1
EXHIBIT 10.3
FIFTH AMENDMENT TO THE THIRD
AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.
This FIFTH AMENDMENT TO THE THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., dated as of March 26, 1999 (this
"Amendment"), is being executed by AIMCO-GP, Inc., a Delaware corporation (the
"General Partner"), as the general partner of AIMCO Properties, L.P., a Delaware
limited partnership (the "Partnership"), pursuant to the authority conferred on
the General Partner by Section 7.3.C(7) of the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 29,
1994, as amended and/or supplemented from time to time (the "Agreement").
Capitalized terms used, but not otherwise defined herein, shall have the
respective meanings ascribed thereto in the Agreement.
WHEREAS, pursuant to Section 4.2.A of the Agreement, the
General Partner is authorized to determine the designations, preferences and
relative, participating, optional or other special rights, powers and duties of
Partnership Preferred Units.
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
(1) The Agreement is hereby amended by the addition of a new exhibit,
entitled "Exhibit R," in the form attached hereto, which shall be attached to
and made a part of the Agreement.
(2) Except as specifically amended hereby, the terms, covenants,
provisions and conditions of the Agreement shall remain unmodified and continue
in full force and effect and, except as amended hereby, all of the terms,
covenants, provisions and conditions of the Agreement are hereby ratified and
confirmed in all respects.
IN WITNESS WHEREOF, this Amendment has been executed as of the date
first written above.
GENERAL PARTNER:
AIMCO-GP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President and Vice Chairman
2
EXHIBIT R
PARTNERSHIP UNIT DESIGNATION
OF THE
CLASS TWO 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
Two Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be Ten Million (10,000,000).
2. DEFINITIONS.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the Third Amended and Restated Agreement of Limited
Partnership of AIMCO Properties, L.P. as amended, supplemented or restated from
time to time (the "Agreement"), as modified by this Partnership Unit Designation
and the defined terms used herein. For purposes of this Partnership Unit
Designation, the following terms shall have the respective meanings ascribed
below:
"Assignee" shall mean a Person to whom one or more Preferred Units have
been Transferred in a manner permitted under the Agreement, but who has not
become a Substituted Limited Partner, and who has the rights set forth in
Section 11.5 of the Agreement.
"Cash Amount" shall mean, with respect to any Tendered Units, cash in
an amount equal to the product of (i) the number of Tendered Units, multiplied
by (ii) the Liquidation Preference for a Preferred Unit.
"Class Two Partnership Preferred Unit" or "Preferred Unit" shall mean 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 Partnership Unit Designation.
"Common Shares" shall mean the shares of Class A Common Stock of the
Previous General Partner.
"Common Shares Amount" shall mean, with respect to any Tendered Units,
a number of Common Shares equal to the quotient obtained by dividing (i) the
Cash Amount for such Tendered Units, by (ii) the Market Value of a Common Share
calculated as of the date of receipt by the General Partner of a Notice of
Redemption for such Tendered Units.
"Cut-Off Date" shall mean the fifth (5th) Business Day after the
General Partner's receipt of a Notice of Redemption.
"Declination" shall have the meaning set forth in Section 6(f) of this
Partnership Unit Designation.
"Distribution Payment Date" shall have the meaning set forth in Section
4(a) of this Partnership Unit Designation.
R-1
3
"Junior Partnership Units" shall have the meaning set forth in Section
3(c) of this Partnership Unit Designation.
"Liquidation Preference" shall have the meaning set forth in Section
5(a) of this Partnership Unit Designation.
"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, Class I High Performance Partnership Units, Class I Partnership Preferred
Units, Class One Partnership Preferred Units and Class Two Partnership Preferred
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))).
"Market Value" shall mean, as of any calculation date and with respect
to any share of stock, the average of the daily market prices for ten (10)
consecutive trading days immediately preceding the calculation date. The market
price for any such trading day shall be:
(i) if the 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 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 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 Market Value of the shares
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; provided, further, that the General Partner is authorized
to adjust the market price for any trading day as may be necessary, in its
judgment, to reflect an event that occurs at any time after the commencement of
such ten day period that would unfairly distort the Market Value, including,
without limitation, a stock dividend, split, subdivision, reverse stock split,
or share combination.
"Notice of Redemption" shall mean a Notice of Redemption in the form of
Annex I to this Partnership Unit Designation.
R-2
4
"Parity Partnership Units" shall have the meaning set forth in Section
3(b) of this Partnership Unit Designation.
"Partnership" shall mean AIMCO Properties, L.P., a Delaware limited
partnership.
"Preferred Shares" shall mean shares of the Class I Cumulative
Preferred Stock of the Previous General Partner.
"Primary Offering Notice" shall have the meaning set forth in Section
6(h)(4) of this Partnership Unit Designation.
"Public Offering Funding" shall have the meaning set forth in Section
6(f)(2) of this Partnership Unit Designation.
"Redemption" shall have the meaning set forth in Section 6(b) of this
Partnership Unit Designation.
"Registrable Shares" shall have the meaning set forth in Section
6(f)(2) of this Partnership Unit Designation.
"Senior Partnership Units" shall have the meaning set forth in Section
3(a) of this Partnership Unit Designation.
"Single Funding Notice" shall have the meaning set forth in Section
6(f)(3) of this Partnership Unit Designation.
"Specified Redemption Date" shall mean, with respect to any Redemption,
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 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 5 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.
"Tendering Party" shall have the meaning set forth in Section 6(b)
hereof.
"Tendered Units" shall have the meaning set forth in Section 6(b)
hereof.
3. RANKING.
Any class or series of Partnership Units of the Partnership shall be
deemed to rank:
(a) prior or senior to the Class Two Partnership Preferred
Units, as to the payment of distributions and as to the distribution of assets
upon liquidation, dissolution or winding
R-3
5
up, if (i) such class or series of Partnership Units shall be Class One
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 Two 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");
(b) on a parity with the Class Two Partnership Preferred
Units, as to the payment of distributions and as to the 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 Two
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, Class G Partnership Preferred Units,
Class H Partnership Preferred Units, Class I Partnership Preferred Units, Class
J Partnership Preferred Units, Class K Partnership Preferred Units, Class One
Partnership Preferred Units, or (ii) the holders of such class or series of
Partnership Units and the Class Two 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
(c) junior to the Class Two 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 Two 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").
4. QUARTERLY CASH DISTRIBUTIONS.
(a) Holders of Preferred Units will be entitled to receive,
when and as declared by the General Partner, quarterly cash distributions at the
rate of $0.50 per Preferred Unit; provided, however, that at any time and from
time to time on or after March 1, 2005, the Partnership may adjust the quarterly
cash distribution rate on the Preferred Units to equal 25% of the lower of (i)
two percent (2%) plus the annual interest rate then applicable to U.S. Treasury
notes with a maturity of five years and (ii) the annual dividend rate on the
class or series of preferred stock most recently issued by the Previous General
Partner that (x) is not convertible into another security of the Previous
General Partner at the option of the holder and (y) ranks on a parity with its
Class H Cumulative Preferred Stock. Such adjustment shall become effective upon
the date the Partnership issues a notice to such effect to the holders of the
Preferred Units. Any such distributions will be cumulative from the date of
original issue, whether or not in any distribution period or periods such
distributions have been declared, and shall be payable quarterly on February 15,
May 15, August 15 and November 15 of each year (or, if not a Business Day, the
next succeeding Business Day) (each a "Distribution Payment Date"), commencing
on the first such date occurring after the date of original issue. If the
Preferred Units are issued on any day other than a Distribution Payment Date,
the first distribution payable on such Preferred Units will be prorated for the
portion of the quarterly period that such Preferred Units are outstanding on the
basis of twelve 30-day months and a 360-day year. Distributions will be payable
in arrears to holders of record as they appear on the records of the Partnership
at the close of business
R-4
6
on the February 1, May 1, August 1 or November 1, as the case may be,
immediately preceding each Distribution Payment Date. Holders of Preferred Units
will not be entitled to receive any distributions in excess of cumulative
distributions on the Preferred Units. No interest, or sum of money in lieu of
interest, shall be payable in respect of any distribution payment or payments on
the Preferred Units that may be in arrears. Holders of any Preferred Units that
are issued after the date of original issuance will be entitled to receive the
same distributions as holders of any Preferred Units issued on the date of
original issuance.
(b) When distributions are not paid in full upon the Preferred
Units or any Parity Partnership Units, or a sum sufficient for such payment is
not set apart, all distributions declared upon the Preferred Units and any
Parity Partnership Units shall be declared ratably in proportion to the
respective amounts of distributions accumulated and unpaid on the Preferred
Units and accumulated and unpaid on such Parity Partnership Units. Except as set
forth in the preceding sentence, unless distributions on the Preferred Units
equal to the full amount of accumulated and unpaid distributions have been or
contemporaneously are declared and paid, or declared and a sum sufficient for
the payment thereof has been or contemporaneously is set apart for such payment,
for all past distribution periods, no distributions shall be declared or paid or
set apart for payment by the Partnership with respect to any Parity Partnership
Units.
(c) Unless full cumulative distributions (including all
accumulated, accrued and unpaid distributions) on the Preferred Units have been
declared and paid, or declared and set apart for payment, for all past
distribution periods, no distributions (other than distributions paid in Junior
Partnership Units or options, warrants or rights to subscribe for or purchase
Junior Partnership Units) may be declared or paid or set apart for payment by
the Partnership and no other distribution of cash or other property may be
declared or made, directly or indirectly, by the Partnership with respect to any
Junior Partnership Units, nor shall any Junior Partnership Units be redeemed,
purchased or otherwise acquired (except for a redemption, purchase or other
acquisition of Partnership Common Units made for purposes of an employee
incentive or benefit plan of the Partnership or any affiliate thereof,
including, without limitation, the Previous General Partner and its affiliates)
for any consideration (or any monies be paid to or made available for a sinking
fund for the redemption of any such Junior Partnership Units), directly or
indirectly, by the Partnership (except by conversion into or exchange for Junior
Partnership Units, or options, warrants or rights to subscribe for or purchase
Junior Partnership Units), nor shall any other cash or other property be paid or
distributed to or for the benefit of holders of Junior Partnership Units.
(d) Notwithstanding the foregoing provisions of this Section
4, the Partnership shall not be prohibited from (i) declaring or paying or
setting apart for payment any distribution on any Parity Partnership Units or
(ii) redeeming, purchasing or otherwise acquiring any Parity Partnership Units,
in each case, if such declaration, payment, redemption, purchase or other
acquisition is necessary to maintain the Previous General Partner's
qualification as a REIT.
5. LIQUIDATION PREFERENCE.
(a) Upon any voluntary or involuntary liquidation, dissolution
or winding up of the Partnership, before any allocation of income or gain by the
Partnership shall be made to or set apart for the holders of any Junior
Partnership Units, to the extent possible, the holders of Preferred Units shall
be entitled to be allocated income and gain to effectively enable them to
receive a liquidation preference (the "Liquidation Preference") of (i) $25 per
Preferred Unit, plus (ii) accumulated, accrued and unpaid distributions (whether
or not earned or declared) to the date of final distribution to such holders;
but such holders shall not be entitled to any further payment or allocation.
Until all holders
R-5
7
of the Preferred Units have been paid the Liquidation Preference in full, no
allocation of income or gain will be made to any holder of Junior Units upon the
liquidation, dissolution or winding up of the Partnership.
(b) If, upon any liquidation, dissolution or winding up of the
Partnership, the assets of the Partnership, or proceeds thereof, distributable
among the holders of Preferred Partnership Units shall be insufficient to pay in
full the Liquidation Preference and liquidating payments on any Parity
Partnership Units, then following certain allocations made by the Partnership,
such assets, or the proceeds thereof, shall be distributed among the holders of
Preferred Units and any such Parity Partnership Units ratably in the same
proportion as the respective amounts that would be payable on such Preferred
Units and any such Parity Partnership Units if all amounts payable thereon were
paid in full.
(c) A voluntary or involuntary liquidation, dissolution or
winding up of the Partnership will not include a consolidation or merger of the
Partnership with one or more partnerships, corporations or other entities, or a
sale or transfer of all or substantially all of the Partnership's assets.
(d) Upon any liquidation, dissolution or winding up of the
Partnership, after all allocations shall have been made in full to the holders
of Preferred Units and any Parity Partnership Units to enable them to receive
their respective liquidation preferences, any Junior Partnership Units shall be
entitled to receive any and all assets remaining to be paid or distributed, and
the holders of the Preferred Units and any Parity Partnership Units shall not be
entitled to share therein.
6. REDEMPTION.
(a) Except as set forth in Section 6(l) hereof, the Preferred
Units may not be redeemed at the option of the Partnership, and will not be
required to be redeemed or repurchased by the Partnership or the Previous
General Partner except if a holder of a Preferred Unit effects a Redemption, as
provided for in Section 6(b) hereof. The Partnership or the Previous General
Partner may purchase Preferred Units from time to time in the open market, by
tender or exchange offer, in privately negotiated purchases or otherwise.
(b) On or after the first (1st) anniversary of becoming a
holder of Preferred Units, a Qualifying Party 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 Preferred Units held by such Qualifying Party (any
Preferred Units tendered for Redemption being hereafter "Tendered Units") in
exchange (a "Redemption") for Common Shares of Preferred 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 pursuant
to a Notice of Redemption delivered to the General Partner by the Qualifying
Party when exercising the Redemption right (the "Tendering Party").
(c) If the Partnership elects to redeem Tendered Units for
Common Shares or Preferred Shares rather than cash, then the Partnership shall
direct the Previous General Partner to issue and deliver such Common Shares or
Preferred Shares to the Tendering Party pursuant to the terms set forth in this
Section 6, 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 Common Shares or Preferred Shares. In making such
election to cause the Previous General Partner
R-6
8
Partner to acquire Tendered Units, the Partnership shall act in a fair,
equitable and reasonable manner that neither prefers one group or class of
Tendering Parties over another nor discriminates against a group or class of
Tendering Parties. If the Partnership elects to redeem any number of Tendered
Units for Common Shares or Preferred 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 (i) a number of Common
Shares equal to the Common Shares Amount for such number of Tendered Units, (ii)
if (x) the Notice of Redemption for such Tendered Units is received by the
General Partner after the second (2nd) anniversary of the Tendering Party
becoming a holder of such Preferred Units and (y) the Preferred Shares are then
listed on the New York Stock Exchange or another national securities exchange, a
number of Preferred Shares equal to such number of Tendered Units, or (iii) any
combination of (i) and (ii). 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 Common Shares or Preferred Shares shall
be delivered by the Previous General Partner as duly authorized, validly issued,
fully paid and non-assessable shares, 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 6, 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 Common Shares or Preferred Shares are issued
pursuant to this Section 6, 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 Common Shares or Preferred Shares for all purposes,
including, without limitation, rights to vote or consent, receive dividends, and
exercise rights, as of the Specified Redemption Date. Common Shares or Preferred
Shares issued upon an acquisition of the Tendered Units by the Previous General
Partner pursuant to this Section 6 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.
(d) The Partnership shall have no obligation to effect any
redemption unless and until a Tendering Party has given the Partnership a Notice
of Redemption. Each Notice of Redemption shall be sent by hand delivery or by
first class mail, postage prepaid, to AIMCO Properties, L.P., c/o AIMCO-GP,
Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Investor Relations, or to such other address as the Partnership shall specify in
writing by delivery to the holders of the Preferred Units in the same manner as
that set forth above for delivery of the Notice of Redemption. At any time prior
to the Specified Redemption Date for any Redemption, any holder may revoke its
Notice of Redemption.
(e) 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 record date
for such distribution precedes or coincides with such delivery of the Notice of
Redemption. If the Partnership elects to redeem any number of Tendered Units for
cash, the Cash Amount for such number of Tendered Units shall be delivered as a
certified check payable to the
R-7
9
Tendering Party or, in the General Partner's sole and absolute discretion, in
immediately available funds.
(f) 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 Common Shares or Preferred Shares pursuant to this Section
6 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
Previous 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
Common Shares or Preferred Shares ("Registrable Shares") equal
to the Common Shares or Preferred 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
Preferred Units and having Redemption rights pursuant to this
Section 6 and require that all such Qualifying Parties elect
whether or not to effect a Redemption of their Preferred 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
Preferred 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
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 next twelve months; provided, however, that
the Previous General Partner shall not be required to acquire
Preferred Units pursuant to this Section 6(f) more than twice
within any 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.
(g) Notwithstanding the provisions of this Section 6, the
Previous General Partner shall not, under any circumstances, elect to acquire
Tendered Units in exchange for the Common Shares or Preferred Shares if such
exchange would be prohibited under the Charter.
(h) Notwithstanding anything herein to the contrary, with
respect to any Redemption pursuant to this Section 6:
R-8
10
(1) All Preferred Units acquired by the Previous
General Partner pursuant to this Section 6 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.
(2) Subject to the Ownership Limit, no Tendering
Party may effect a Redemption for less than five hundred (500)
Preferred Units or, if such Tendering Party holds (as a
Limited Partner or, economically, as an Assignee) less than
five hundred (500) Preferred Units, all of the Preferred 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 this
Section 6, 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 6(f) 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 of the Agreement) all Preferred Units subject to
any Redemption, and be treated as a Limited Partner or an
Assignee, as applicable, with respect to such Preferred Units
for all purposes of the Agreement, until such Preferred Units
are either paid for by the Partnership pursuant to this
Section 6 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
this Section 6 on the Specified Redemption Date. Until a
Specified Redemption Date and an acquisition of the Tendered
Units by the Previous General Partner pursuant to this Section
6, the Tendering Party shall have no rights as a
R-9
11
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 6(h), all Partnership Common Units and Partnership Preferred Units,
including Preferred Units, beneficially owned by a Related Party of a Tendering
Party shall be considered to be owned or held by such Tendering Party.
(i) In connection with an exercise of Redemption rights
pursuant to this Section 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 Common Shares or Preferred
Shares and any other classes or shares of the Previous General
Partner 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 Common Shares or Preferred 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 Common Shares, Preferred Shares or any
other class of shares of the Previous General Partner 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
Common Shares or Preferred Shares or any other class of shares
of the Previous General Partner by the Tendering Party and any
Related Party remain unchanged from that disclosed in the
affidavit required by Section 6(i)(a) or (b)) after giving
effect to the Redemption, neither the Tendering Party nor any
Related Party shall own Common Shares or Preferred Shares or
other shares of the Previous General Partner in violation of
the Ownership Limit.
(j) On or after the Specific Redemption Date, each holder of
Preferred Units shall surrender to the Partnership the certificate evidencing
such holder's Preferred Units, at the address to which a Notice of Redemption is
required to be sent. Upon such surrender of a certificate, the Partnership shall
thereupon pay the former holder thereof the applicable Cash Amount and/or
deliver Common Shares or Preferred Shares for the Preferred Units evidenced
thereby. From and after the Specific Redemption Date (i) distributions with
respect to the Preferred Units shall cease to accumulate, (ii) the Preferred
Units shall no longer be deemed outstanding, (iii) the holders thereof shall
cease to be Partners to the extent of their interest in such Preferred Units,
and (iv) all rights whatsoever with respect to the Preferred Units shall
terminate, except the right of the holders of the Preferred Units to receive
Cash Amount and/or Common Shares or Preferred Shares therefor, without interest
or any sum of money in lieu of interest thereon, upon surrender of their
certificates therefor.
(k) Notwithstanding the provisions of this Section 6, the
Tendering Parties (i) shall not be entitled to elect or effect a Redemption
where the Redemption would consist of less than all the Preferred Units held by
Partners and, to the extent that the aggregate Percentage Interests of the
Limited Partners would be reduced, as a result of the Redemption, to less than
one percent (1%) and
R-10
12
(ii) shall have no rights under the Agreement that would otherwise be prohibited
under the Charter. To the extent that any attempted Redemption would be in
violation of this Section 6(k), it shall be null and void ab initio, and the
Tendering Party shall not acquire any rights or economic interests in Common
Shares or Preferred Shares otherwise issuable by the Previous General Partner
hereunder.
(l) Notwithstanding any other provision of the 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 this Section 6 for the amount of Preferred 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 6(l). Such notice given by the General Partner to a Limited
Partner pursuant to this Section 6(l) 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 6(l), (a) any Limited Partner (whether or not eligible
to be a Tendering Party) may, in the General Partner's sole and absolute
discretion, be treated as a Tendering Party and (b) the provisions of Sections
6(f)(1), 6(h)(2), 6(h)(3) and 6(h)(5) hereof shall not apply, but the remainder
of this Section shall apply, mutatis mutandis.
7. STATUS OF REACQUIRED UNITS.
All Preferred Units which shall have been issued and reacquired in any
manner by the Partnership shall be deemed cancelled and no longer outstanding.
8. GENERAL.
The ownership of the Preferred Units shall be evidenced by one or more
certificates in the form of Annex II hereto. 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 redemption, or any other event having
an effect on the ownership of, the Preferred Units.
9. ALLOCATIONS OF INCOME AND LOSS.
For each taxable year, (i) each holder of Preferred Units will be
allocated net income of the Partnership in an amount equal to the distributions
made on such holder's Preferred Units during such taxable year, and (ii) each
holder of Preferred Units will be allocated its pro rata share, based on the
portion of outstanding Preferred Units held by it, of any net loss of the
Partnership that is not allocated to holders of Partnership Common Units or
other interests in the Partnership. Upon liquidation, dissolution or winding up
of the Partnership, the holders of Preferred Units will be allocated income and
gain sufficient to enable them to realize the Liquidation Preference in full.
10. VOTING RIGHTS.
Except as otherwise required by applicable law or in the Agreement, the
holders of the Preferred Units will have the same voting rights as holders of
the Partnership Common Units. As long as any Preferred Units are outstanding,
for purposes of determining the Consent of Limited Partners under the Agreement,
the "Majority of Interests of Limited Partners" shall have the meaning set forth
in Section 2 hereof. As long as any Preferred Units are outstanding, in addition
to any other vote or consent of partners required by law or by the Agreement,
the affirmative vote or consent of holders of
R-11
13
at least 50% of the outstanding Preferred Units will be necessary for effecting
any amendment of any of the provisions of the Partnership Unit Designation of
the Preferred Units that materially and adversely affects the rights or
preferences of the holders of the Preferred Units. The creation or issuance of
any class or series of Partnership Units, including, without limitation, any
Partnership Units that may have rights junior to, on a parity with, or senior or
superior to the Preferred Units, will not be deemed to have a material adverse
effect on the rights or preferences of the holders of Preferred Units. With
respect to the exercise of the above-described voting rights, each Preferred
Unit will have one (1) vote per Preferred Unit.
11. RESTRICTIONS ON TRANSFER.
Preferred Units are subject to the same restrictions on transfer
applicable to Common Units, as set forth in the Agreement.
R-12
14
ANNEX I
TO EXHIBIT R
NOTICE OF REDEMPTION
To: AIMCO Properties, L.P.
c/o AIMCO-GP, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Investor Relations
The undersigned Limited Partner or Assignee hereby irrevocably
tenders for redemption Class Two Partnership Preferred 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 it may be
amended and supplemented from time to time (the "Agreement"). All capitalized
terms used herein and not otherwise defined shall have the respective meanings
ascribed thereto in the Partnership Unit Designation of the Class Two
Partnership Preferred Units. The undersigned Limited Partner or Assignee:
(a) if the Partnership elects to redeem such Class Two
Partnership Preferred Units for Common Shares or Preferred 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 Class Two Partnership Preferred Units;
(b) undertakes (i) to surrender such Class Two Partnership
Preferred Units and any certificate therefor at the closing of the
Redemption contemplated hereby and (ii) to furnish to the Previous
General Partner, prior to the Specified Redemption Date:
(1) A written affidavit, dated the same date as this
Notice of Redemption, (a) disclosing the actual and
constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of Common Shares or Preferred
Shares by (i) the undersigned Limited Partner or Assignee and
(ii) any Related Party and (b) representing that, after giving
effect to the Redemption, neither the undersigned Limited
Partner or Assignee nor any Related Party will own Common
Shares or Preferred Shares in excess of the Ownership Limit;
(2) A written representation that neither the
undersigned Limited Partner or Assignee nor any Related Party
has any intention to acquire any additional Common Shares or
Preferred Shares prior to the closing of the Redemption
contemplated hereby on the Specified Redemption Date; and
(3) An undertaking to certify, at and as a condition
to the closing of the Redemption contemplated hereby on the
Specified Redemption Date, that either (a) the actual and
constructive ownership of Common Shares or Preferred Shares by
the undersigned Limited Partner or Assignee
R-I-1
15
and any Related Party remain unchanged from that disclosed in
the affidavit required by paragraph (1) above, or (b) after
giving effect to the Redemption contemplated hereby, neither
the undersigned Limited Partner or Assignee nor any Related
Party shall own Common Shares or Preferred Shares in violation
of the Ownership Limit.
(c) directs that the certificate representing the Common
Shares or Preferred Shares, or the certified check representing the
Cash Amount, in either case, deliverable upon the closing of the
Redemption contemplated hereby be delivered to the address specified
below;
(d) represents, warrants, certifies and agrees that:
(i) the undersigned Limited Partner or Assignee has,
and at the closing of the Redemption will have, good,
marketable and unencumbered title to such Preferred Units,
free and clear of the rights or interests of any other person
or entity;
(ii) 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
Preferred Units as provided herein; and
(iii) 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.
Dated:
---------------
Name of Limited Partner or Assignee:
------------------------------------------
------------------------------------------
(Signature of Limited Partner or Assignee)
------------------------------------------
(Street Address)
------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
------------------------------------------
(continued on next page)
R-I-2
16
Issue check payable to
or Certificates in the
name of:
------------------------------------------
Please insert social security
or identifying number:
------------------------------------------
NOTICE: THE SIGNATURE OF THIS NOTICE OF REDEMPTION MUST CORRESPOND WITH THE
NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE FOR THE CLASS TWO PREFERRED
UNITS WHICH ARE BEING REDEEMED IN EVERY PARTICULAR WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION,
(Banks, Stockbrokers, Savings and Loan Associations and Credit Unions), WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC
RULE 17Ad-15.
R-I-3
17
ANNEX II
TO EXHIBIT R
FORM OF UNIT CERTIFICATE
OF
CLASS TWO PARTNERSHIP PREFERRED UNITS
[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,](1) 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, AS IT MAY BE AMENDED AND/OR SUPPLEMENTED FROM TIME TO TIME, 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
----------------------------------------------------------------
CLASS TWO PARTNERSHIP PREFERRED 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 Class Two Partnership Preferred Units represented hereby are
issued and shall be held subject to all of the provisions of the Agreement of
Limited Partnership of AIMCO Properties, L.P., as the same may be amended and/or
supplemented from time to time.
IN WITNESS WHEREOF, the undersigned has signed this Certificate.
Dated:
-------------
By
-----------------------------------
------------
(1) Not required if Units are issued pursuant to a current and effective
registration statement under the Act.
R-II-1
18
ASSIGNMENT
For Value Received, ________________________________ hereby sells,
assigns and transfers unto
-------------------------------------------------------------------------------
______________________ Class Two Partnership Preferred 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 Class
Two Partnership Preferred Unit(s) on the books of AIMCO Properties, L.P. with
full power of substitution in the premises.
Dated:
-------------
By
-----------------------------------
Name:
Signature Guaranteed by:
--------------------------------------
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION,
(Banks, Stockbrokers, Savings and Loan Associations and Credit Unions), WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC
RULE 17Ad-15.
R-II-2