacity under the Agreement or applicable law. In addition, nothing
contained herein shall be deemed to limit or otherwise restrict the authority of
the General Partner or the Special Limited Partner under the Agreement, other
than in their capacity as holders of the Class G Partnership Preferred Units.
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EXHIBIT M
PARTNERSHIP UNIT DESIGNATION OF THE
CLASS H PARTNERSHIP PREFERRED UNITS
OF AIMCO PROPERTIES, L.P.
1. NUMBER OF UNITS AND DESIGNATION.
A class of Partnership Preferred Units is hereby designated as "Class H
Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be Two Million Three Hundred Thousand (2,300,000).
2. DEFINITIONS.
For purposes of the Class H Partnership Preferred Units, the following
terms shall have the meanings indicated in this Section 2, and capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Agreement:
"Agreement" shall mean the Agreement of Limited Partnership of the
Partnership, as amended, supplemented or restated from time to time.
"Call Date" shall have the meaning set forth in paragraph (a) of
Section 5 of this Exhibit M.
"Class H Partnership Preferred Unit" means a Partnership Preferred Unit
with the designations, preferences and relative, participating,
optional or other special rights, powers and duties as are set forth in
this Exhibit M. It is the intention of the General Partner that each
Class H Partnership Preferred Unit shall be substantially the economic
equivalent of one share of Class H Preferred Stock.
"Class H Preferred Stock" means the Class H Cumulative Preferred Stock,
par value $0.01 per share, of the Previous General Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Distribution Payment Date" shall mean any date on which cash dividends
are paid on the Class H Preferred Stock.
"Junior Partnership Units" shall have the meaning set forth in
paragraph (c) of Section 7 of this Exhibit M.
"Parity Partnership Units" shall have the meaning set forth in
paragraph (b) of Section 7 of this Exhibit M.
"Partnership" shall mean AIMCO Properties, L.P., a Delaware limited
partnership.
"Senior Partnership Units" shall have the meaning set forth in
paragraph (a) of Section 7 of this Exhibit M.
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3. DISTRIBUTIONS.
On every Distribution Payment Date, the holders of Class H
Partnership Preferred Units shall be entitled to receive distributions payable
in cash in an amount per Class H Partnership Preferred Unit equal to the per
share dividend payable on the Class H Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record
of the Class H Partnership Preferred Units, as they appear on the records of the
Partnership at the close of business on the record date for the dividend payable
with respect to the Class H Preferred Stock on such Distribution Payment Date.
Holders of Class H Partnership Preferred Units shall not be entitled to any
distributions on the Class H Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.
4. LIQUIDATION PREFERENCE.
(1) In the event of any liquidation, dissolution or winding up
of the Partnership, whether voluntary or involuntary, before any payment or
distribution of the Partnership (whether capital, surplus or otherwise) shall be
made to or set apart for the holders of Junior Partnership Units, the holders of
Class H Partnership Preferred Units shall be entitled to receive Twenty Five
Dollars ($25) per Class H Partnership Preferred Unit (the "Liquidation
Preference"), plus an amount per Class H Partnership Preferred Unit equal to all
dividends (whether or not declared or earned) accumulated, accrued and unpaid on
one share of Class H Preferred Stock to the date of final distribution to such
holders; but such holders shall not be entitled to any further payment. Until
the holders of the Class H Partnership Preferred Units have been paid the
Liquidation Preference in full, plus an amount equal to all dividends (whether
or not declared or earned) accumulated, accrued and unpaid on the Class H
Preferred Stock to the date of final distribution to such holders, no payment
shall be made to any holder of Junior Partnership Units upon the liquidation,
dissolution or winding up of the Partnership. If, upon any liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership, or
proceeds thereof, distributable among the holders of Class H Partnership
Preferred Units shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any Parity Partnership Units, then such
assets, or the proceeds thereof, shall be distributed among the holders of Class
H Partnership Preferred Units and any such Parity Partnership Units ratably in
the same proportion as the respective amounts that would be payable on such
Class H Partnership Preferred Units and any such other Parity Partnership Units
if all amounts payable thereon were paid in full. For the purposes of this
Section 4, (i) a consolidation or merger of the Partnership with one or more
partnerships, or (ii) a sale or transfer of all or substantially all of the
Partnership's assets shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Partnership.
(2) Upon any liquidation, dissolution or winding up of the
Partnership, after payment shall have been made in full to the holders of Class
H Partnership Preferred Units and any Parity Partnership Units, as provided in
this Section 4, any other series or class or classes of Junior Partnership Units
shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class H
Partnership Preferred Units and any Parity Partnership Units shall not be
entitled to share therein.
5. REDEMPTION.
Class H Partnership Preferred Units shall be redeemable by the
Partnership as follows:
(1) At any time that the Previous General Partner exercises
its right to redeem all or any of the shares of Class H Preferred Stock, the
General Partner may cause the Partnership to redeem an equal number of Class H
Partnership Preferred Units, at a redemption price per Class H Partnership
Preferred Unit payable in cash equal to 100% of the Liquidation Preference per
share of Class H Preferred Stock, plus an amount equal to all accumulated,
accrued and unpaid dividends on one share of Class H Preferred Stock to the date
fixed for redemption (the "Call Date"), in the manner set forth herein;
provided, however, that in the event of a redemption of Class H
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Partnership Preferred Units, if the Call Date occurs after a dividend record
date for the Class H Preferred Stock and on or prior to the related Distribution
Payment Date, the distribution payable on such Distribution Payment Date in
respect of such Class H Partnership Preferred Units called for redemption shall
be payable on such Distribution Payment Date to the holders of record of such
Class H Partnership Preferred Units on the applicable dividend record date, and
shall not be payable as part of the redemption price for such Class H
Partnership Preferred Units.
(2) If the Partnership shall redeem Class H Partnership
Preferred Units pursuant to paragraph (a) of this Section 5, from and after the
Call Date (unless the Partnership shall fail to make available the amount of
cash necessary to effect such redemption), (i) except for payment of the
redemption price, the Partnership shall not make any further distributions on
the Class H Partnership Preferred Units so called for redemption, (ii) said
units shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of Class H Partnership Preferred Units of the
Partnership shall cease except the rights to receive the cash payable upon such
redemption, without interest thereon; provided, however, that if a Call Date
occurs after a dividend record date for the Class H Preferred Stock and on or
prior to the related Distribution Payment Date, the full distribution payable on
such Distribution Payment Date in respect of such Class H Partnership Preferred
Units called for redemption shall be payable on such Distribution Payment Date
to the holders of record of such Class H Partnership Preferred Units on the
applicable dividend record date notwithstanding the prior redemption of such
Class H Partnership Preferred Units. No interest shall accrue for the benefit of
the holders of Class H Partnership Preferred Units to be redeemed on any cash
set aside by the Partnership.
If fewer than all the outstanding Class H Partnership Preferred Units
are to be redeemed, units to be redeemed shall be selected by the Partnership
from outstanding Class H Partnership Preferred Units not previously called for
redemption by any method determined by the General Partner in its discretion.
Upon any such redemption, the General Partner shall amend Exhibit A to the
Agreement as appropriate to reflect such redemption.
6. STATUS OF REACQUIRED UNITS.
All Class H Partnership Preferred Units which shall have been issued
and reacquired in any manner by the Partnership shall be deemed cancelled.
7. RANKING.
Any class or series of Partnership Units of the Partnership shall be
deemed to rank:
(1) prior or senior to the Class H Partnership Preferred
Units, as to the payment of distributions and as to distributions of assets upon
liquidation, dissolution or winding up, if the holders of such class or series
shall be entitled to the receipt of distributions and of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of Class H Partnership Preferred Units ("Senior
Partnership Units");
(2) on a parity with the Class H Partnership Preferred Units,
as to the payment of distributions and as to distribution of assets upon
liquidation, dissolution or winding up, whether or not the distribution rates,
distribution payment dates or redemption or liquidation prices per unit or other
denomination thereof be different from those of the Class H Partnership
Preferred Units if (i) such class or series of Partnership Units shall be Class
B Partnership Preferred Units, Class C Partnership Preferred Units, Class D
Partnership Preferred Units or Class G Partnership Preferred Units or (ii) the
holders of such class or series of Partnership Units and the Class H Partnership
Preferred Units shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up in proportion to their
respective amounts of accrued and unpaid distributions per unit or other
denomination or liquidation preferences, without preference or priority one over
the other (the Partnership Units referred to in clauses (i) and (ii) of this
paragraph being hereinafter referred to, collectively, as "Parity Partnership
Units"); and
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(3) junior to the Class H Partnership Preferred Units, as to
the payment of distributions and as to the distribution of assets upon
liquidation, dissolution or winding up, if (i) such class or series of
Partnership Units shall be Partnership Common Units or Class I High Performance
Partnership Units or (ii) the holders of Class H Partnership Preferred Units
shall be entitled to receipt of distributions or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of such class or series of Partnership Units (the
Partnership Units referred to in clauses (i) and (ii) of this paragraph being
hereinafter referred to, collectively, as "Junior Partnership Units").
8. SPECIAL ALLOCATIONS.
(1) Gross income and, if necessary, gain shall be allocated to
the holders of Class H Partnership Preferred Units for any Fiscal Year (and, if
necessary, subsequent Fiscal Years) to the extent that the holders of Class H
Partnership Preferred Units receive a distribution on any Class H Partnership
Preferred Units (other than an amount included in any redemption pursuant to
Section 5 hereof) with respect to such Fiscal Year.
(2) If any Class H Partnership Preferred Units are redeemed
pursuant to Section 5 hereof, for the Fiscal Year that includes such redemption
(and, if necessary, for subsequent Fiscal Years) (a) gross income and gain (in
such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class H Partnership Preferred
Units to the extent that the redemption amounts paid or payable with respect to
the Class H Partnership Preferred Units so redeemed exceeds the aggregate
Capital Contributions (net of liabilities assumed or taken subject to by the
Partnership) per Class H Partnership Preferred Unit allocable to the Class H
Partnership Preferred Units so redeemed and (b) deductions and losses (in such
relative proportions as the General Partner in its discretion shall determine)
shall be allocated to the holders of Class H Partnership Preferred Units to the
extent that the aggregate Capital Contributions (net of liabilities assumed or
taken subject to by the Partnership) per Class H Partnership Preferred Unit
allocable to the Class H Partnership Preferred Units so redeemed exceeds the
redemption amount paid or payable with respect to the Class H Partnership
Preferred Units so redeemed.
9. RESTRICTIONS ON OWNERSHIP.
The Class H Partnership Preferred Units shall be owned and held solely
by the General Partner or the Special Limited Partner.
10. GENERAL.
(1) The ownership of Class H Partnership Preferred Units may
(but need not, in the sole and absolute discretion of the General Partner) be
evidenced by one or more certificates. The General Partner shall amend Exhibit A
to the Agreement from time to time to the extent necessary to reflect accurately
the issuance of, and subsequent conversion, redemption, or any other event
having an effect on the ownership of, Class H Partnership Preferred Units.
(2) The rights of the General Partner and the Special Limited
Partner, in their capacity as holders of the Class H Partnership Preferred
Units, are in addition to and not in limitation of any other rights or authority
of the General Partner or the Special Limited Partner, respectively, in any
other capacity under the Agreement or applicable law. In addition, nothing
contained herein shall be deemed to limit or otherwise restrict the authority of
the General Partner or the Special Limited Partner under the Agreement, other
than in their capacity as holders of the Class H
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