Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. (b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter. (c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption: (i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit); (ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date; (iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and (iv) Any other documents as the General Partner may reasonably require. (d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible. (e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable. (f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 4 contracts
Samples: Limited Partnership Agreement (BGO Industrial Real Estate Income Trust, Inc.), Limited Partnership Agreement (BGO Industrial Real Estate Income Trust, Inc.), Limited Partnership Agreement (BGO Industrial Real Estate Income Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year two years (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)discretion. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 business days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, but subject to the subsequent sentence, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) Advisor shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner or the AdviserAdvisor. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser Advisor for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the AdviserAdvisor’s or Special Limited Partner’s election) ), unless the Board of Directors of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares in accordance with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units Section 8.5(b) hereof. A Limited Partner (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and or the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, Advisor) may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner (or, if applicable, the Advisor or Special Limited Partner) elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares; and (iii) it is the intent of the General Partner that such transaction be treated, for federal income tax purposes to the maximum extent possible, as a Section 743 adjustment. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner (or, if applicable, the Advisor or Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterArticles of Incorporation) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterArticles of Incorporation.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii2) 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;
(iii3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv4) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner Partner’s common stock from being owned by less than 100 persons and persons, the General Partner from being “closely held” within the meaning of Section section 856(h) of the Code, (c) and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the foregoing, Partnership be treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A redemption fee may be charged (other than to the AdviserAdvisor, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 3 contracts
Samples: Limited Partnership Agreement (IPC Alternative Real Estate Income Trust, Inc.), Limited Partnership Agreement (IPC Alternative Real Estate Income Trust, Inc.), Limited Partnership Agreement (IPC Alternative Real Estate Income Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of A. Except as otherwise set forth in any agreements separate agreement entered into between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each a Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (and subject to the terms and conditions set forth hereinherein or therein, on or after the date that is 14 months from the date of issuance of a Common Unit to a Limited Partner, such Limited Partner (other than the Company or any Subsidiary of the Company) shall have the right (the “Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Limited Partner (such Common Units (the being hereafter referred to as “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable onAmount; unless the terms of this Agreement or a separate agreement entered into between the Partnership and the Holder of such Common Units expressly provide that such Common Units are not entitled to the Redemption Right. The Partnership may, in the General Partner’s sole and absolute discretion, redeem Tendered Units at the request of the Holder of such Common Units prior to the end of the applicable 14 month period (or such other period as may be specified in any combination thereofseparate agreement entered into between the Partnership and a Limited Partner). Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the Holders of such Common Units, all Common Units shall be entitled to the Redemption Right. The Tendering Partner (as defined below) shall have no right, with respect to any Common Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right right (the “Tendering PartyPartner”). A Tendering Party The Cash Amount shall be deemed to have offered to sell the Tendered Units described payable in accordance with instructions set forth in the Notice of Redemption to the General Tendering Partner and on the Specified Redemption Date. Any Common Units redeemed by the Partnership pursuant to this Section 8.5A shall be cancelled upon such redemption.
B. Notwithstanding the provisions of Section 8.5A above, if a Limited Partner has delivered to the General Partner a Notice of Redemption then the Company may, in its sole and absolute discretiondiscretion (subject to Section 8.5D), elect to purchase directly assume and satisfy the Partnership’s Redemption Right obligation and acquire such some or all of the Tendered Units by paying from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the Company so elects, the Tendering Partner shall sell the Tendered Units to the Tendering Party either the Cash Amount or Company in exchange for the REIT Shares Amount. Within 15 days of receipt of a Notice of RedemptionIn such event, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Tendering Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice have no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require cause the Partnership to redeem all such Tendered Units. The Company shall give such Tendering Partner written notice of its election on or a portion before the close of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective business on the fifth Business Day after its receipt of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units Notice of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such PartnerRedemption. The Tendering Party Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, submit (i) such information, certification or affidavit as the General Partner, acting as a distinct legal entity, shall assume directly Company may reasonably require in connection with the obligation with respect thereto and shall satisfy application of the Tendering Party’s exercise of its Redemption Right, Ownership Limit to any such acquisition and (ii) such transaction shall be treatedwritten representations, for federal income tax purposesinvestment letters, as a Transfer by legal opinions or other instruments necessary, in the Tendering Party of such Tendered Units Company’ view, to effect compliance with the General Partner in exchange for REIT SharesSecurities Act. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions those provided in the Article Articles of Incorporation, Incorporation or the bylaws Bylaws of the General PartnerCompany, the Securities Act and Act, relevant state securities or “blue sky” lawssky laws and any applicable agreements with respect to such REIT Shares entered into by the Tendering Partner. No Notwithstanding any delay in such delivery (but subject to Section 8.5D), the Tendering Party Partner shall be deemed the owner of such REIT Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date. In addition, the REIT Shares for which the Common Units might be exchanged shall also bear all legends deemed necessary or appropriate by the Company. Neither any Tendering Partner whose Tendered Units are acquired by the General Partner Company pursuant to this Section 8.5B, any Partner, any Assignee nor any other interested Person shall have any right to require or cause the Company to register, qualify or require the General Partner to register list any REIT Shares owned or qualify held by such Person, whether or not such REIT Shares are issued pursuant to this Section 8.5B, with the Commission, with any federal or state securities agency commissioner, department or agency, under the Securities Act or to list such REIT Shares on the Exchange Act or with any stock exchange; unless subject to a separate written agreement pursuant to which the Company has granted registration or similar rights to any such Person.
C. Each Tendering Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same. Each Tendering Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units to the General Partner (or its designee), such Tendering Partner shall assume and pay such transfer tax. Each Tendering Partner further agrees to pay to the Partnership the amount of any tax withholding due upon the redemption of Tendered Units and authorizes the Partnership to retain such portion of the Cash Amount as the Partnership reasonably determines is necessary to satisfy its tax withholding obligations. In the event the Company elects to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount, the Tendering Partner agrees to pay to the Company the amount of any tax withholding due upon the redemption of Tendered Units and, in the event the Tendering Partner has not paid or made arrangements satisfactory to the Company, in its sole discretion, to pay the amount of any such tax withholding prior to the Specified Redemption Date, the Company may elect to either cancel such exchange (in which case the Tendering Partner’s exercise of the Redemption Right will be null and void ab initio), satisfy such tax withholding obligation by retaining REIT Shares with a fair market value, as determined by the Company in its sole discretion, equal to the amount of such obligation or satisfy such tax withholding obligation using amounts paid by the Partnership, which amounts shall be treated as a loan by the Partnership to the Tendering Partner in the manner set forth in Section 5.1B.
D. Notwithstanding the provisions of Section 8.5(a8.5A, Section 8.5B, Section 8.5C or any other provision of this Agreement, a Limited Partner (i) shall not be entitled to effect the Redemption Right for cash or an exchange for REIT Shares to the extent that (if the Company were to elect to acquire the Tendered Units for REIT Shares in accordance with Section 8.5B) the ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the Specified Redemption Date could cause such Partner or any other Person to violate the Ownership Limit and this Section 8.5(b), the Tendering Parties (ii) shall have no rights under this Agreement that to acquire REIT Shares which would otherwise be prohibited under the CharterArticles of Incorporation. To the extent any attempted redemption or exchange for REIT Shares would be in violation of this Section 8.5D, it shall be null and void ab initio and such Limited Partner shall not acquire any rights or economic interest in the cash otherwise payable upon such redemption or the REIT Shares otherwise issuable upon such exchange.
E. Notwithstanding anything herein to the contrary (c) In connection but subject to Section 8.5D), with an exercise of the Redemption Right respect to any redemption or exchange for REIT Shares pursuant to this Section 8.5, : (i) without the Tendering Party shall submit the following to consent of the General Partner, each Limited Partner may effect the Redemption Right only one time in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and each fiscal quarter; (ii) any Related Party and (b) representing that, after giving effect to without the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess consent of the Aggregate Share Ownership Limit or General Partner, each Limited Partner may not effect the Redemption Right for less than 1,000 Common Share Ownership Limit (Units or, if applicable the Excepted Holder Limit);
Limited Partner holds less than 1,000 Common Units, all of the Common Units held by such Limited Partner; (iiiii) A written representation that neither without the Tendering Party nor consent of the General Partner, each Limited Partner may not effect the Redemption Right during the period after the Partnership Record Date with respect to a distribution and before the record date established by the Company for a distribution to its common stockholders of some or all of its portion of such distribution; (iv) the consummation of any Related Party has any intention to acquire any additional redemption or exchange for REIT Shares prior shall be subject to the closing expiration or termination of the Redemption applicable waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended; and (v) each Tendering Partner shall continue to own all Common Units subject to any redemption or exchange for REIT Shares, and be treated as a Limited Partner with respect to such Common Units for all purposes of this Agreement, until such Common Units are either paid for by the Partnership pursuant to Section 8.5A hereof or transferred to the Company and paid for by the issuance of the REIT Shares, pursuant to Section 8.5B hereof on the Specified Redemption Date;
(iii) An undertaking to certify, at and as . Until a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership Tendering Partner shall have no rights as a stockholder of REIT Shares the Company with respect to such Tendering Partner’s Common Units.
F. All Common Units acquired by the Tendering Party Company pursuant to Section 8.5B hereof shall automatically, and any Related Party remain unchanged from that disclosed without further action required, be converted into and deemed to be Limited Partner Interests and held by the Company in its capacity as a Limited Partner in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirePartnership.
(d) Any Cash Amount G. In the event that the Partnership issues additional Partnership Interests to be paid to a Tendering Party any Additional Limited Partner pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement4.2, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by make such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant revisions to this Section 8.58.5 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
Appears in 3 contracts
Samples: Limited Partnership Agreement (Paramount Group, Inc.), Limited Partnership Agreement (Paramount Group, Inc.), Limited Partnership Agreement (Paramount Group, Inc.)
Redemption Right. (a) Subject to this Section 8.5 Sections 7.04(b) through (g), and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themthem and any restriction agreed to in writing between the Redeeming Limited Partner and the General Partner, each Limited Partner Partner, other than the General PartnerPartner (in its capacity as the holder of Limited Partnership Interests), after holding any shall have the right (the “Redemption Right”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Partnership Units that have been held by such Limited Partner for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, lesser time as determined by the General Partner in its sole discretion (and absolute discretion) at a “redemption price equal to and in the form of the Redemption Right”)Amount to be paid by the Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party shall be deemed to have offered to sell ; provided, however, that the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner mayPartnership shall, in its sole and absolute discretion, elect have the option to purchase directly and acquire such Tendered Units satisfy the Redemption Right by paying delivering to the Tendering Party Redeeming Limited Partner either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a , provided, further, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Partnership Units subject to the Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 7.04(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Limited Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as may be elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party General Partner shall sell acquire the Partnership Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such number acquired Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 7.04(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Limited Partner within five Business Days after its receipt of such Notice of Redemption. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner’s exercise of such Redemption Right, and each of the Tendered Redeeming Limited Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner and the Redeeming Limited Partner for federal income tax purposes as a sale by the Redeeming Limited Partner of its Partnership Units to the General Partner. Each Redeeming Limited Partner in exchange for a number of REIT Shares equal agrees to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify execute such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(c) [intentionally omitted]
(d) Notwithstanding the provisions of Sections 7.04(a) and 7.04(b), a Limited Partner shall not be entitled to exercise the Redemption Right if, in the case of Section 7.04(b), the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 7.04(b) (regardless of whether or not the General Partner would in fact exercise its rights under Section 7.04(b)), would (i) result in such Partner or any other Person owning, directly or indirectly, REIT Shares in excess of the Ownership Limitation (as defined in the Declaration of Trust and calculated in accordance therewith, except as provided in the Declaration of Trust), (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), (iii) result in the General Partner being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause the General Partner to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner’s, the Partnership’s or a Partnership Subsidiary’s real property, within the meaning of Section 856(d)(2)(B) of the Code, or (v) be likely to cause the acquisition of REIT Shares by such Partner to be “integrated” with any other distribution of REIT Shares or Partnership Units for purposes of complying with the registration provisions of the Securities Act. The General Partner, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 7.04(d).
(e) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 7.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 90 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount. Any REIT Share Amount to be paid to a Redeeming Limited Partner pursuant to this Section 7.04 shall be paid on the Specified Redemption Date; provided, by causing however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 60 days to the extent required for the General Partner to cause additional REIT Shares to be issued or otherwiseissued. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(ef) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit B. As a condition to the exercise of the Redemption Right, a Redeeming Limited Partner shall pay, or make provision satisfactory to the General Partner for the payment of, any and all withholding taxes which the General Partner determines that the Partnership and/or the General Partner is obligated to collect in respect of the Redemption Right (and/or the issuance or transfer of the REIT Shares Amount or Cash Amount, as applicable, pursuant to the exercise thereof) and the Partnership and/or the General Partner may deduct from, as applicable, the Cash Amount or any other distributions or payments of any kind otherwise due to the Redeeming Limited Partner an amount equal to the total federal, state and local taxes required to be so withheld (with the amount so deducted being treated for all purposes as an amount actually distributed or paid to the Redeeming Limited Partner), and if such distributions and payments are inadequate to satisfy such federal, state and local taxes, or if no such distributions or payments are due or to become due to the Redeeming Limited Partner, then the Redeeming Limited Partner shall provide to the Partnership and/or the General Partner, as the case may be, with cash funds or make other arrangements satisfactory to the General Partner so that the Partnership and/or the General Partner, as applicable, has sufficient cash funds with which to satisfy such withholding tax obligation. It is understood that all matters with respect to the total amount of taxes to be withheld in respect of the Redemption Right (and/or the issuance or transfer of the REIT Shares Amount or Cash Amount, as applicable, pursuant to the exercise thereof) shall be as determined by the General Partner in its sole discretion.
(g) Notwithstanding any other provision of this Agreement, in addition to the restrictions and limitations set forth in this Section 7.04, the General Partner may place appropriate additional and/or further restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary by the General Partner to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which that states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea “publicly traded partnership” under Section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 3 contracts
Samples: Limited Partnership Agreement (Four Springs Capital Trust), Limited Partnership Agreement (Four Springs Capital Trust), Limited Partnership Agreement (Four Springs Capital Trust)
Redemption Right. (a) Subject to this Section 8.5 A. At any time from and after one year from the date hereof or at such other time as agreed in writing by any Limited Partner and the provisions of any agreements between the Partnership General Partner, and one or more Limited Partners with respect subject to Partnership Units held by themSections 8.6.B, 8.6.C and 8.6.D, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"REDEMPTION RIGHT") to require the Partnership to redeem or caused to be redeemed on a specified redemption date (which date shall be no less than five (5) Business Days after the receipt by the General Partner of a “Notice of Redemption”) all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, form of the Redemption Amount to be paid by the Partnership or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined a designee chosen by the General Partner Partner, in its sole discretion (a “Redemption Right”)discretion. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right redemption right (the “Tendering Party”"REDEEMING PARTNER"). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner mayThe foregoing notwithstanding, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for in respect of Partnership Units with an aggregate value less than 1,000 Partnership Units $25,000 or, if such Limited Partner holds less than 1,000 that amount of Partnership Units, all of the Partnership Units held by such Limited Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise date of its Redemption Right, and (ii) such transaction shall be treated, for federal income tax purposes, as a Transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered receipt by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance a Notice of Redemption with respect to the Partnership Units to be redeemed by the Partnership or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charterii) and other restrictions provided in the Article case of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an a deemed exercise of the Redemption Right pursuant to this Section 8.58.6.C, the Tendering Party date of the redemption of the subject Limited Partner's Partnership Units), or, in each case if such date is not a Business Day, the first Business Day thereafter.
B. Notwithstanding the provisions of Section 8.6.A, the General Partner or its designee may, in the General Partner's sole discretion, assume directly and satisfy a Redemption Right by paying to the Redeeming Partner the Redemption Amount on the specified redemption date, whereupon the General Partner or its designee, as the case may be, shall submit acquire the following Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. In the event that the General Partner shall exercise its right to satisfy the Redemption Right in the manner described in the preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner or its designee, on the one hand, and the Redeeming Partner, on the other hand, as a sale of the Redeeming Partner's Partnership Units to the General Partner for federal income tax purposes. Each Redeeming Partner agrees to execute such documents as the Partnership or the General Partner, as the case may be, may reasonably require in addition connection with the issuance of GGC Shares upon exercise of the Redemption Right. For purposes of clarity, it is acknowledged and agreed that the General Partner can satisfy a Redemption Right by choosing, in its sole discretion, to have the Notice Redeeming Partner paid either the Cash Amount or the GGC Shares Amount.
C. Notwithstanding the provisions of Redemption:
Sections 8.6.A and 8.6.B, (i) A written affidavitif a Limited Partner (other than the General Partner) effects or attempts to effect a transfer (as defined in Article 11) of its Limited Partnership Interest or any Partnership Units beneficially owned by such Limited Partner in contravention of provisions herein relating to transfers of such Limited Partnership Interests or Partnership Units, 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 or (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1General Partner or GGC shall become insolvent (however such insolvency may be evidenced) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as proceedings are instituted by or against the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on or GGC under the Specified Redemption Date; providedUnited States Bankruptcy Code or under any bankruptcy, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required reorganization or insolvency law or other law for the Partnership or relief of debtors and, in the General Partner to obtain financing to be used to make such payment case of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnershipinvoluntary proceedings, the General Partner or any Affiliate GGC, as the case may be, is unable to have such proceedings dismissed within 60 days after commencement thereof (that is not already registered (a) and (b) collectively, an "INSOLVENCY EVENT"), then the General Partner may, in its sole discretion, treat such Limited Partner in the foregoing clause (i) or, in the case of the foregoing clause (ii), treat all Limited Partners, in each case, as an investment adviser under if such Limited Partners had exercised their respective Redemption Rights in respect of their Limited Partnership Interests or Partnership Units. For the Advisers Act) purposes of this Section 8.6.C, no Notice of Redemption or specified redemption date shall be required. Instead, the General Partner shall, if it so chooses in its sole discretion, redeem such Limited Partnership Interests or Partnership Units for the Redemption Amount at a time and place of the General Partner's choosing, in its sole discretion.
D. Notwithstanding the provisions of Sections 8.6.A, 8.6.B and 8.6.C, except as an investment adviser under otherwise agreed to in writing between the Advisers Act, (h) the violation of Partnership and any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) Redemption Amount owing to a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Redeeming Partner shall give prompt written notice thereof be decreased by an amount equal to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel any monies owing from such Redeeming Partner to the Partnership which states thator GGC, in the opinion of whether or not such counsel, restrictions monies are necessary in order to avoid the foregoing, as applicablethen due.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 3 contracts
Samples: Limited Partnership Agreement (Gotham Golf Corp), Limited Partnership Agreement (Gotham Golf Corp), Limited Partnership Agreement (Gotham Golf Corp)
Redemption Right. (a) Subject to the provisions of this Section 8.5 8.05 and the provisions terms of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themPartners, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (a “Redemption”) on the Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Tendering Party”"Redeeming Partner"). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the General Partner elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption pursuant to the General Partner Section 8.05(b); and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date Partnership Record Date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.05(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership to redeem Tendered Units and agrees to acquire described in the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise Notice of its Redemption Right, and (ii) such transaction shall be treated, for federal income tax purposes, as a Transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which and the General Partner elects may, in its sole and absolute discretion, elect to issue purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares (rather than the Cash Amount) is referred to , as the “Applicable Percentage.” In making such election to acquire Tendered Units, elected by the General Partner shall act (in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to whereupon the General Partner in exchange shall acquire the Partnership Units offered for a number of REIT Shares equal to redemption by the product of the REIT Shares Amount redeeming Partner and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within ten (10) Business Days after the receipt by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article such Notice of Incorporation, the bylaws of Redemption. Unless the General PartnerPartner (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.05(b), the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right no obligation to cause the Redeeming Partner or require the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner shall exercise its right to register or qualify purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 8.05(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right and each of the Redeeming Partner, the Partnership and the General Partner, as the case may be, shall treat the transaction between the General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Partnership Units to the General Partner. Each Redeeming Partner agrees to execute such documents as the General Partner may reasonably require in connection with the issuance of REIT Shares upon exercise of the Redemption Right. If the Redeeming Partner receives REIT Shares, the Redeeming Partner shall have the right to receive any dividend or other distribution paid with any federal or state securities agency under the Securities Act or respect to list such REIT Shares if the record date for such dividend or distribution is on any stock exchange. or after the Specified Redemption Date.
(c) Notwithstanding the provisions of Section 8.5(a8.05(a) and this Section 8.5(b8.05(b), the Tendering Parties a Limited Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to this Section 8.5, the Tendering Party shall submit the following to 8.05(b) (regardless of whether the General Partner, Partner would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.05(b)) would (i) A written affidavitresult in such Partner or any other person owning, dated the same date as the Notice of Redemptiondirectly or indirectly, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Stock Ownership Limit or the Common Share Stock Ownership Limit (oreach as defined in the Charter) and calculated in accordance therewith, if applicable except as provided in the Excepted Holder Limit);
Charter, (ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional result in REIT Shares prior being owned by fewer than 100 persons (determined without reference to the closing an rules of the Redemption on the Specified Redemption Date;
attribution), (iii) An undertaking to certifyresult in the General Partner being "closely held" within the meaning of Section 856(h) of the Code, at and (iv) otherwise jeopardize the General Partner's status as a condition to REIT or (v) cause the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership acquisition of REIT Shares by such Partner to be "integrated" with any other distribution of REIT Shares for purposes of complying with the Tendering Party and any Related Party remain unchanged from registration provisions of the Securities Act. The General Partner, in its sole discretion, may waive the restriction on redemption set forth in this Section 8.05(c); provided, however, that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicableevent such restriction is waived, the Excepted Holder Limit); and
(iv) Any other documents as Redeeming Partner shall be paid the General Partner may reasonably requireCash Amount.
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Partner pursuant to this Section 8.5 8.05 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law that apply upon a Redeeming Partner's exercise of the Redemption Right. If a Redeeming Partner believes that it is exempt from such withholding upon a exercise of the Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C. If the Partnership or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Partner's exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units and the Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “"publicly traded partnership” " that is taxed as a corporation under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a "Restriction Notice") to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea "publicly traded partnership" that is taxed as a corporation under Section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 3 contracts
Samples: Limited Partnership Agreement (NNN Apartment REIT, Inc.), Limited Partnership Agreement (NNN Apartment REIT, Inc.), Limited Partnership Agreement (NNN Apartment REIT, Inc.)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 4.2.C.3 and 8.6.C, on or after the provisions date one (1) year after the closing of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held initial public offering of REIT Shares by themthe General Partner, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Class A Units held by such Partnership Units (Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right redemption right (the “Tendering Party”"Redeeming Partner"). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership one thousand (1,000) Class A Units or, if such Limited Partner holds less than 1,000 Partnership one thousand (1,000) Class A Units, all of the Partnership Class A Units held by such Limited Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Limited Partner's Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
(b) If B. Notwithstanding the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this provisions of Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units8.6.A, the General Partner shall act may, in its sole and absolute discretion, elect to assume directly and satisfy a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant Redemption Right by either paying to the terms of this Section 8.5Redeeming Partner the Cash Amount or issuing to the Redeeming Partner the REIT Shares Amount, as elected by the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, (in its sole and absolute discretion) on the Specified Redemption Date, whereupon the Tendering Party General Partner shall sell acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Class A Units. Unless the General Partner (in its sole and absolute discretion) shall exercise its right to assume directly and satisfy the Redemption Right, the General Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of the Tendered Redemption Right. In the event the General Partner shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner, and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Class A Units to the General Partner. Each Redeeming Partner in exchange for a number of REIT Shares equal agrees to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify execute such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(d) Any Cash Amount C. Notwithstanding the provisions of Section 8.6.A and Section 8.6.B, a Partner shall not be entitled to be paid to a Tendering Party exercise the Redemption Right pursuant to this Section 8.5 shall be paid 8.6.A if the delivery of REIT Shares to such Partner on the Specified Redemption Date; provided, however, that Date by the General Partner may elect pursuant to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership Section 8.6.B (regardless of whether or not the General Partner or would in fact exercise its rights under Section 8.6.B) would be prohibited under the Declaration of Trust. Without limitation on the preceding sentence, the following restrictions shall apply to obtain financing the exercise of a Redemption Right by a Partner: (i) neither a Person who is an "Excluded Holder" as defined in the Declaration of Trust, nor any Person related to an "Excluded Holder" by either blood or marriage, nor any Person whose ownership of REIT Shares would be used attributed to make such payment an "Excluded Holder" under Section 318 of the Cash AmountCode, nor any Person who would be considered by causing additional reason of the application of Section 318 of the Code to own REIT Shares to actually or constructively owned by an "Excluded Holder" shall be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners permitted to exercise their the Redemption Rights Right if (A) after giving effect to preventsuch exercise, among other things, (a) The Colonial Company or any Person from owning shares in excess direct or indirect Subsidiary of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership The Colonial Company would be regarded as a "related party tenant" of the General Partner from being owned for purposes of Section 856(d)(2)(B) of the Code and (B) the total rental income considered derived by less than 100 persons and the General Partner from being “closely held” within all "related party tenants" could reasonably be expected to exceed one percent (1%) of the meaning gross income of the General Partner (as determined for the purposes of Section 856(h856(c)(2) of the Code); and (ii) neither an "Excluded Holder", nor any Person related to an "Excluded Holder" by either blood or marriage, nor any Person whose ownership of REIT Shares would be attributed to an "Excluded Holder" under Section 544(a) of the Code, nor any Person who would be considered by reason of the application of Section 544(a) of the Code to own REIT Shares actually or constructively owned by an "Excluded Holder" shall be permitted to exercise the Redemption Right if, after giving effect to such exercise (cA) any single Person described above would be considered to own more than 29 percent of the outstanding REIT Shares (as determined for purposes of Sections 542(a)(2) and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 856(a)(6) of the Code, ); (dB) the Partnership’s assets being any two Persons described above would be considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation to own more than 34 percent of the Securities Act or other comparable state law, outstanding REIT Shares (fas determined for purposes of Sections 542(a)(2) the registration and 856(a)(6) of the Partnership as an investment company under the Investment Company Act, Code); (gC) the registration any three Persons described above would be considered to own more than 39 percent of the Partnershipoutstanding REIT Shares (as determined for purposes of Sections 542(a)(2) and 856(a)(6) of the Code); or (D) any four Persons described above would be considered to own more than 44 percent of the outstanding REIT Shares (as determined for purposes of Sections 542(a)(2) and 856(a)(6) of the Code).
D. Notwithstanding anything contained in Sections 8.6.A, 8.6.B, or 8.6.C, no Partner shall be entitled to exercise the Redemption Right pursuant to Section 8.6.A with respect to any Preferred Unit unless (i) such Preferred Unit has been issued to and is held by a Partner other than the General Partner, and (ii) the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under has expressly granted to such Partner the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by right to redeem such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof Preferred Units pursuant to each of the Limited Partners holding Partnership Units, which notice Section 8.6.A.
E. Preferred Units shall be accompanied by a copy of an opinion of counsel to the Partnership which states thatredeemed, if at all, only in the opinion of accordance with such counsel, restrictions redemption rights or options as are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) set forth with respect to a Redemption such Preferred Units (or class or series thereof) in connection with an exercise of Redemption Rights pursuant to this Section 8.5the instruments designating such Preferred Units (or class or series thereof).
Appears in 2 contracts
Samples: Agreement of Limited Partnership (Colonial Properties Trust), Agreement of Limited Partnership (Colonial Properties Trust)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.6(b) and 8.6(c), on or after the provisions date that is six (6) months following the issuance of any agreements between the a Partnership and one or more Limited Partners with respect Unit to Partnership Units held by them, each a Limited Partner (but in any case, following the date of the completion of the Initial Public Offering), such Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Company) shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) all or a portion of Specified Redemption Date such Partnership Units Unit (provided that such Partnership Unit constitutes a Common Unit) at a redemption price per Partnership Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the Redemption Right redemption right (the “Tendering PartyRedeeming Partner”). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the Company elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e8.6(b)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Partnership Units at any one time or, if such Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Any Partnership Units redeemed by the Partnership pursuant to this Section 8.6(a) shall be cancelled upon such redemption.
(b) Notwithstanding the provisions of Section 8.6(a), a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares Amount, as elected by the Company (in its sole and absolute discretion), on the Specified Redemption Date, whereupon the Company shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Company shall elect to exercise its right to purchase Partnership Units under this Section 8.6(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner elects within five (5) Business Days after the receipt by it of such Notice of Redemption. Unless the Company (in its sole and absolute discretion) shall exercise its right to assume the obligation purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6(b), the Company shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner’s exercise of the Redemption Right. In the event the Company shall exercise its right to purchase Partnership Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.6(b), then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Partner’s exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership and the Company shall treat the transaction shall be treatedbetween the Company and the Redeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner’s Partnership Units to the General Company. Each Redeeming Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects agrees to issue REIT Shares (rather than the Cash Amount) is referred to execute such documents as the “Applicable Percentage.” In making such election to acquire Tendered Units, Company may reasonably require in connection with the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number issuance of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an upon exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwiseRight. Notwithstanding the foregoing, the General Each Redeeming Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder provide to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner Company and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the Board of Directors such information as the General Partner determines that imposing such restrictions is necessaryPartner, the General Partner shall give prompt written notice thereof Partnership, the Company or the Board of Directors may reasonably request to each determine the effect of such Redeeming Partner’s potential ownership of REIT Shares on the Company’s status as a REIT. In case of any reclassification of the Limited Partners holding REIT Shares (including any reclassification upon a consolidation or merger in which the Company is the continuing corporation) into securities other than REIT Shares, for purposes of this Section 8.6(b), the Company (or its successor) may thereafter exercise its right to purchase Partnership Units, which notice shall be accompanied Units for the kind and amount of shares of such securities receivable upon such reclassification by a copy holder of an opinion the number of counsel to the REIT Shares for which such Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may Units could be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights purchased pursuant to this Section 8.5immediately prior to such reclassification.
(c) Notwithstanding the provisions of Section 8.6(a) and Section 8.6(b), a Partner shall not be entitled to exercise the Redemption Right pursuant to Section 8.6(a) to the extent that the delivery of REIT Shares to such Partner on the Specified Redemption Date by the Company pursuant to Section 8.6(b) (regardless of whether or not the Company would in fact exercise its rights under Section 8.6(b)) would (i) be prohibited, as determined in the sole discretion of the Company, under the Articles of Incorporation, (ii) cause the acquisition of REIT Shares by such Partner to be “integrated” with any other distribution of REIT Shares for purposes of complying with the Securities Act or (iii) result in a breach of Article VII of the Articles of Incorporation.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Angel Oak Mortgage, Inc.), Limited Partnership Agreement (Angel Oak Mortgage, Inc.)
Redemption Right. (a) Subject to this Section 8.5 8.04(c) and the provisions of any agreements agreement between the Partnership and one or more Limited Partners with respect to Partnership Partners, beginning on the date that is twelve months after the date of issuance of any Common Units held by them(including any Common Units that are issued upon the conversion of LTIP Units), each Limited Partner (other than the General Partner, after holding Parent REIT or any Partnership Units for at least one year (or such shorter period as consented to by Subsidiary of the General Partner in its sole discretion), or Parent REIT) shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such Partnership Limited Partner’s Common Units (at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)Amount. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to the General PartnerParent REIT) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party , and such notice shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to irrevocable unless otherwise agreed upon by the General Partner and Partner. In such event, the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either Partnership shall deliver the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Redeeming Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption DatePartner. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any not be obligated to satisfy such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Right if Parent REIT elects to purchase the Common Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction Notice of the restrictions set forth in Redemption pursuant to Section 8.5(c8.04(b) and Section 8.5(e))hereof. No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices one Notice of Redemption during each calendar yearquarter unless otherwise agreed upon by the General Partner. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership one thousand (1,000) Common Units or, if such Limited Partner holds less than 1,000 Partnership one thousand (1,000) Common Units, all of the Partnership Common Units held by such Limited Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Common Units so redeemed, to receive any distribution paid with respect to Partnership Common Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.04(a) hereof, if a Limited Partner elects exercises the Redemption Right by delivering to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than casha Notice of Redemption, then the Partnership shall direct may, in its sole and absolute discretion, elect to cause Parent REIT to purchase directly and acquire some or all of, and in such event Parent REIT agrees to purchase and acquire, such Common Units by paying to the Redeeming Limited Partner either the Cash Amount or the REIT Shares Amount, as elected by the General Partner to issue (in its sole and deliver absolute discretion) on the Specific Redemption Date, whereupon Parent REIT shall acquire the Common Units tendered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such Common Units. In the event Parent REIT Shares purchases Common Units with respect to the Tendering Party pursuant exercise of a Redemption Right, the Partnership shall have no obligation to pay any amount to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Limited Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Limited Partner’s exercise of its such Redemption Right, and (ii) such each of the Redeeming Limited Partner, the Partnership and Parent REIT shall treat the transaction shall be treated, between Parent REIT and the Redeeming Limited Partner as a sale of the Redeeming Limited Partner’s Common Units to Parent REIT for federal income tax purposes, . Each Redeeming Limited Partner agrees to execute such documents as a Transfer by Parent REIT may reasonably require in connection with the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number issuance of REIT Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterRedemption Right.
(c) In connection with an Notwithstanding the provisions of Sections 8.04(a) and 8.04(b) hereof, a Limited Partner shall not be entitled to exercise of the Redemption Right if the delivery of REIT Shares to such Limited Partner on the Specified Redemption Date by Parent REIT pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, 8.04(b) hereof (regardless of whether or not Parent REIT would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.04(b)) would (i) A written affidavitresult in such Limited Partner or any other Person (as defined in the Charter) owning, dated the same date as the Notice of Redemptiondirectly or indirectly, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Stock Ownership Limit or the Common Share Ownership any Excepted Holder Limit (oreach as defined in the Charter) and calculated in accordance therewith, if applicable except as provided in the Excepted Holder Limit);
Charter, (ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional result in REIT Shares prior being owned by fewer than 100 persons (determined without reference to the closing any rules of the Redemption on the Specified Redemption Date;
attribution), (iii) An undertaking result in Parent REIT being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause Parent REIT to certifyown, at and actually or constructively, 10% or more of the ownership interests in a tenant (other than a TRS) of Parent REIT’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause Parent REIT to fail to qualify as a condition to REIT under the closing of Code, or (vi) cause the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership acquisition of REIT Shares by the Tendering Party and such Limited Partner to be “integrated” with any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own other distribution of REIT Shares in violation or Common Units for purposes of complying with the registration provisions of the Aggregate Share Ownership Limit (orSecurities Act. Parent REIT, if applicablein its sole and absolute discretion, may waive the Excepted Holder Limitrestriction on redemption set forth in this Section 8.04(c); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Each Redeeming Limited Partner covenants and agrees that all Common Units tendered for redemption pursuant to this Section 8.04 will be delivered to the Partnership or Parent REIT free and clear of all liens, claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to such Common Units, neither the Partnership nor Parent REIT shall be under any obligation to acquire such Common Units pursuant to Section 8.04(a) or Section 8.04(b) hereof. Each Redeeming Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Units to the Partnership or Parent REIT, such Redeeming Limited Partner shall assume and pay such transfer tax.
(e) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 8.04 shall be paid on the Specified Redemption Date; provided, however, provided that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner Parent REIT to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Shares Amount to be issued or otherwisepaid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, the General Partner Parent REIT agrees to use its commercially reasonable efforts to cause the closing of the acquisition of Tendered redeemed Common Units hereunder to occur as quickly as reasonably possible.
(ef) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Redeeming Limited Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership, Parent REIT or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units, and such Redeeming Limited Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(g) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary or reasonable to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the foregoing, Partnership being treated as applicablea “publicly traded partnership” under Section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Alpine Income Property Trust, Inc.), Limited Partnership Agreement (Alpine Income Property Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.05(b), 8.05(c) and 8.05(e), and the provisions of any agreements agreement between the Partnership and one or more any Limited Partners Partner with respect to Partnership Common Units held by themsuch Limited Partner, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) “Redemption Right”), on or after the first anniversary of the issuance by the Partnership of any Common Units (the “Redemption Date”), to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the applicable Common Units held by such Partnership Units (Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerPartner and HHTI) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Partner”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner or HHTI elects to purchase the Common Units described in the Notice of Redemption pursuant to Section 8.05(b). A Tendering Party Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Units or, if such Limited Partner holds less than one thousand (1,000) Common Units, all of the Common Units held by such Partner.
(b) Notwithstanding the provisions of Section 8.05(a), a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Tendered Common Units described in the Notice of Redemption to the General Partner and HHTI, and the General Partner or HHTI may, in its sole and absolute discretion, elect to purchase assume directly and acquire such Tendered Units satisfy a Redemption Right within the maximum limits provided in Section 8.05(c) and minimum limits provided in Section 8.05(a) by paying to the Tendering Party either Redeeming Partner the Redemption Amount on the Specified Redemption Date, whereupon the General Partner or HHTI, as applicable, shall acquire the Common Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Units. If the General Partner or HHTI shall elect to exercise its right to purchase Common Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five (5) business days after the receipt by the General Partner and HHTI of such Notice of Redemption. Such notice shall indicate whether the General Partner or HHTI will pay the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether which determination shall be made by the General Partner has determined or HHTI in its sole discretion. Unless the applicable Partnership Units will be redeemed for REIT Shares General Partner or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if HHTI (i) it provides notice to the Partnership that it wishes to withdraw the request in its sole and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviserabsolute discretion) shall have the exercise its right to require purchase Common Units from the Partnership to redeem all or a portion of their Class E Units or Class I Units Redeeming Partner pursuant to this Section 8.5 at 8.05(b), the General Partner and HHTI shall not have any time irrespective of obligation to the period such Partnership Units have been held by the Special Limited Redeeming Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units with respect to the Redeeming Partner’s exercise of the Special Limited Partner or Redemption Right. In the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of event the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent HHTI shall exercise its right to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise satisfy the Redemption Right for less than 1,000 Partnership Units orin the manner described in the first sentence of this Section 8.05(b), if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, obligation to pay any amount to the Redeeming Partner with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Redeeming 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 the Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership, and the General Partner or HHTI, as applicable, shall treat the transaction shall be treatedbetween the General Partner or HHTI, as applicable, and the Redeeming Partner as a sale of the Redeeming Partner’s Common Units to the General Partner or HHTI, as applicable, for federal income tax purposes, as a Transfer by the Tendering Party of . Each Redeeming Partner agrees to execute such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(dc) Notwithstanding Sections 8.05(a) and 8.05(b), except as provided in Section 8.05(e), a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner or HHTI pursuant to Section 8.05(b) (regardless of whether or not the General Partner or HHTI would in fact exercise its rights under Section 8.05(b)) would (i) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the “Ownership Limit,” as defined in the Articles of Incorporation and calculated in accordance therewith, except as provided in the Articles of Incorporation, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in the Articles of Incorporation, (iii) result in HHTI being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause the General Partner or HHTI to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner’s, HHTI’s, the Partnership’s or the Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares by such Partner to be “integrated” with any other distribution of REIT Shares for purposes of complying with the registration provisions of the Securities Act of 1933, as amended. The General Partner or HHTI, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 8.05(c); provided, however, that in the event such restriction is waived, the Redeeming Partner shall be paid the Cash Amount. Any Cash Amount to be paid to a Tendering Party redeeming Limited Partner pursuant to Section 8.05(a) or this Section 8.5 8.05(c) shall be paid on within sixty (60) days after the Specified initial date of receipt by the Partnership, the General Partner and HHTI of the Notice of Redemption Daterelating to the Common Units to be redeemed; provided, however, that the General Partner such sixty (60) day period may elect to cause the Specified Redemption Date to be delayed extended for up to an additional 180 days one hundred eighty (180) day period to the extent required for the Partnership or Partnership, the General Partner and HHTI to obtain financing to be used to make such for the payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees Partner, HHTI and the Partnership agree to use commercially reasonable their best efforts to cause the closing of the acquisition of Tendered redeemed Common Units hereunder to occur as quickly as reasonably possible.
(d) Each certificate, if any, evidencing REIT Shares that may be issued in redemption of Common Units under this Section 8.05 (the “Redemption Shares”) shall bear a restrictive legend in substantially the following form: “The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, or any state securities law. No transfer of the Shares represented by this certificate shall be valid or effective unless (A) such transfer is made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”), or (B) the holder of the securities proposed to be transferred shall have delivered to the company either a no-action letter from the Securities and Exchange Commission or an opinion of counsel (who may be an employee of such holder) experienced in securities matters to the effect that such proposed transfer is exempt from the registration requirements of the Act which opinion shall be reasonably satisfactory to the Company.”
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (Notwithstanding any other than provisions of this Agreement, the terms of any separate written agreement between the Partnership and a Partner pertaining to redemption rights shall supersede the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise terms of Redemption Rights pursuant to this Section 8.58.05.
Appears in 2 contracts
Samples: Third Amended and Restated Agreement of Limited Partnership (Supertel Hospitality Inc), Third Amended and Restated Agreement of Limited Partnership (Supertel Hospitality Inc)
Redemption Right. If the Rio Tinto Members own, in the aggregate, less than five percent (a5%) Subject (subject to this Section 8.5 and adjustment to reflect any Units split or reverse Unit split, Unit distribution, Unit reclassification, recapitalization or similar event) of the provisions of any agreements between Initial Units, the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Company shall have the right to acquire by redemption all of the Common Membership Units held by the Rio Tinto Members (subject the "CPE Redemption Right") at a price to be paid by the Company equal to and in the form of the Cash Settlement. The Company shall exercise such right by giving written notice (the "CPE Redemption Notice") to the terms and conditions set forth herein) Rio Tinto Members with a copy to require CPE. The CPE Redemption Notice shall state that the Partnership Company intends to redeem (a “Redemption”) acquire by redemption all or a portion of such Partnership the Common Membership Units held by the Rio Tinto Members (the “Tendered "CPE Redeemed Units”") in exchange for REIT Shares issuable onand shall specify a date, which is not more than sixty (60) Business Days after delivery of the CPE Redemption Notice or as otherwise agreed between the Cash Amount payable onCompany and the Rio Tinto Members, or any combination thereof, on which date exercise of the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any CPE Redemption Right shall be exercised completed (the "CPE Redemption Date"). Unless CPE has assumed the rights and obligations of the Company with respect to the CPE Redemption Right pursuant to a Notice of Section 8.3(b), then, on the CPE Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if Date (i) it provides notice the Rio Tinto Members shall transfer and surrender to the Partnership Company the CPE Redeemed Units and represent and warrant to the Company that it wishes to withdraw the request CPE Redeemed Units are owned by the Rio Tinto Members free and clear of all liens and encumbrances and (ii) the Partnership receives Company shall (x) cancel the notice no less than two business days prior CPE Redeemed Units, (y) pay to the Specified Redemption Date. Notwithstanding Rio Tinto Members the foregoing, Cash Settlement to which the Special Limited Partner Rio Tinto Members are entitled under this Section 8.3(a) and (z) revise Exhibit A accordingly to reflect the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees cancellation of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I CPE Redeemed Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e8.3(a)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Liability Company Agreement (Cloud Peak Energy Inc.), Limited Liability Company Agreement (Cloud Peak Energy Inc.)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.04(b), 8.04(c), 8.04(d), 8.04(e) and 8.04(f) and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)Company, shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Redemption Amount to be paid by the Partnership, provided that such Partnership Units (shall have been outstanding for at least one year, and subject to any restriction agreed to in writing between the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by Redeeming Limited Partner and the General Partner in its sole discretion (a “Redemption Right”)or the Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party shall be deemed to have offered to sell ; provided, further, that the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner mayPartnership shall, in its sole and absolute discretion, elect have the option to purchase directly and acquire such Tendered Units by paying to the Tendering Party deliver either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a ; provided, further, that the Partnership shall not be obligated to satisfy such Redemption Right if the Company elects to purchase the Partnership Units subject to the Notice of Redemption; and provided, the Partnership will send to the further, that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Subject to the immediately succeeding sentence, a Limited Partner may not, without the consent of the General Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Units. If a Limited Partner holds less than 1,000 Partnership Units, such Limited Partner may, without the consent of the General Partner, exercise the Redemption Right for all of the Partnership Units held by such Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.04(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units and agrees by paying to acquire the Tendered Units for Redeeming Limited Partner either the Cash Amount or the REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 purposesAmount, as a Transfer elected by the Tendering Party of such Tendered Units to the General Partner Company (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party Company shall sell acquire the Partnership Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the Company shall elect to exercise its right to purchase Partnership Units under this Section 8.04(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Limited Partner within five Business Days after the receipt by the Company of such Notice of Redemption. In the event the Company shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner’s exercise of such Redemption Right, and each of the Tendered Redeeming Limited Partner, the Partnership and the Company shall treat the transaction between the Company and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner’s Partnership Units to the General Company. Each Redeeming Limited Partner agrees to execute such documents as the Company may reasonably require in exchange for a number connection with the issuance of REIT Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit Redemption Right.
(as calculated in accordance with the Charterc) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a8.04(a) and this Section 8.5(b8.04(b), the Tendering Parties a Limited Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the Company pursuant to this Section 8.5, 8.04(b) (regardless of whether or not the Tendering Party shall submit the following to the General Partner, Company would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.04(b)) would (i) A written affidavitresult in such Partner or any other person owning, dated the same date as the Notice of Redemptiondirectly or indirectly, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or Limitation (as defined in the Common Share Ownership Limit (orArticles of Incorporation) and calculated in accordance therewith, if applicable except as provided in the Excepted Holder Limit);
Articles of Incorporation, (ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional result in REIT Shares prior being owned by fewer than 100 persons (determined without reference to the closing any rules of the Redemption on the Specified Redemption Date;
attribution), (iii) An undertaking to certify, at and as a condition to result in the closing Company being “closely held” within the meaning of Section 856(h) of the Redemption on Code, (iv) cause the Specified Redemption DateCompany to own, that either directly or constructively, 10% or more of the ownership interests in a tenant of the Company’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, or (av) cause the actual and constructive ownership acquisition of REIT Shares by such Partner to be “integrated” with any other distribution of REIT Shares for purposes of complying with the Tendering Party registration provisions of the Securities Act of 1933, as amended (the “Securities Act”). The General Partner, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 8.04(c). The consummation of any Related Party remain unchanged from that disclosed redemption in the affidavit required by Section 8.5(c)(1) or (b) after giving effect exchange for REIT Shares shall be subject to the Redemption, neither the Tendering Party nor expiration or termination of any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirewaiting period under applicable law.
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 90 days to the extent required for the Partnership or the General Partner Company to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C. If the Partnership, the Company or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units, and the Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” taxable as a corporation under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which that states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Highland Hospitality Corp), Limited Partnership Agreement (Highland Hospitality Corp)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.4(b), 8.4(d), and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them8.4(g), each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Non-Managing Member shall have the right (subject to the terms and conditions set forth herein) “Redemption Right”), to require the Partnership Company to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Member Units held by such Partnership Units (Non-Managing Member at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable onto be paid by the Company, or any combination thereof, the provided that such Member Units shall have been outstanding for at least twelve months immediately prior to such Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership Company (with a copy to the General PartnerCorporate Manager) by the Limited Partner Non-Managing Member who is exercising the Redemption Right (the “Tendering PartyRedeeming Member”). A Tendering Party ; provided, however, that the Company shall not be deemed obligated to have offered satisfy such Redemption Right if the Corporate Manager elects to sell purchase the Tendered Member Units described in subject to the Notice of Redemption to the General Partner Redemption; and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, Non-Managing Member may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, Non-Managing Member may not exercise the Redemption Right for less than 1,000 Partnership 5,000 Member Units or, if such Limited Partner Non- Managing Members holds less than 1,000 Partnership 5,000 Member Units, all of the Partnership Member Units held by such PartnerMember. The Tendering Party Redeeming Member shall have no right, with respect to any Partnership Member Units so redeemed, to receive any distribution paid with respect to Partnership Member Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General Partner elects provisions of Section 8.4(a), a Non-Managing Member that exercises the Redemption Right shall be deemed to assume have offered to sell the obligation from Member Units described in the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares Notice of Redemption to the Tendering Party pursuant Corporate Manager, and the Corporate Manager may, in its sole and absolute discretion, elect to purchase directly and acquire such Member Units by paying to the terms set forth in this Section 8.5(b), in which case, (i) Redeeming Member either the General Partner, acting as a distinct legal entity, shall assume directly Cash Amount or 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 purposesCorporate Shares Amount, as a Transfer elected by the Tendering Party of such Tendered Units to the General Partner Corporate Manager (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party Corporate Manager shall sell acquire the Member Units offered for redemption by the Redeeming Member and shall be treated for all purposes of this Agreement as the owner of such number Member Units. If the Corporate Manager shall elect to exercise its right to purchase Member Units under this Section 8.4(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Member within five Business Days after the receipt by the Corporate Manager of such Notice of Redemption. In the event the Corporate Manager shall exercise its right to purchase Member Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 8.4(b), the Company shall have no obligation to pay any amount to the Redeeming Member with respect to such Redeeming Member’s exercise of such Redemption Right, and each of the Tendered Redeeming Member, the Company and the Corporate Manager shall treat the transaction between the Corporate Manager and the Redeeming Member for federal income tax purposes as a sale of the Redeeming Member’s Units to the General Partner Corporate Manager. Each Redeeming Member agrees to execute such documents as the Corporate Manager may reasonably require in exchange for connection with the issuance of Corporate Shares upon exercise of the Redemption Right. In the event the Corporate Manager elects to exercise its right to purchase Member Units of a number Person that is a Tax-Exempt Member as of REIT the date of this Agreement, by issuing the Corporate Shares Amount to such Redeeming Member as provided in this Section 8.4(b), then such Redeeming Member shall have the right (the “Put Right”) to require Holdco to purchase all or a portion of the Member Units held by such Redeeming Member at a redemption price equal to and in the product form of the REIT Shares Cash Amount and to be paid by Holdco on a Specified Redemption Date no later than 60 days following the Applicable Percentageexercise of the Put Right by the Redeeming Member; provided, however, that Holdco shall not be obligated to purchase more than seven per cent of the outstanding Member Units in any twelve-month period, absent the unanimous consent of Holdco’s members. The product Redeeming Member shall exercise the Put Right by notifying the Corporate Manager and Holdco within fifteen Business Days of receipt of the Applicable Percentage and notice from the REIT Corporate Manager of its election to purchase the Member Units by issuing the Corporate Shares Amount. If a Tax-Exempt Member exercises its Put Right pursuant to the preceding paragraph, if applicablethe Corporate Manager shall advise all the Tax-Exempt Members of the proposed exercise, and specify that any other Tax-Exempt Member that desires to exercise its Put Right at that time notify the Corporate Manager within 15 Business Days following the receipt of such notice. If at the end of such 15-Business Day period, less than seven per cent of the outstanding Member Units are the subject of a Put Right, the Corporate Manager shall be delivered facilitate the purchase by Holdco of the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated Member Units in accordance with the Charter) and other restrictions provided in previous paragraph. If more than seven per cent of the Article outstanding Member Units are the subject of Incorporationa Put Right at the end of such 15- Business Day period, the bylaws Corporate Manager shall inquire of Holdco if it is willing to waive the seven per cent cap, and if so, to what extent. If the waiver is sufficient to permit the purchase of all Member Units subject to a Put Right, the Corporate Manger shall facilitate the purchase by Holdco of the General PartnerMember Units in accordance with the previous paragraph. If there are more Member Units subject to the Put Right than Holdco is obligated or willing to purchase (because more than seven percent of the Member Units are subject to a Put Right, or because there are more Member Units than Holdco is willing to purchase above that amount), then Holdco shall acquire from each Tax-Exempt Member that indicated an intention to exercise its Put Right that number of Member Units determined by multiplying the number of such Tax-Exempt Member’s Member Units that are subject to a Put Right by a fraction, the Securities Act numerator of which is the number of Member Units that Holdco is obligated or willing to purchase, and relevant state securities or “blue sky” lawsthe denominator of which is the aggregate number of Member Units as to which Put Rights were requested. No Tendering Party whose Tendered Member Units that are acquired not redeemed in accordance with the preceding sentence shall be retained by the General Partner shall have any right applicable Tax-Exempt Member until such Tax-Exempt Member determines to cause transfer or require the General Partner dispose of such Member Units, including by exercise of its Redemption Right with respect to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) Member Units (and this Section 8.5(bPut Right, if applicable), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right Each Redeeming Member covenants and agrees that all Member Units (or Corporate Shares pursuant to Section 8.4(i) hereof) tendered for redemption pursuant to this Section 8.58.4 will be delivered to the Company, the Tendering Party shall submit the following to the General PartnerCorporate Manager or Holdco, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice case may be, free and clear of Redemptionall liens, claims, and encumbrances whatsoever, and should any such liens, claims or encumbrances exist or arise with respect to such Member Units (aor Corporate Shares pursuant to Section 8.4(i) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(hhereof), 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 none of the Aggregate Share Ownership Limit Company, the Corporate Manger or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor Holdco shall be under any Related Party has any intention obligation to acquire any additional REIT Shares prior such Member Units pursuant to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(18.4(a) or (bSection 8.4(b) after giving effect hereof or Corporate Shares pursuant to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(ivSection 8.4(i) Any other documents as the General Partner may reasonably requirehereof.
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Member pursuant to this Section 8.5 8.4 shall be paid on the Specified Redemption Date; provided, however, that the General Partner Corporate Manager may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner Corporate Manager to obtain cause additional Corporate Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares Amount and may also delay such Specified Redemption Date to be issued or otherwisethe extent necessary to effect compliance with applicable requirements of law. Notwithstanding the foregoing, the General Partner Corporate Manager agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Member Units (and Corporate Shares pursuant to Section 8.4(i)) hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall Corporate Manager is authorized to take any action that it determines to be necessary or appropriate to cause the Corporate Manager and the Company to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Member’s exercise of the Redemption Right.
(f) Notwithstanding any other provision of this Agreement, the Corporate Manager may place appropriate restrictions on the ability of the Limited Partners Members to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary or reasonable to ensure that the Partnership Company does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner Corporate Manager determines that imposing such restrictions is necessary, the General Partner Corporate Manager shall give prompt written notice thereof to each of the Limited Partners holding Partnership UnitsMember, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which Company that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the foregoingCompany being treated as a “publicly traded partnership” under Section 7704 of the Code.
(g) The exercise by Members of their Redemption Rights shall be subject to the provisions of Section 9.2(b). The rights provided by this Section 8.4 shall be in lieu of any rights provided to the Members under Wisconsin Statutes § 196.485(3m)(c)4.
(h) Notwithstanding any other provision of this Agreement, a Redeeming Member may expressly condition the effectiveness of any exercise of its Redemption Right, if such exercise will result in the issuance of Corporate Shares rather than the payment of cash, upon such Corporate Shares being included in a Registration Statement declared effective under the Securities Act and sold in an offering pursuant to that Registration Statement. If such Corporate Shares are not permitted to be included in a Registration Statement or are not sold in connection with a registered offering, the exercise of the Redemption Right shall be of no force or effect. If the Shares are not sold because they were withdrawn from a proposed offering as permitted by the third paragraph of Section 8.5(c), the Redeeming Member shall not be permitted to deliver another Notice of Redemption for one year from the withdrawal of the Member Units. The Corporate Manager and the Company shall cooperate with the Redeeming Member and any underwriter to facilitate the timely issuance of any Corporate Shares in any such registered offering.
(i) If a Non-Managing Member is to receive a Cash Amount for all or a portion of its Member Units hereunder, whether from the Company, the Corporate Manager or Holdco, it shall be obligated to tender a like percentage of any Corporate Shares held by it to the Corporate Manager (or Holdco, if the Cash Amount is paid pursuant to the third paragraph of Section 8.4(b)), which shall redeem or purchase each such Corporate Share for an amount equal to the Cash Amount for one Member Unit; provided that if the Corporate Manager is engaged in any activity outside of its ownership or management of the Company (other than pursuant to a management services or overhead sharing agreement with the manager of Holdco), the Non- Managing Member or purchaser may request that the redemption amount for the Corporate Shares be determined in accordance with the definition of Value. Such Non-Managing Member shall deliver to the Corporate Manager or Holdco, as applicable, any certificates evidencing its Corporate Shares, together with appropriate instruments of transfer.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Operating Agreement, Exchange Agreement
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)year, shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)) for the Cash Amount payable on the Specified Redemption Date. Notwithstanding the foregoing, the General Partner shall have the right but not the obligation, in its sole discretion, to elect to acquire any Tendered Units in exchange for a number of REIT Shares equal to the amount of such Tendered Units, in which case such REIT Shares shall be paid to the holder of such Tendered Units in lieu of the Cash Amount. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, Amount or a combination thereofacquired for REIT Shares. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e))Class E Units. No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, Partner other than the Special Limited Partner and the Adviser, Adviser may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, If the General Partner will elects to acquire any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterArticles of Incorporation) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterArticles of Incorporation.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(iA) A a written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(iiB) A 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;
(iiiC) An an undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(18.5(c)(A) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(ivD) Any any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, a holder of Partnership Units (i) shall not be entitled to effect a Redemption, whether for cash or an exchange for REIT Shares, to the General extent the ownership of or right to acquire REIT Shares pursuant to such exchange by such Partner shall place appropriate restrictions on the ability of the Limited Partners could cause such Partner or any other Person to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of violate the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Limit, or any Excepted Holder Limit, (b) the beneficial ownership of could cause the General Partner from being Partner’s common stock to be owned by less than 100 persons and persons, could cause the General Partner from being to be “closely held” within the meaning of Section section 856(h) of the Code, (c) as and if deemed necessary to ensure that or could cause the Partnership does not to constitute a “publicly traded partnership” under Section section 7704 of the Code, Code and (dii) shall have no rights under this Agreement to acquire REIT Shares which would otherwise be prohibited under the Partnership’s assets being considered “plan assets” with Charter. To the meaning of ERISA extent any attempted Redemption or any regulations proposed or promulgated thereunder, (e) the exchange for REIT Shares would be in violation of the Securities Act or other comparable state lawthis Section 8.5(e), (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice it shall be accompanied by a copy null and void ab initio and such holder of an opinion of counsel to the Partnership which states that, OP Units shall not acquire any rights or economic interest in the opinion of cash otherwise payable upon such counsel, restrictions are necessary in order to avoid Redemption or the foregoing, as applicableREIT Shares otherwise issuable upon such exchange.
(f) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Apollo Realty Income Solutions, Inc.), Limited Partnership Agreement (Apollo Realty Income Solutions, Inc.)
Redemption Right. (a) Subject On or after the date that is one year from the date of the issuance of an OP Unit or Units to this Section 8.5 a Limited Partner, subject to Sections 8.6(b) and the provisions of 8.6(c) hereof and any agreements separate agreement entered into between the Partnership and one or more a Limited Partners with respect to Partnership Units held by themPartner, each such Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such Partnership the OP Units (provided, that such OP Units constitute Common Units) held by such Limited Partner at a redemption price per OP Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership; provided that the foregoing limitation shall not affect the Limited Partner’s rights under Section 11.2(b) hereof. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the “Redeeming Partner”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the STAG REIT elects to purchase the OP Units subject to the Notice of Redemption pursuant to Section 8.6(b). A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) OP Units at any one time or, if such Limited Partner holds less than one thousand (1,000) OP Units, all of the “Tendering Party”OP Units held by such Partner. The Redeeming Partner shall have no right, with respect to any OP Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Any OP Units redeemed by the Partnership pursuant to this Section 8.6(a) shall be cancelled upon such redemption.
(b) Notwithstanding the provisions of Section 8.6(a). A Tendering Party , a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Tendered OP Units described in the Notice of Redemption to the General Partner STAG REIT, and the General Partner STAG REIT may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered OP Units by paying to the Tendering Party either the Cash Amount or Redeeming Partner the REIT Shares AmountAmount on the Specified Redemption Date, whereupon STAG REIT shall acquire the OP Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such OP Units. Within 15 days of receipt of If STAG REIT shall elect to exercise its right to purchase OP Units under this Section 8.6(b) with respect to a Notice of Redemption, it shall so notify the Partnership will send to Redeeming Partner within five (5) Business Days after the Limited Partner submitting the receipt by it of such Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for Redemption. Unless STAG REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request in its sole and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviserabsolute discretion) shall have the exercise its right to require purchase OP Units from the Partnership to redeem all or a portion of their Class E Units or Class I Units Redeeming Partner pursuant to this Section 8.5 at 8.6(b), STAG REIT shall not have any time irrespective of obligation to the period such Partnership Units have been held by the Special Limited Redeeming Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units with respect to the Redeeming Partner’s exercise of the Special Limited Partner or Redemption Right. In the Adviser for Class E event STAG REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E shall exercise its right to purchase OP Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent respect to the aggregate Net Asset Value exercise of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the a Redemption Right for less than 1,000 Partnership Units orin the manner described in the first sentence of this Section 8.6(b), if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, obligation to pay any amount to the Redeeming Partner with respect to any Partnership Units so redeemedsuch Redeeming Partner’s exercise of such Redemption Right, to receive any distribution paid with respect to Partnership Units if and each of the record date for such distribution is on or after Redeeming Partner, the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cashPartnership, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, and STAG REIT shall assume directly treat the obligation with respect thereto transaction between STAG REIT and shall satisfy the Tendering Party’s exercise of its Redemption Right, and (ii) such transaction shall be treatedRedeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner’s OP Units to the General STAG REIT. Each Redeeming Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects agrees to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making execute such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to require in connection with the issuance of REIT Shares upon exercise of the Redemption Right, including, if STAG REIT is relying upon the exemption from registration under the Securities Act provided by Regulation D promulgated under the Securities Act, or any successor rule, a Tendering Party document pursuant to this Section 8.5 shall be paid on which the Specified Redemption DateRedeeming Partner makes a representation that it is an accredited investor; provided, however, that if the General Redeeming Partner cannot make such representation, then the Redeeming Partner shall have no right to exercise its Redemption Right. In case of any reclassification of the REIT Shares (including, but not limited to, any reclassification upon a consolidation or merger in which STAG REIT is the continuing corporation) into securities other than REIT Shares, for purposes of this Section 8.6(b), STAG REIT may elect thereafter exercise its right to cause purchase OP Units for the kind and amount of shares of such securities receivable upon such reclassification by a holder of the number of REIT Shares for which such OP Units could be purchased pursuant to this Section immediately prior to such reclassification. Any REIT Shares issued to a Redeeming Partner upon the exercise by STAG REIT of its right to purchase OP Units under this Section 8.6(b), shall not be required to be registered under the Securities Act, unless subject to a separate agreement between STAG REIT and the Redeeming Partner.
(c) Notwithstanding the provisions of Section 8.6(a) and Section 8.6(b), a Partner shall not be entitled, except as otherwise provided in a written agreement between the Partner and the Partnership, to exercise the Redemption Right pursuant to Section 8.6(a) to the extent that the delivery of REIT Shares to such Partner on the Specified Redemption Date by STAG REIT pursuant to be delayed for up to an additional 180 days to the extent required for the Partnership Section 8.6(b) (regardless of whether or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional not STAG REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to would in fact exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” its rights under Section 7704 of the Code, (d8.6(b)) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and would (i) be prohibited under the Charter; (ii) require registration under the Securities Act; (iii) cause STAG REIT to no longer qualify as a non-exempt prohibited transaction REIT under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicableCode; or (iv) otherwise violate any applicable laws or regulations.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Agreement of Limited Partnership (STAG Industrial, Inc.), Agreement of Limited Partnership (STAG Industrial, Inc.)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them8.6.C, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Partnership Units subject to the Notice of Redemption pursuant to Section 8.6.B. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Partnership Units, all of the “Tendering Party”)Partnership Units held by such Partner. A Tendering Party The Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any Partnership distributions paid on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
B. Notwithstanding the provisions of Section 8.6.A, a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Tendered Partnership Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Partnership Units by paying to the Tendering Party Redeeming Partner either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether as elected by the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request in its sole and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(eabsolute discretion)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, whereupon the Tendering Party General Partner shall sell acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five (5) Business Days after the receipt by the General Partner of such Notice of Redemption. Unless the General Partner (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to its right to purchase Partnership Units under this Section 8.6.B, the General Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of the Tendered Redemption Right. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Partnership Units to the General Partner. Each Redeeming Partner in exchange for a number of REIT Shares equal agrees to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify execute such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(d) Any Cash Amount C. Notwithstanding the provisions of Section 8.6.A and Section 8.6.B, a Partner shall not be entitled to be paid to a Tendering Party exercise the Redemption Right pursuant to this Section 8.5 shall be paid 8.6.A if the delivery of REIT Shares to such Partner on the Specified Redemption Date; provided, however, that Date by the General Partner may elect pursuant to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership Section 8.6.B (regardless of whether or not the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to would in fact exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” its rights under Section 7704 of the Code, (d8.6.B) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company would be prohibited under the Investment Company Act, (g) the registration Articles of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicableIncorporation.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Boddie Noell Properties Inc), Limited Partnership Agreement (Fac Realty Inc)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B and the provisions of 8.6.C hereof and on or after such date, if any, as expressly provided for in any agreements agreement entered into between the Partnership and one or more any Limited Partners with respect to Partnership Units held by themPartner, each Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Company) shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units (provided that such Partnership Units (constitute Common Units) held by such Limited Partner at a redemption price per Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership; provided that the Partnership Units shall have been outstanding for at least one year. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the Redemption Right redemption right (the “Tendering PartyRedeeming Partner”). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the Company elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption pursuant to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Section 8.6.B. A Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units at any one time or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Any Partnership Units redeemed by the Partnership pursuant to this Section 8.6.A shall be cancelled upon such redemption.
B. Notwithstanding the provisions of Section 8.6.A, a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares Amount, as elected by the Company (b) in its sole and absolute discretion), on the Specified Redemption Date, whereupon the Company shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Company shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner elects within five Business Days after the receipt by it of such Notice of Redemption. Unless the Company (in its sole and absolute discretion) shall exercise its right to assume the obligation purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6.B, the Company shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner’s exercise of the Redemption Right. In the event the Company shall exercise its right to purchase Partnership Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Partner’s exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership and the Company shall treat the transaction shall be treatedbetween the Company and the Redeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner’s Partnership Units to the General Company. Each Redeeming Partner agrees to execute such documents as the Company may reasonably require in exchange for connection with the issuance of REIT Shares. The percentage Shares upon exercise of the Tendered Units tendered for Redemption by Right. In case of any reclassification of the Tendering Party for which the General Partner elects to issue REIT Shares (rather including, but not limited to, any reclassification upon a consolidation or merger in which the Company is the continuing corporation) into securities other than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered UnitsREIT Shares, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms for purposes of this Section 8.58.6.B, the General Partner will acquire any number of Tendered Company (or its Successor) may thereafter exercise its right to purchase Partnership Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell kind and amount of shares of such number securities receivable upon such reclassification by a holder of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal for which such Units could be purchased pursuant to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right this Section immediately prior to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. reclassification.
C. Notwithstanding the provisions of Section 8.5(a) 8.6.A and this Section 8.5(b)8.6.B, the Tendering Parties a Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following 8.6.A to the General Partner, extent that the delivery of REIT Shares to such Partner on the Specified Redemption Date by the Company pursuant to Section 8.6.B (regardless of whether or not the Company would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.6.B) would (i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownershipbe prohibited, as determined for purposes in the sole discretion of Code Sections 856(a)(6the Company, under the Charter or (ii) and 856(h), cause the acquisition of REIT Shares by (i) such Tendering Party and (ii) Partner to be “integrated” with any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership other distribution of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation for purposes of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” complying with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (NexPoint Residential Trust, Inc.), Limited Partnership Agreement (NexPoint Residential Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.6(b) and the provisions of 8.6(c) and on or after such date, if any, as expressly provided for in any agreements agreement entered into between the Partnership and one or more any Limited Partners with respect to Partnership Units held by themPartner, each Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Company) shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units (provided that such Partnership Units (constitute Common Units) held by such Limited Partner at a redemption price per Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the Redemption Right redemption right (the “Tendering PartyRedeeming Partner”). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the Company elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e8.6(b)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Partnership Units at any one time or, if such Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Any Partnership Units redeemed by the Partnership pursuant to this Section 8.6(a) shall be cancelled upon such redemption.
(b) Notwithstanding the provisions of Section 8.6(a), a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares Amount, as elected by the Company (in its sole and absolute discretion), on the Specified Redemption Date, whereupon the Company shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Company shall elect to exercise its right to purchase Partnership Units under this Section 8.6(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner elects within five (5) Business Days after the receipt by it of such Notice of Redemption. Unless the Company (in its sole and absolute discretion) shall exercise its right to assume the obligation purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6(b), the Company shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner’s exercise of the Redemption Right. In the event the Company shall exercise its right to purchase Partnership Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.6(b), then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Partner’s exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership and the Company shall treat the transaction shall be treatedbetween the Company and the Redeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner’s Partnership Units to the General Company. Each Redeeming Partner agrees to execute such documents as the Company may reasonably require in exchange for connection with the issuance of REIT Shares. The percentage Shares upon exercise of the Tendered Units tendered for Redemption by Right. In case of any reclassification of the Tendering Party for which the General Partner elects to issue REIT Shares (rather including any reclassification upon a consolidation or merger in which the Company is the continuing corporation) into securities other than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered UnitsREIT Shares, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms for purposes of this Section 8.58.6(b), the General Partner will acquire any number of Tendered Company (or its Successor) may thereafter exercise its right to purchase Partnership Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell kind and amount of shares of such number securities receivable upon such reclassification by a holder of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal for which such Units could be purchased pursuant to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit this Section immediately prior to such reclassification.
(as calculated in accordance with the Charterc) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a8.6(a) and this Section 8.5(b8.6(b), the Tendering Parties a Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following 8.6(a) to the General Partner, extent that the delivery of REIT Shares to such Partner on the Specified Redemption Date by the Company pursuant to Section 8.6(b) (regardless of whether or not the Company would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.6(b)) would (i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownershipbe prohibited, as determined for purposes in the sole discretion of Code Sections 856(a)(6the Company, under the Articles of Incorporation or (ii) and 856(h), cause the acquisition of REIT Shares by (i) such Tendering Party and (ii) Partner to be “integrated” with any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership other distribution of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation for purposes of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” complying with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Essential Properties Realty Trust, Inc.), Limited Partnership Agreement (Essential Properties Realty Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 7.07(b) and the provisions of any agreements other applicable agreement between the Partnership and one or more a Limited Partners with respect to Partnership Units held by themPartner, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) but not the obligation to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Units (Limited Partner at a redemption price per Common Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)Amount. Any The Redemption Right shall be exercised pursuant to a Notice one or more Notices of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner (or the Limited Partner’s attorney-in-fact) who is exercising the Redemption Right (the “Tendering PartyRedeeming Partner”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Common Units subject to the Notice of Redemption pursuant to Section 7.07(b). A Tendering Party Limited Partner may not exercise the Redemption Right for less than 10 Units or, if such Limited Partner holds less than 10 Units, all of the Units held by such Partner. The Redeeming Partner shall have no right, with respect to any Units so redeemed, to receive any Distributions paid after the Specified Redemption Date.
(b) Notwithstanding the provisions of Section 7.07(a), a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Tendered Common Units described in the Notice of Redemption to the General Partner Partner, and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either Redeeming Partner the Cash Redemption Amount on the Specified Redemption Date, whereupon the General Partner shall acquire the Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. Unless the General Partner shall exercise its right to purchase Units from the Redeeming Partner pursuant to this Section 7.07(b), the General Partner shall not have any obligation to the Redeeming Partner or the REIT Shares AmountPartnership with respect to the Redeeming Partner’s exercise of the Redemption Right. Within 15 days of receipt In the event the General Partner shall exercise its right to purchase Units with respect to the exercise of a Notice Redemption Right in the manner described in the first sentence of Redemptionthis Section 7.07(b), the Partnership will send shall have no obligation to pay any amount to the Limited Redeeming Partner submitting with respect to such Redeeming Partner’s exercise of such Redemption Right, and each of the Notice of Redemption a response stating whether Redeeming Partner, the Partnership and the General Partner has determined shall treat the applicable Partnership transaction between the General Partner and the Redeeming Partner as a sale of the Redeeming Partner’s Units to the General Partner for federal income tax purposes. Each Redeeming Partner agrees to execute such documents as the General Partner may reasonably require in connection with the issuance of REIT Shares upon exercise of the Redemption Right including, but not limited to, written representations as to tax or securities law matters, and any certificates representing such REIT Shares may bear legends regarding federal and state securities transfer restrictions and imposing reasonable requirements for any transfer.
(c) The General Partner shall at all times reserve and keep available for issuance upon the exercise of the Redemption Right such number of its authorized but unissued REIT Shares as will be redeemed for sufficient to permit the exercise in full of the Redemption Right by all holders of Units. All REIT Shares, when issued upon exercise of a Redemption Right, shall be duly and validly issued and fully paid and nonassessable, and not subject to preemptive rights.
(d) The Redemption Ratio is 1.0, subject to adjustments as follows:
(i) In case the General Partner shall (A) pay or make a dividend or other distribution on the outstanding REIT Shares in REIT Shares, (B) subdivide or reclassify the Cash Amountoutstanding REIT Shares into a greater number of REIT Shares, or (C) combine or reclassify the outstanding REIT Shares into a combination thereof. In either casesmaller number of REIT Shares, the Limited Partner Redemption Ratio in effect at the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution or subject to such subdivision, combination or reclassification shall be proportionately adjusted so that a holder of Units shall be entitled to withdraw receive, upon redemption thereof, the Notice number of Redemption if (i) it provides notice REIT Shares which the holder would have owned at the opening of business on the day following the date fixed for such determination had such Units been redeemed immediately prior to the Partnership that it wishes to withdraw the request and such determination.
(ii) In case the Partnership receives shall subdivide or reclassify the notice no outstanding Units into a greater number of Units, the Redemption Ratio in effect at the opening of business on the day following the date fixed for the determination of Unit holders subject to such subdivision or reclassification shall be proportionately adjusted so that a holder of Units shall be entitled to receive, upon redemption thereof, the number of REIT Shares which the holder would have owned at the opening of business on the day following the date fixed for such determination had such Units been redeemed immediately prior to such determination.
(iii) In case the General Partner (A) shall issue rights or warrants to all holders of REIT Shares entitling them to subscribe for or purchase REIT Shares at a price per share less than two business days prior the Current Market Price per REIT Share on the date fixed for the determination of shareholders entitled to the Specified Redemption Date. Notwithstanding the foregoingreceive such rights or warrants, the Special Limited Partner and the Adviser (B) shall not issue similar rights or warrants to all holders of Units entitling them to subscribe for or purchase RETT Shares or Units at a comparable price (determined, in the case of Partnership Units received Units, by reference to the Redemption Ratio), and (C) cannot issue such rights or warrants to a Person exercising a Redemption Right as otherwise required by the definition of REIT Shares Amount in consideration Section 1.04, then the Redemption Ratio in effect at the opening of business on the day following the date fixed for management feessuch determination shall be increased by multiplying such Redemption Ratio by a fraction of which the numerator shall be the number of REIT Shares outstanding at the close of business on the date fixed for such determination plus the number of REIT Shares so offered for subscription or purchase, and of which the denominator shall be the number of REIT Shares outstanding at the close of business on the date fixed for such determination plus the number of REIT Shares which the aggregate offering price of the total number of REIT Shares so offered for subscription would purchase at such Current Market Price per share, such increase of the Redemption Ratio to become effective immediately after the opening of business on the day following the date fixed for such determination.
(iv) In case the General Partner shall, by dividend or otherwise, distribute to all holders of its common stock (i) shares of capital stock of any class other than its common stock, (ii) evidences of its indebtedness or (iii) assets (excluding any rights or warrants referred to in subparagraph (iii) of this subsection (d), any cash dividend or distribution lawfully paid under the laws of the state of incorporation of the General Partner, and any dividend or distribution referred to in subsection (d)(i)) and the General Partner shall not cause a corresponding distribution to be made to all holders of Units, the Performance AllocationRedemption Ratio shall be adjusted so that the same shall equal the ratio determined by multiplying the Redemption Ratio in effect immediately prior to the close of business on the date fixed for the determination of shareholders entitled to receive such distribution by a fraction of which the numerator shall be the Current Market Price per REIT Share on the date fixed for such determination, and of which the denominator shall be such Current Market Price per REIT Share less the fair market value (as determined by the Board of Directors of the General Partner, whose determination shall be conclusive and described in a Board resolution certified by the Secretary of the General Partner and delivered to the holders of the Units) of the portion of the shares of capital stock or evidences of indebtedness or assets so distributed applicable to one REIT Share, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such distribution.
(v) In case of any reclassification of the REIT Shares (including, but not limited to, any reclassification upon a consolidation or merger in which the General Partner is the continuing corporation) into securities other than REIT Shares, the assignees Units shall thereafter be redeemable into the kind and amount of shares of such securities receivable upon such reclassification by a holder of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion number of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or into which such Units would be redeemable immediately prior to such reclassification.
(vi) For purposes of this subsection (d), if the Cash Amount (at General Partner receives consideration other than cash for any of its securities, the Adviser’s or Special Limited Partner’s election) unless value of such consideration is to be determined by the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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, reasonable business judgment and (ii) the basis for such transaction valuation shall be treated, for federal income tax purposes, as a Transfer by the Tendering Party of such Tendered Units to the General Partner included in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be certificate delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h5.03(c), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Duke Realty Limited Partnership/), Limited Partnership Agreement (Duke Realty Limited Partnership/)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.4(b), 8.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them8.4(d), each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Non-Managing Member shall have the right right, commencing on the third anniversary of the Operations Date (subject to the terms and conditions set forth herein) "Redemption Right"), to require the Partnership Company to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Member Units held by such Partnership Units (Non-Managing Member at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Company, provided that such Member Units shall have been outstanding for at least twelve months immediately prior to such third anniversary. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership Company (with a copy to the General PartnerCorporate Manager) by the Limited Partner Non-Managing Member who is exercising the Redemption Right (the “Tendering Party”"Redeeming Member"). A Tendering Party ; provided, however, that the Company shall not be deemed obligated to have offered satisfy such Redemption Right if the Corporate Manager elects to sell purchase the Tendered Member Units described in subject to the Notice of Redemption to the General Partner Redemption; and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, Non-Managing Member may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, Non-Managing Member may not exercise the Redemption Right for less than 1,000 Partnership 5,000 Member Units or, if such Limited Partner Non-Managing Members holds less than 1,000 Partnership 5,000 Member Units, all of the Partnership Member Units held by such PartnerMember. The Tendering Party Redeeming Member shall have no right, with respect to any Partnership Member Units so redeemed, to receive any distribution paid with respect to Partnership Member Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General Partner elects provisions of Section 8.4(a), a Non-Managing Member that exercises the Redemption Right shall be deemed to assume have offered to sell the obligation from Member Units described in the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares Notice of Redemption to the Tendering Party pursuant Corporate Manager, and the Corporate Manager may, in its sole and absolute discretion, elect to purchase directly and acquire such Member Units by paying to the terms set forth in this Section 8.5(b), in which case, (i) Redeeming Member either the General Partner, acting as a distinct legal entity, shall assume directly Cash Amount or 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 purposesCorporate Shares Amount, as a Transfer elected by the Tendering Party of such Tendered Units to the General Partner Corporate Manager (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party Corporate Manager shall sell acquire the Member Units offered for redemption by the Redeeming Member and shall be treated for all purposes of this Agreement as the owner of such number Member Units. If the Corporate Manager shall elect to exercise its right to purchase Member Units under this Section 8.4(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Member within five Business Days after the receipt by the Corporate Manager of such Notice of Redemption. In the event the Corporate Manager shall exercise its right to purchase Member Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 8.4(b), the Company shall have no obligation to pay any amount to the Redeeming Member with respect to such Redeeming Member's exercise of such Redemption Right, and each of the Tendered Redeeming Member, the Company and the Corporate Manager shall treat the transaction between the Corporate Manager and the Redeeming Member for federal income tax purposes as a sale of the Redeeming Member's Units to the General Partner Corporate Manager. Each Redeeming Member agrees to execute such documents as the Corporate Manager may reasonably require in exchange for a number connection with the issuance of REIT Corporate Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterRedemption Right.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Member pursuant to this Section 8.5 8.4 shall be paid on the Specified Redemption Date; provided, however, that the General Partner Corporate Manager may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner Corporate Manager to obtain cause additional Corporate Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner Corporate Manager agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Member Units hereunder to occur as quickly as reasonably possible.
(ed) Notwithstanding any other provision The exercise by Members of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights shall be subject to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning provisions of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under 9.2(c). The rights provided by this Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation 8.4 shall be in lieu of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel rights provided to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicableMembers under Wisconsin Statutes Section 196.485(3m)(c)4.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Operating Agreement (Wisconsin Public Service Corp), Operating Agreement (Alliant Energy Corp)
Redemption Right. (a) Subject to this Section 8.5 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themPartners, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Stirling OP Limited Partner in its sole discretion)LLC, shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Common Partnership Units held by such Limited Partner (the “Tendered UnitsRedeeming Partner”) at a redemption price per Common Partnership Unit equal to and in exchange for REIT Shares issuable on, or the form of the Cash Amount payable on, or any combination thereof, to be paid by the Partnership on the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner, other than the Special Limited Partner exercising and the Advisor, may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, all of the “Tendering Party”Common Partnership Units held by such Partner. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date except as provided in Section 7.4(b). A Tendering Party shall be deemed Each Redeeming Partner agrees to have offered provide such representations and related indemnities regarding good and unencumbered title, and to sell the Tendered Units described in the Notice of Redemption to execute such documents, as the General Partner and the General Partner may, may reasonably require in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Dateconnection with any redemption. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) Advisor shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 7.4 at any time irrespective of the period such Partnership the Class E Units have been held by the Special Limited Partner or the AdviserAdvisor. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser Advisor for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at or the Adviser’s or Special Limited Partner’s election) REIT Common Shares Amount unless the Board of Directors of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for the REIT Common Shares Amount. No Limited Partner, other than the Special Limited Partner and the Advisor, may deliver more than two Notices of Redemption during each calendar year.
(b) Notwithstanding the provisions of Section 7.4(a), if a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT Common Shares Amount, as elected by the General Partner, as directed by the Company (in its sole and absolute discretion), on the Specified Redemption Date, provided that if the General Partner has not affirmatively notified the Redeeming Partner on or before one Business Day before the Specified Redemption Date that either the Partnership, the General Partner or its Affiliates will pay the Cash Amount then the General Partner shall be deemed to have elected, directly or through one or more Affiliates, to pay the REIT Common Shares Amount to the Redeeming Partner on the Specified Redemption Date, and the Company agrees that it will provide such REIT Common Shares on the Specified Redemption Date, subject to the other provisions of this Section 7.4. On any such election of the General Partner to assume and satisfy a Redemption Right, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion), shall exercise its right to assume and satisfy the Redemption Right, or unless the General Partner has been deemed to assume the Redemption Right as provided in this Section 7.4(b), neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner’s exercise of the Redemption Right. If the General Partner, as directed by the Company, shall exercise its right, or shall be deemed to have elected, to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), except as provided in the following paragraph, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner’s exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner’s Common Partnership Units to the Company or its Affiliates; provided that if the Redeeming Partner is redeeming all of its Common Partnership Units, the Partnership shall redeem any fractional Common Partnership Unit (constituting less than one Common Partnership Unit owned by the Redeeming Partner by paying the Cash Amount with respect to such fractional Common Partnership Unit to such Redeeming Partner. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of the Redemption Right, as provided above, should the General Partner, as directed by the Company elect, or be deemed to elect, to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company stockholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such stockholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by ten (10) days after stockholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained. If such stockholder approval is not obtained within one hundred thirty (130) days after such Common Partnership Units are presented for redemption or the stockholders have voted against the issuance of the REIT Common Shares and payment of the REIT Common Shares, the Partnership will distribute to the Redeeming Partner any distributions pursuant to Section 8.1 that were not made after the Specified Redemption Date with respect to the Common Partnership Units redeemed because of the provisions of Section 7.4(a), the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the earlier of (i) ten (10) days after stockholders have voted against the issuance of the REIT Common Shares, or (ii) one hundred thirty (130) days after such Common Partnership Units are presented for redemption, together with interest on such Cash Amount from the Specified Redemption Date to the date of payment at the rate equal to the lesser of (i) the Company’s annual dividend rate on REIT Common Shares for the twelve (12) month period prior to the Valuation Date and based upon the Cash Amount for Common Partnership Units redeemed, or (ii) eight percent (8%).
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall, to the fullest extent permitted by law, be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or Section 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, if any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as a REIT.
(f) (f) Notwithstanding anything to the contrary in Section 7.4(b), any Class E Units issued pursuant to Section 8.1(c) and any Class E Units issued in lieu of fees payable pursuant to the Advisory Agreement may, subject to any lock-up restrictions that may be set forth in a separate agreement relating to the issuance of such Class E Units, be redeemed for the Cash Amount of the redeemed Class E Units or, at the election of the holder of such Class E Units, an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Class E Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Agreement of Limited Partnership (Stirling Hotels & Resorts, Inc.), Contribution Agreement (Ashford Hospitality Trust Inc)
Redemption Right. (a) Subject to Sections 8.6(b) and 8.6(c) at any time on or after the later of (1) one year following the date on which the Company commences an ongoing private offering of REIT Shares and (2) one year following the date of the initial issuance thereof (which, in the event of the transfer of a Common Unit, shall be deemed to be the date that such Common Unit was issued to the original recipient thereof for purposes of this Section 8.5 and 8.6), the provisions holder of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner a Common Unit (if other than the General Partner), after holding including a holder of any Partnership LTIP Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)that are converted into Common Units, shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units (provided that such Partnership Units (constitute Common Units) held by such Limited Partner at a redemption price per Common Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right redemption right (the “Tendering PartyRedeeming Partner”). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the Company elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e8.6(b)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units at any one time or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Limited Partner. The Tendering Party Redeeming Partner shall have no right, right with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Any Partnership Units redeemed by the Partnership pursuant to this Section 8.6(a) shall be cancelled upon such redemption.
(b) Notwithstanding the provisions of Section 8.6(a), a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner the Redemption Amount in the form of the Cash Amount or the REIT Shares Amount, as elected by the Company (in its sole and absolute discretion), on the Specified Redemption Date, whereupon the Company shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Company shall elect to exercise its right to purchase Partnership Units under this Section 8.6(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner elects within five Business Days after the receipt by it of such Notice of Redemption. Unless the Company (in its sole and absolute discretion) shall exercise its right to assume the obligation purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6(b), the Company shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner’s exercise of the Redemption Right. In the event the Company shall exercise its right to purchase Partnership Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.6(b), then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Partner’s exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership and the Company shall treat the transaction shall be treatedbetween the Company and the Redeeming Partner, for U.S. federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner’s Partnership Units to the General Company. Each Redeeming Partner agrees to execute such documents as the Company may reasonably require in exchange for connection with the issuance of REIT Shares. The percentage Shares upon exercise of the Tendered Units tendered for Redemption by Right. In case of any reclassification of the Tendering Party for which the General Partner elects to issue REIT Shares (rather including, but not limited to, any reclassification upon a consolidation or merger in which the Company is the continuing corporation) into securities other than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered UnitsREIT Shares, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms for purposes of this Section 8.58.6(b), the General Partner will acquire any number of Tendered Company (or its successor) may thereafter exercise its right to purchase Partnership Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell kind and amount of shares of such number securities receivable upon such reclassification by a holder of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal for which such Units could be purchased pursuant to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit this Section 8.6(b) immediately prior to such reclassification.
(as calculated in accordance with the Charterc) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a8.6(a) and this Section 8.5(b8.6(b), the Tendering Parties a Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following 8.6(a) to the General Partner, extent that the delivery of REIT Shares to such Partner on the Specified Redemption Date by the Company pursuant to Section 8.6(b) (regardless of whether or not the Company would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.6(b)) would (i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownershipbe prohibited, as determined for purposes in the sole discretion of Code Sections 856(a)(6the Company, under the Charter or (ii) and 856(h), cause the acquisition of REIT Shares by (i) such Tendering Party and (ii) Partner to be “integrated” with any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership other distribution of REIT Shares by for purposes of complying with the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requireSecurities Act.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 Each Partner covenants and agrees that all Partnership Units delivered for redemption shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days delivered to the extent required for Partnership free and clear of all liens; and, notwithstanding anything contained herein to the contrary, the Partnership shall be under no obligation to acquire Partnership Units which are or the General may be subject to any liens. Each Partner to obtain financing to be used to make such payment further agrees that, if any state or local property transfer tax is payable as a result of the Cash Amounttransfer of its Partnership Units to the Partnership, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General such Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possibleshall assume and pay such transfer tax.
(e) Notwithstanding any other provision of If a Partner exercises its Redemption Right with respect to Class B Common Units pursuant to this AgreementSection 8.6 and the Company elects to purchase directly and acquire the same, the General Class B Common Units will automatically convert to Class A Common Units upon purchase and acquisition by the Company. If a Partner shall place appropriate restrictions on exercises its Redemption Right with respect to Class C Common Units pursuant to this Section 8.6 and the ability of Company elects to purchase directly and acquire the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limitsame, the Aggregate Share Ownership Limit and Class C Common Units will, in the Excepted Holder Limit, (b) the beneficial ownership discretion of the General Partner from being owned following direction and Partnership Board Approval, convert to Class A Common Units upon purchase and acquisition by less than 100 persons and the Company or at such time as the General Partner from being “closely held” within the meaning of Section 856(h) of the Codedetermines, (c) as and if deemed necessary to ensure that the following Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicableBoard Approval.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Nexpoint Diversified Real Estate Trust), Limited Partnership Agreement (Vinebrook Homes Trust, Inc.)
Redemption Right. A. Common Units.
(ai) Subject to Section 8.6.C and Section 11.6.E, at any time on or after one (1) year following the date of the initial issuance thereof (which, in the event of the transfer of a Common Unit, shall be deemed to be the date that the Common Unit was issued to the original recipient thereof for purposes of this Section 8.5 and 8.6), the provisions holder of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner a Common Unit (if other than the General PartnerManaging Member or any Subsidiary of the Managing Member), after holding including any Partnership LTIP Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)that are converted into Class A Units, shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership Company to redeem (such Common Unit, with such redemption to occur on the Specified Redemption Date and at a “Redemption”) all or a portion redemption price equal to and in the form of such Partnership Units (the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Company. Any such Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership Company (with a copy to the General PartnerManaging Member) by the Limited Partner holder of the Units who is exercising the Redemption Right (the “Tendering PartyRedeeming Member”). A Tendering Party shall be deemed Non-Managing Member may exercise the Redemption Right from time to have offered time, without limitation as to sell frequency, with respect to part or all of the Tendered Common Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoingowns, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held as selected by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines Non-Managing Member, provided, however, that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, a Non-Managing Member may not exercise the Redemption Right for less fewer than 1,000 Partnership one thousand (1,000) Common Units orof a particular class unless such Redeeming Member then holds fewer than one thousand (1,000) Common Units of that class, if such Limited Partner holds less than 1,000 Partnership Units, in which event the Redeeming Member must exercise the Redemption Right for all of the Partnership Common Units held by such Partner. The Tendering Party shall have no rightRedeeming Member in that class, and provided further that, with respect to a Non-Managing Member which is an entity, such Non-Managing Member may exercise the Redemption Right for fewer than one thousand (1,000) Common Units without regard to whether or not such Non-Managing Member is exercising the Redemption Right for all of the Common Units held by such Non-Managing Member as long as such Non-Managing Member is exercising the Redemption Right on behalf of one or more of its equity owners in respect of one hundred percent (100%) of such equity owners’ interests in such Non-Managing Member.
(ii) The Redeeming Member shall have no right with respect to any Partnership Common Units so redeemed, redeemed to receive any distribution distributions paid with in respect to Partnership of a Company Record Date for distributions in respect of Common Units if the record date for such distribution is on or after the Specified Redemption DateDate with respect to such Common Units.
(biii) The Assignee of any Non-Managing Member may exercise the rights of such Non-Managing Member pursuant to this Section 8.6, and such Non-Managing Member shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Non-Managing Member’s Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Non-Managing Member, the Cash Amount shall be paid by the Company directly to such Assignee and not to such Non-Managing Member.
(iv) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares Managing Member Entity provides notice to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. IfNon-Managing Members, pursuant to the terms of this Section 8.58.5.C hereof, the General Partner will acquire Redemption Right shall be exercisable, without regard to whether the Common Units have been outstanding for any number specified period, during the period commencing on the date on which the Managing Member Entity provides such notice and ending on the record date to determine stockholders eligible to receive such distribution or to vote upon the approval of Tendered Units for REIT Shares rather than such merger, sale or other extraordinary transaction (or, if no such record date is applicable, at least twenty (20) Business Days before the Cash Amountconsummation of such merger, on sale or other extraordinary transaction). If this subparagraph (iv) applies, the Specified Redemption Date, Date is the Tendering Party shall sell such number of date on which the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount Company and the Applicable Percentage. The product Managing Member receive notice of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5Right, the Tendering Party shall submit the following to the General Partner, in addition to rather than ten (10) Business Days after receipt of the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Liability Company Agreement (Nexpoint Diversified Real Estate Trust), Limited Liability Company Agreement (Jernigan Capital, Inc.)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.04(b), 8.04(c), 8.04(d), 8.04(e) and 8.04(f) and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themthem and any restriction agreed to in writing between the Redeeming Limited Partner and the General Partner or Partnership, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units (that have been held by such Limited Partner for at least one year at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Redemption Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party shall be deemed to have offered to sell ; provided, however, that the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner mayPartnership shall, in its sole and absolute discretion, elect have the option to purchase directly and acquire such Tendered Units by paying to the Tendering Party deliver either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a ; provided, further, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Partnership Units subject to the Notice of Redemption; and provided, the Partnership will send to the further, that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Subject to the immediately succeeding sentence, a Limited Partner may not, without the consent of the General Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Units. If a Limited Partner holds less than 1,000 Partnership Units, such Limited Partner may, without the consent of the General Partner, exercise the Redemption Right for all of the Partnership Units held by such Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to such Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Redemption Right of each Limited Partner shall be in addition to the Change of Control Redemption Right and none of the limitations set forth in Sections 8.04(b), 8.04(c), 8.04(d) and 8.04(f) shall apply to or limit the obligations of the Partnership or the rights of the Limited Partners under Section 7.01(e).
(b) If Notwithstanding the General provisions of Section 8.04(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Limited Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party General Partner shall sell acquire the Partnership Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.04(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Limited Partner within five Business Days after the receipt by the General Partner of such Notice of Redemption. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner’s exercise of such Redemption Right, and each of the Tendered Redeeming Limited Partner, the Partnership and the General Partner shall treat the transaction between the General Partner and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner’s Partnership Units to the General Partner. Each Redeeming Limited Partner in exchange for a number of REIT Shares equal agrees to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify execute such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 8.04(a) and 8.04(b), a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.04(b) (regardless of whether or not the General Partner would in fact exercise its rights under Section 8.04(b)) would (i) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the Ownership Limitation (as defined in the Articles of Incorporation) and calculated in accordance therewith, except as provided in the Articles of Incorporation, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), (iii) result in the General Partner being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause the General Partner to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, (v) cause any “eligible independent contractor” that operates a “qualified lodging facility” on behalf of a “taxable REIT subsidiary” of the General Partner (as such terms are defined in Section 856(d)(9)(A), Section 856(d)(9)(D) and Section 856(1) of the Code, respectively) to fail to qualify as such, or (vi) be likely to cause the acquisition of REIT Shares or Partnership Units by such Partner to be “integrated” with any other distribution of REIT Shares for purposes of complying with the registration provisions of the Securities Act. The General Partner, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 8.04(c). The consummation of any redemption in exchange for REIT Shares shall be subject to the expiration or termination of any waiting period under applicable law.
(d) Any Cash Amount or REIT Shares Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 90 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right or the Change in Control Redemption Right. If a Redeeming Limited Partner or Exercising Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right or the Change in Control Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C. If the Partnership or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s or Exercising Limited Partner’s exercise of the Redemption Right or the Change in Control Redemption Right, as the case may be and if the Redemption Amount (or the Cash Amount in the case of an exercise of the Change in Control Redemption Right) equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units. If, however, the Redemption Amount (or the Cash Amount in the case of an exercise of the Change in Control Redemption Right) is less than the Withheld Amount, the Redeeming Limited Partner or Exercising Limited Partner, as the case may be, shall not receive any portion of the Redemption Amount or Cash Amount and, the Redemption Amount or Cash Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units, and the Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” taxable as a corporation under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which that states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (MHI Hospitality CORP), Limited Partnership Agreement (MHI Hospitality CORP)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)year, shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)discretion. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e))Class I Units. No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, Partner other than the Special Limited Partner and the Adviser, Adviser may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterArticles of Incorporation) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterArticles of Incorporation.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii2) 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;
(iii3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv4) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner Partner’s common stock from being owned by less than 100 persons and persons, the General Partner from being “closely held” within the meaning of Section section 856(h) of the Code, (c) and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the foregoing, Partnership be treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Blackstone Real Estate Income Trust, Inc.), Limited Partnership Agreement (Blackstone Real Estate Income Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.05(b), 8.05(c), 8.05(d), and 8.05(e) and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units held by such Limited Partner at an exchange price equal to and in the form of the Cash Amount to be paid by the Partnership, provided that such Partnership Units (the “Tendered Units”) in exchange shall have been outstanding for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)at least one year. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising requesting redemption (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right (if the “Tendering Party”). A Tendering Party shall be deemed General Partner elects to have offered purchase the Partnership Units subject to sell the Tendered Units described in the Notice of Redemption pursuant to the General Partner Section 8.05(b); and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemedexchanged, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.05(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to whereupon the General Partner in shall acquire the Partnership Units offered for exchange for a number of REIT Shares equal to by the product of the REIT Shares Amount Redeeming Partner and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five Business Days after the receipt by the General Partner as duly authorizedof such Notice of Redemption. Unless the General Partner (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.05(b), validly issued, fully paid and non-assessable REIT Shares free the General Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance Redemption Right. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the Charter) and other restrictions provided exercise of a Redemption Right in the Article manner described in the first sentence of Incorporationthis Section 8.05(b), the bylaws Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner, as the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by case may be, shall treat the transaction between the General Partner, as the case may be, and the Redeeming Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any for federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise income tax purposes as a sale of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following Redeeming Partner's Partnership Units to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) case may be. Each Redeeming Partner agrees to execute such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.05(b) (regardless of whether or not the General Partner would in fact exercise its rights under Section 8.05(b)) would (i) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the Ownership Limitation (as defined in the Articles of Incorporation) and calculated in accordance therewith, except as provided in the Articles of Incorporation, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in the Articles of Incorporation, (iii) result in the General Partner being "closely held" within the meaning of Section 856(h) of the Code, (iv) cause the General Partner to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner's, the Partnership's, or a Subsidiary Partnership's, real property, within the meaning of Section 856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares by such Partner to be "integrated" with any other distribution of REIT Shares for purposes of complying with the registration provisions of the Securities Act of 1933, as amended (the "Securities Act"). The General Partner, in their sole and absolute discretion, may waive the restriction on exchange set forth in this Section 8.05(c); provided, however, that in the event such restriction is waived, the Redeeming Partner shall be paid the Cash Amount.
(d) Any Cash Amount to be paid to a Tendering Party an Redeeming Partner pursuant to this Section 8.5 8.05 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered exchanged Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “"publicly traded partnership” " under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a "Restriction Notice") to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea "publicly traded partnership" under section 7704 of the Code.
(f) A fee may The receipt of a request for redemption with respect to REIT Shares held by stockholders of the General Partner (a "REIT Notice") shall be charged (other than deemed to be a Notice of Redemption given by the General Partner to the Adviser, Special Limited Partner or their Affiliates) Partnership and an exercise of the Redemption Right with respect to a number of Partnership Units equal to the number of REIT Shares identified in the REIT Notice. With respect to any Redemption in connection with an exercise of Redemption Rights Right exercised by the General Partner pursuant to this Section 8.58.05(f), the General Partner will elect for payment of the Redemption Amount by the Partnership to the General Partner to be the Cash Amount.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Wells Timber Real Estate Investment Trust, Inc.), Limited Partnership Agreement (Wells Timber Real Estate Investment Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)discretion. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the each Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the such Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the a Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors Trustees of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Class I Units. For the avoidance of doubt, Partnership Units (received through the DRIP will not be subject to the satisfaction of the restrictions one-year holding period set forth in this Section 8.5(c) and Section 8.5(e)8.5(a). No Limited Partnerlimited partner, other than the a Special Limited Partner and or the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, Partner other than the a Special Limited Partner and or the Adviser, Adviser may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner (or, if applicable, the Adviser or a Special Limited Partner) elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such the applicable REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner (or, if applicable, the Adviser or a Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares AmountAmount (including the REIT Shares Amount applicable to Tendered Units which were issued in exchange for DST Interests in connection with the exercise of any FMV Purchase Option or FMV Real Estate Option), if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterDeclaration of Trust) and other restrictions provided in the Article Declaration of IncorporationTrust, the bylaws of the General Partner, and the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchangeAct. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterDeclaration of Trust.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, unless waived by the General Partner, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii2) 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;
(iii3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv4) Any other documents documents, representations and certifications as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner Partner’s common stock from being owned by less than 100 persons and persons, the General Partner from being “closely held” within the meaning of Section section 856(h) of the Code, (c) and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the foregoing, Partnership be treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A redemption fee may be charged (other than to the Adviser, a Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Blue Owl Real Estate Net Lease Trust), Limited Partnership Agreement (Blue Owl Real Estate Net Lease Trust)
Redemption Right. (a) Subject to this Section 8.5 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themPartners, each Limited Partner Partner, other than the General Ashford OP Limited Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)LLC, shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Common Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, to be paid by the Partnership. The Partnership shall have up to one (1) year (the "Payout Period") following exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who is exercising the redemption right (the "Redeeming Partner"). From and after the Specified Redemption Date, as determined the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner's exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company's annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner exercising may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, all of the “Tendering Party”)Common Partnership Units held by such Partner. A Tendering Party Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall be deemed have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have offered any right, with respect to sell any Common Partnership Units so redeemed, to receive any distributions paid after the Tendered Units described in the Notice of Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner and may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to purchase assume directly and acquire such Tendered Units satisfy a Redemption Right by paying to the Tendering Party Redeeming Partner either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or (i) the Cash Amount, as provided for in Section 7.4(a), or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoingREIT Common Shares Amount, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held as elected by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 directed by the Tendering Party of such Tendered Units to the General Partner Company (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, provided that the Tendering Party shall sell such number Company may defer payment of the Tendered Units to Cash Amount until the General Partner in exchange for a number of REIT Shares equal to the product end of the REIT Shares Payout Period described in Section 7.4(a) (in which case the Cash Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner bear interest as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated described in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b7.4(a)), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, howeverfurther, that the General Partner may elect Company may, if it has elected so to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by causing additional REIT Shares the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion) shall exercise its right to be issued or otherwise. Notwithstanding assume directly and satisfy the foregoingRedemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to use commercially reasonable efforts provide such representations and related indemnities regarding good title, and to cause execute such documents, as the closing Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the acquisition Redemption Right. If the Redemption Right is satisfied by the delivery of Tendered Units hereunder REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as quickly directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after such Common Partnership Units are presented for redemption. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as reasonably possibledirected by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Limited Partners Company to exercise their Redemption Rights continue to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) qualify as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicableREIT.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Ashford Hospitality Trust Inc), Limited Partnership Agreement (Ashford Hospitality Trust Inc)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)discretion. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special A Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by other than the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) Notwithstanding the foregoing, the Special Limited Partner, the Adviser and its Affiliates and officers and employees of the Advisor and its Affiliates shall have the right to require the Partnership to redeem all or a portion of their respective Class E Units pursuant to this Section 8.5 at any time irrespective of the period the Partnership Units have been held by them, subject to any separate lock-up restrictions with respect to the Sponsor Committed Amount. The Partnership shall redeem any such Class E Units of the Special Limited Partner, the Adviser and its Affiliates and officers and employees of the Adviser and its Affiliates for Class E REIT Shares or the Cash Amount (at such Person’s election) unless the Board of Directors of the General Partner determines that any such redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units will be redeemed for an amount of Class E REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Class E Units.
(c) If the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterArticles of Incorporation) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b8.5(c), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterArticles of Incorporation.
(cd) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii2) 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;
(iii3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the written affidavit or representation required by Section 8.5(c)(18.5(d)(1) or (b2) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv4) Any other documents as the General Partner may reasonably require.
(de) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(ef) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner Partner’s common stock from being owned by less than 100 persons and persons, the General Partner from being “closely held” within the meaning of Section section 856(h) of the Code, (c) and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the foregoing, Partnership be treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(fg) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (EQT Exeter Real Estate Income Trust, Inc.), Limited Partnership Agreement (EQT Exeter Real Estate Income Trust Inc.)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B and 8.6.C, on or after the provisions date one (1) year after the closing of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held initial public offering of REIT Shares by themthe Gables Trust, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right (if the “Tendering Party”). A Tendering Party shall be deemed Gables Trust and/or the General Partner elects to have offered purchase the Partnership Units subject to sell the Tendered Units described in the Notice of Redemption pursuant to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Section 8.6.B. A Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Partnership Units or, if such Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
(b) If B. Notwithstanding the General provisions of Section 8.6.A, a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership to redeem Tendered Units and agrees to acquire described in the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise Notice of its Redemption Right, and (ii) such transaction shall be treated, for federal income tax purposes, as a Transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage and the Gables Trust, and either of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects or the Gables Trust (or both) may, in its sole and absolute discretion, elect to issue purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares (rather than the Cash Amount) is referred to , as the “Applicable Percentage.” In making such election to acquire Tendered Units, elected by the General Partner shall act or the Gables Trust (in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party General Partner or the Gables Trust shall sell acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the General Partner and/or the Gables Trust shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, they shall so notify the Redeeming Partner within five Business Days after the receipt by the General Partner of such Notice of Redemption. Unless the General Partner and/or the Gables Trust (in their sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6.B, neither the General Partner nor the Gables Trust shall have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of the Tendered Redemption Right. In the event the General Partner or the Gables Trust shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner or the Gables Trust, as the case may be, shall treat the transaction between the General Partner or the Gables Trust, as the case may be, and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Partnership Units to the General Partner in exchange for a number of REIT Shares equal to or the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares AmountGables Trust, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) case may be. Each Redeeming Partner agrees to execute such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(d) Any Cash Amount C. Notwithstanding the provisions of Section 8.6.A and Section 8.6.B, a Partner shall not be entitled to be paid to a Tendering Party exercise the Redemption Right pursuant to this Section 8.5 shall be paid 8.6.A if the delivery of REIT Shares to such Partner on the Specified Redemption Date; provided, however, that Date by the General Partner may elect or the Gables Trust pursuant to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership Section 8.6.B (regardless of whether or not the General Partner to obtain financing to or the Gables Trust would in fact exercise its rights under Section 8.6.B) would be used to make such payment prohibited under the Declaration of Trust or would violate any federal or state securities laws.
D. In connection with a redemption by Gables Trust of any or all of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this AgreementGables Trust Series A Preferred Shares, the General Partner shall place appropriate restrictions on have the ability right to cause the Partnership to redeem all or a portion of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of Series A Preferred Units that the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of Gables Trust and/or the General Partner from being owned by less than 100 persons holds, and such redemption proceeds shall be distributed to the Gables Trust and/or the General Partner from being “closely held” within Partner, as applicable, pursuant to the meaning provisions of Section 856(h) 5.1(b).
E. In connection with a redemption by Gables Trust of any or all of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessaryGables Trust Series Z Preferred Shares, the General Partner shall give prompt written notice thereof have the right to each cause the Partnership to redeem all or a portion of the Limited Partners holding Partnership UnitsSeries Z Preferred Units that the Gables Trust and/or the General Partner holds, which notice and such redemption proceeds shall be accompanied by a copy of an opinion of counsel distributed to the Partnership which states that, in Gables Trust and/or the opinion of such counsel, restrictions are necessary in order to avoid the foregoingGeneral Partner, as applicable.
(f) A fee may be charged (other than , pursuant to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise provisions of Redemption Rights pursuant to this Section 8.55.1(c).
Appears in 2 contracts
Samples: Limited Partnership Agreement (Gables Realty Limited Partnership), Limited Partnership Agreement (Gables Residential Trust)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.05(b), 8.05(c), 8.05(d), and 8.05(e) and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units held by such Limited Partner at an exchange price equal to and in the form of the Cash Amount to be paid by the Partnership, provided that such Partnership Units (the “Tendered Units”) in exchange shall have been outstanding for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)at least one year. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising requesting redemption (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right (if the “Tendering Party”). A Tendering Party shall be deemed General Partner elects to have offered purchase the Partnership Units subject to sell the Tendered Units described in the Notice of Redemption pursuant to the General Partner Section 8.05(b); and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemedexchanged, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.05(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to whereupon the General Partner in shall acquire the Partnership Units offered for exchange for a number of REIT Shares equal to by the product of the REIT Shares Amount Redeeming Partner and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five Business Days after the receipt by the General Partner as duly authorizedof such Notice of Redemption. Unless the General Partner (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.05(b), validly issued, fully paid and non-assessable REIT Shares free the General Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance Redemption Right. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the Charter) and other restrictions provided exercise of a Redemption Right in the Article manner described in the first sentence of Incorporationthis Section 8.05(b), the bylaws Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner, as the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by case may be, shall treat the transaction between the General Partner, as the case may be, and the Redeeming Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any for federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise income tax purposes as a sale of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following Redeeming Partner's Partnership Units to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) case may be. Each Redeeming Partner agrees to execute such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.05(b) (regardless of whether or not the General Partner would in fact exercise its rights under Section 8.05(b)) would (i) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the Ownership Limitation (as defined in the Articles of Incorporation) and calculated in accordance therewith, except as provided in the Articles of Incorporation, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in the Articles of Incorporation, (iii) result in the General Partner being "closely held" within the meaning of Section 856(h) of the Code, (iv) cause the General Partner to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner's, the Partnership's, or a Subsidiary Partnership's, real property, within the meaning of Section 856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares by such Partner to be "integrated" with any other distribution of REIT Shares for purposes of complying with the registration provisions of the Securities Act of 1933, as amended (the "Securities Act"). The General Partner, in its sole and absolute discretion, may waive the restriction on exchange set forth in this Section 8.05(c); provided, however, that in the event such restriction is waived, the Redeeming Partner shall be paid the Cash Amount.
(d) Any Cash Amount to be paid to a Tendering Party an Redeeming Partner pursuant to this Section 8.5 8.05 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered exchanged Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “"publicly traded partnership” " under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a "Restriction Notice") to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea "publicly traded partnership" under section 7704 of the Code.
(f) A fee may The receipt of a request for redemption with respect to REIT Shares held by stockholders of the General Partner (a "REIT Notice") shall be charged (other than deemed to be a Notice of Redemption given by the General Partner to the Adviser, Special Limited Partner or their Affiliates) Partnership and an exercise of the Redemption Right with respect to a number of Partnership Units equal to the number of REIT Shares identified in the REIT Notice. With respect to any Redemption in connection with an exercise of Redemption Rights Right exercised by the General Partner pursuant to this Section 8.58.05(f), the General Partner will elect for payment of the Redemption Amount by the Partnership to the General Partner to be the Cash Amount.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Wells Timberland REIT, Inc.), Limited Partnership Agreement (Wells Timber Real Estate Investment Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 8.4 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a any combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 8.4 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner or the Adviser (or assignees of the Special Limited Partner or the Adviser, as the case may be). The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser (or assignees of the Special Limited Partner or the Adviser, as the case may be) for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or the Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e))Class E Units. No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner (or, if applicable, the Adviser or the Special Limited Partner) elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b8.4(b), in which case, (i) the 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 U.S. federal income tax purposes, as a Transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner (or, if applicable, the Adviser or the Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterDeclaration of Trust) and other restrictions provided in the Article Declaration of IncorporationTrust, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a8.4(a) and this Section 8.5(b8.4(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterDeclaration of Trust.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.58.4, unless waived by the General Partner, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(18.4(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 8.4 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the any applicable Excepted Holder Limit, (b) the beneficial ownership of the General Partner Partner’s common shares from being owned by less than 100 persons and persons, the General Partner from being “closely held” within the meaning of Section section 856(h) of the Code, (c) and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A redemption fee may be charged (other than to the Adviser, the Special Limited Partner or their respective Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.58.4.
Appears in 2 contracts
Samples: Limited Partnership Agreement (North Haven Net REIT), Limited Partnership Agreement (North Haven Net REIT)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.04(b) through (g), and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each them and any restriction agreed to in writing between the Redeeming Limited Partner other than and the General Partner, after holding any each Limited Partner, other than the Company or the General Partner, shall have the right (the “Redemption Right”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Partnership Units that have been held by such Limited Partner for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, lesser time as determined by the General Partner in its sole discretion (and absolute discretion) at a “redemption price equal to and in the form of the Redemption Right”)Amount to be paid by the Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party shall be deemed to have offered to sell ; provided, however, that the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner mayPartnership shall, in its sole and absolute discretion, elect have the option to purchase directly and acquire such Tendered Units by paying to the Tendering Party deliver either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a , provided, further, that the Partnership shall not be obligated to satisfy such Redemption Right if the Company elects to purchase the Partnership Units subject to the Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.04(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units and agrees by paying to acquire the Tendered Units for Redeeming Limited Partner either the Cash Amount or the REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 purposesAmount, as a Transfer may be elected by the Tendering Party of such Tendered Units to the General Partner Company (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party Company shall sell such number of acquire the Tendered Partnership Units to offered for redemption by the General Redeeming Limited Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered treated for all purposes of this Agreement as the owner of such acquired Partnership Units. If the Company shall elect to exercise its right to purchase Partnership Units under this Section 8.04(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Limited Partner within five Business Days after the receipt by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than such Notice of Redemption. In the Aggregate Share Ownership Limit (as calculated in accordance event the Company shall exercise its right to purchase Partnership Units with respect to the Charter) and other restrictions provided in the Article exercise of Incorporationa Redemption Right, the bylaws Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner’s exercise of such Redemption Right, and each of the General Redeeming Limited Partner, the Securities Act Partnership, the Company and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right treat the transaction between the Company and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner’s Partnership Units to cause or the Company. Each Redeeming Limited Partner agrees to execute such documents as the Company may reasonably require in connection with the General Partner to register or qualify such issuance of REIT Shares with any federal or state securities agency under upon exercise of the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterRedemption Right.
(c) In connection Notwithstanding the provisions of Sections 8.04(a) and 8.04(b), with respect to an exercise amount of Partnership Units owned by the Xxxxxxxx Group (as defined in the Declaration of the Redemption Right pursuant to this Section 8.5Trust) as of the date hereof which, if converted into REIT Shares, would not result in the Tendering Party shall submit Xxxxxxxx Group owning, directly or under applicable ownership attribution rules (as described in the following Declaration of Trust) applicable to the General PartnerXxxxxxxx Group, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit Limitation (as defined in the Declaration of Trust) applicable to the Xxxxxxxx Group (the “Direct Conversion Units”) or an amount that would cause the Common Share Ownership Limit Company to fail to qualify as a REIT under the Code, the Xxxxxxxx Group shall have the right to require the Partnership to redeem, on a date that is five Business Days after the Partnership’s receipt of a Notice of Redemption (or“Direct Conversion Units Redemption Date”), if applicable all or a portion of the Excepted Holder LimitDirect Conversion Units that have been held by the Xxxxxxxx Group for at least one year (or such lesser time as determined by the General Partner in its sole and absolute discretion) at a redemption price equal to and in the form of the REIT Shares Amount (determined by substituting “5” for “60” in the definition of Specified Redemption Date);
; provided, however, upon the Xxxxxxxx Group’s exercise of such right, it shall be deemed to have offered to sell the Direct Conversion Units described in the Notice of Redemption to the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Xxxxxxxx Group the REIT Shares Amount on the Direct Conversion Units Redemption Date, whereupon the Company shall acquire the Partnership Units offered for redemption by the Xxxxxxxx Group and shall be treated for all purposes of this Agreement as the owner of such acquired Partnership Units; provided, further, (i) the Xxxxxxxx Group may not exercise its right under this Section 8.04(c) to convert Direct Conversion Units into the REIT Shares Amount for an amount of Partnership Units less than an amount that would qualify as a “block transfer” within the meaning of Regulations Section 1.7704-1(e)(2), (ii) A written representation the number of Direct Conversion Units as to which the Xxxxxxxx Group has the rights provided in this Section 8.04(c) shall be reduced by the number of Partnership Units previously transferred (whether by sale, redemption or otherwise) by the Xxxxxxxx Group and (iii) the Xxxxxxxx Group may not exercise the right under this Section 8.04(c) if the Company determines that neither the Tendering Party nor exercise of such right would prevent the Company from qualifying as a REIT under the Code or would cause the Company to incur additional tax under Section 857 or 4981 of the Code. The rights provided in this Section 8.04(c) shall not be transferable. If the Company shall elect to exercise its right to purchase Partnership Units under this Section 8.04(c) with respect to such Notice of Redemption, it shall so notify the Xxxxxxxx Group within two Business Days after the receipt by the General Partner of such Notice of Redemption. In the event the Company shall exercise its right to purchase Partnership Units with respect to the exercise of such Redemption Right, the Partnership shall have no obligation to pay any Related Party has any intention amount to acquire any additional the Xxxxxxxx Group with respect to its exercise of such Redemption Right, and each of the Xxxxxxxx Group, the Partnership and the Company shall treat the transaction between the Company and the Xxxxxxxx Group for federal income tax purposes as a sale of the Xxxxxxxx Group’s Partnership Units to the Company. The Xxxxxxxx Group agrees to execute such documents as the Company may reasonably require in connection with the issuance of REIT Shares prior to the closing upon exercise of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requireRight.
(d) Any Cash Amount Notwithstanding the provisions of Sections 8.04(a), 8.04(b) and 8.04(c), a Limited Partner shall not be entitled to be paid exercise the Redemption Right if, in the case of Section 8.04(b), the delivery of REIT Shares to a Tendering Party pursuant to this Section 8.5 shall be paid such Partner on the Specified Redemption Date; provided, however, that Date by the Company pursuant to Section 8.04(b) (regardless of whether or not the General Partner may elect to cause would in fact exercise its rights under Section 8.04(b)) and, in the Specified Redemption Date to be delayed for up to an additional 180 days to case of Section 8.04(c), the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment delivery of the Cash Amount, by causing additional REIT Shares to be issued the Xxxxxxxx Group on the Direct Conversion Units Redemption Date by the Company pursuant to Section 8.04(c), would (i) result in such Partner or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this AgreementPerson owning, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to preventdirectly or indirectly, among other things, (a) any Person from owning shares REIT Shares in excess of the Common Share Ownership LimitLimitation (as defined in the Declaration of Trust and calculated in accordance therewith, except as provided in the Aggregate Share Ownership Limit and the Excepted Holder LimitDeclaration of Trust), (bii) the beneficial ownership of the General Partner from result in REIT Shares being owned by less fewer than 100 persons and (determined without reference to any rules of attribution), (iii) result in the General Partner from Company being “closely held” within the meaning of Section 856(h) of the Code, (civ) as and if deemed necessary cause the Company to ensure that own, directly or constructively, 10% or more of the Partnership does not constitute ownership interests in a “publicly traded partnership” under tenant of the Company’s, General Partner’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 7704 856(d)(2)(B) of the Code, or (dv) be likely to cause the Partnership’s assets being considered acquisition of REIT Shares by such Partner to be “plan assetsintegrated” with any other distribution of REIT Shares or Partnership Units for purposes of complying with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation registration provisions of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the . The General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, in its sole and absolute discretion, may waive the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, restriction on redemption set forth in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.58.04(d).
Appears in 2 contracts
Samples: Agreement of Limited Partnership (GMH Communities Trust), Limited Partnership Agreement (GMH Communities Trust)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount or partially for REIT Shares and partially for a Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Quarterly Allocation or the Year-End Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of IncorporationCharter, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder LimitLimit or the General Partner failing to qualify as a domestically controlled qualified investment entity, (b) the beneficial ownership of the General Partner REIT Shares from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the termination of the Partnership’s status as a partnership for tax purposes, (i) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (ij) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable. In addition to any other appropriate restrictions placed by the General Partner pursuant to this Section 8.5(e), no Tendering Party (including, without limitation, the Special Limited Partner and the Adviser) shall be entitled to consummate a Redemption if the ownership of or delivery of REIT Shares to such Tendering Party on the Specified Redemption Date by the General Partner would (i) cause the occurrence of any of the circumstances described in clauses (a) through (d) of the first sentence of this Section 8.5(e), (ii) cause the General Partner to own, actually or constructively, 10% or more of the ownership interests in a tenant (other than a tenant that is a “taxable REIT subsidiary” (as defined in Section 856(l) of the Code)) of the General Partner’s, the Partnership’s or a Subsidiary’s real property, within the meaning of Section 856(d)(2)(B) of the Code, or (iii) otherwise cause the General Partner to fail to qualify as a REIT under the Code, including, but not limited to, as a result of any “eligible independent contractor” (as defined in Section 856(d)(9)(A) of the Code) that operates a “qualified lodging facility” (as defined in Section 856(d)(9)(D) of the Code) or a “qualified health care property” (as defined in Section 856(e)(6)(D)(i) of the Code) on behalf of a “taxable REIT subsidiary” (as defined in Section 856(l) of the Code) failing to qualify as such. The General Partner, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 8.5(e), provided that the Tendering Party has submitted such information, certification or affidavit as the General Partner may reasonably require in connection with the application of the restrictions described in this Section 8.5(e). To the extent any attempted Redemption or exchange for REIT Shares would be in violation of this Section 8.5(e), it shall be null and void ab initio and such Tendering Party shall not acquire any rights or economic interest in any Cash Amount otherwise payable upon such Redemption or the REIT Shares otherwise issuable upon such exchange.
(f) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
(g) Notwithstanding anything herein to the contrary, the provisions of this Section 8.5 shall not apply with respect to the Initial Class E Units, and instead the provisions of the JPM Sponsor Subscription Agreement shall govern with respect to redemptions of Initial Class E Units by the Partnership.
Appears in 2 contracts
Samples: Limited Partnership Agreement (J.P. Morgan Real Estate Income Trust, Inc.), Limited Partnership Agreement (J.P. Morgan Real Estate Income Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of A. Except as otherwise set forth in any agreements separate agreement entered into between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each a Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (and subject to the terms and conditions set forth hereinherein or therein (including Section 11.3.E), on or after the date that is one (1) year after the later of (i) the date hereof and (ii) the date of the issuance of a Common Unit to a Limited Partner pursuant to Article 4 hereof), such Limited Partner (other than the Company or any Subsidiary of the Company) shall have the right (the “Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Limited Partner (such Common Units (the being hereafter referred to as “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable onAmount; unless the terms of this Agreement or a separate agreement entered into between the Partnership and the Holder of such Common Units expressly provide that such Common Units are not entitled to the Redemption Right. The Partnership may, in the General Partner’s sole and absolute discretion, redeem Tendered Units at the request of the Holder of such Common Units prior to the end of the applicable one (1) year period (or such other period as may be specified in any combination thereofseparate agreement entered into between the Partnership and a Limited Partner). Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the Holders of such Common Units, all Common Units shall be entitled to the Redemption Right. The Tendering Partner (as defined below) shall have no right, with respect to any Common Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right right (the “Tendering PartyPartner”). A Tendering Party The Cash Amount shall be deemed to have offered to sell the Tendered Units described payable in accordance with instructions set forth in the Notice of Redemption to the General Tendering Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use its commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible. Any Common Units redeemed by the Partnership pursuant to this Section 8.5A shall be cancelled upon such redemption.
B. Notwithstanding the provisions of Section 8.5A above, if a Limited Partner has delivered to the General Partner a Notice of Redemption then the Company may, in its sole and absolute discretion (esubject to Section 8.5D), elect to assume and satisfy the Partnership’s Redemption Right obligation and acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the Company so elects, the Tendering Partner shall sell the Tendered Units to the Company in exchange for the REIT Shares Amount. In such event, the Tendering Partner shall have no right to cause the Partnership to redeem such Tendered Units. The Company shall give such Tendering Partner written notice of its election on or before the close of business on the fifth Business Day after its receipt of the Notice of Redemption. The Tendering Partner shall submit (i) such information, certification or affidavit as the Company may reasonably require in connection with the application of the Ownership Limit to any such acquisition and (ii) such written representations, investment letters, legal opinions or other instruments necessary, in the Company’ view, to effect compliance with the Securities Act. The REIT Shares Amount, if applicable, shall be delivered as duly authorized, validly issued, fully paid and nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than those provided in the Articles of Incorporation or the Bylaws of the Company, the Securities Act, relevant state securities or blue sky laws and any applicable agreements with respect to such REIT Shares entered into by the Tendering Partner. Notwithstanding any delay in such delivery (but subject to Section 8.5D), the Tendering Partner shall be deemed the owner of such REIT Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date. In addition, the REIT Shares for which the Common Units might be exchanged shall also bear all legends deemed necessary or appropriate by the Company. Neither any Tendering Partner whose Tendered Units are acquired by the Company pursuant to this Section 8.5B, any Partner, any Assignee nor any other interested Person shall have any right to require or cause the Company 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 8.5B, with the Commission, with any state securities commissioner, department or agency, under the Securities Act or the Exchange Act or with any stock exchange; unless subject to a separate written agreement pursuant to which the Company has granted registration or similar rights to any such Person.
C. Each Tendering Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same. Each Tendering Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units to the General Partner (or its designee), such Tendering Partner shall assume and pay such transfer tax. Each Tendering Partner further agrees to pay to the Partnership the amount of any tax withholding due upon the redemption of Tendered Units and authorizes the Partnership to retain such portion of the Cash Amount as the Partnership reasonably determines is necessary to satisfy its tax withholding obligations. In the event the Company elects to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount, the Tendering Partner agrees to pay to the Company the amount of any tax withholding due upon the redemption of Tendered Units and, in the event the Tendering Partner has not paid or made arrangements satisfactory to the Company, in its sole discretion, to pay the amount of any such tax withholding prior to the Specified Redemption Date, the Company may elect to either cancel such exchange (in which case the Tendering Partner’s exercise of the Redemption Right will be null and void ab initio), satisfy such tax withholding obligation by retaining REIT Shares with a fair market value, as determined by the Company in its sole discretion, equal to the amount of such obligation or satisfy such tax withholding obligation using amounts paid by the Partnership, which amounts shall be treated as a loan by the Partnership to the Tendering Partner in the manner set forth in Section 5.1B.
D. Notwithstanding the provisions of Section 8.5A, Section 8.5B, Section 8.5C or any other provision of this Agreement, a Limited Partner (i) shall not be entitled to effect the Redemption Right for cash or an exchange for REIT Shares to the extent that (if the Company were to elect to acquire the Tendered Units for REIT Shares in accordance with Section 8.5B) the ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the Specified Redemption Date could cause such Partner or any other Person to violate the Ownership Limit and (ii) shall have no rights under this Agreement to acquire REIT Shares which would otherwise be prohibited under the Articles of Incorporation. To the extent any attempted redemption or exchange for REIT Shares would be in violation of this Section 8.5D, it shall be null and void ab initio and such Limited Partner shall not acquire any rights or economic interest in the cash otherwise payable upon such redemption or the REIT Shares otherwise issuable upon such exchange.
E. Notwithstanding anything in this Agreement to the contrary, until such time as the REIT Shares are listed or admitted to trading on any National Securities Exchange, a Limited Partner may specify in the Notice of Redemption that the exercise of its Redemption Right is contingent on such Limited Partner’s Common Units either (i) being redeemed by the Partnership for the Cash Amount or (ii) to the extent that the Company elects to acquire some or all of such Limited Partner’s Common Units in exchange for REIT Shares pursuant to Section 8.5B, being acquired by the Company in exchange for REIT Shares solely to the extent that those REIT Shares may then be redeemed by the Company pursuant to the Stockholder Redemption Plan, taking into account all other redemption requests submitted under the Stockholder Redemption Plan during the applicable redemption period. For the avoidance of doubt, in the case of (ii) above, if, taking into account all other redemption requests submitted under the Stockholder Redemption Plan during the applicable redemption period, the Company does not have sufficient funds available under the Stockholder Redemption Plan to redeem all of the REIT Shares to be issued in connection with the exercise of the Redemption Right by the Limited Partner, then the Company shall acquire a number of Common Units equal to the number of REIT Shares that may be redeemed under the Stockholder Redemption Plan in the applicable redemption period, and, with respect to the remaining Common Units, the Limited Partner may either withdraw its Notice of Redemption or request that the Company defer the acquisition of the remaining Common Units until future redemption periods to the extent the Company has sufficient funds available under the Stockholder Redemption Plan to redeem REIT Shares in such future redemption periods. Any redemptions of REIT Shares made pursuant to this Section 8.5E shall be made on a pro rata basis along with any pending or new requests received from the Company’s stockholders in any applicable redemption period, and shall be subject in all respects to the terms and limitations of the Stockholder Redemption Plan. In addition, to the extent that a Limited Partner elects to rely on this Section 8.5E, (i) the Notice of Redemption must be submitted to the Company at least fifteen (15) days prior to the end of a redemption period in order to be considered for redemption for such redemption period, and (ii) the “Specified Redemption Date” for purposes of the applicable Notice of Redemption shall be the date on which REIT Shares submitted for redemption by stockholders under the Stockholder Redemption Plan during the applicable redemption period are to be redeemed.
F. Notwithstanding anything herein to the contrary (but subject to Section 8.5D), with respect to any redemption or exchange for REIT Shares pursuant to this Section 8.5: (i) without the consent of the General Partner, each Limited Partner shall place appropriate restrictions on may effect the ability Redemption Right only one time in each fiscal quarter; (ii) without the consent of the General Partner, each Limited Partners to exercise their Partner may not effect the Redemption Rights to preventRight for less than 1,000 Common Units or, among other thingsif the Limited Partner holds less than 1,000 Common Units, (a) any Person from owning shares in excess all of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation Units held by such Limited Partner; (iii) without the consent of the General Partner, each Limited Partner may not effect the Redemption Right during the period after the Partnership Record Date with respect to a distribution and before the record date established by the Company for a distribution to its common stockholders of some or all of its portion of such distribution; (iv) the consummation of any redemption or exchange for REIT Shares shall be subject to the expiration or termination of the applicable waiting period, if any, under the Hxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended; and (v) each Tendering Partner shall continue to own all Common Units subject to any redemption or exchange for REIT Shares, and be treated as a Limited Partner with respect to such Common Units for all purposes of this Agreement, until such Common Units are either paid for by the Partnership pursuant to Section 8.5A hereof or transferred to the Company and paid for by the issuance of the REIT Shares, pursuant to Section 8.5B hereof on the Specified Redemption Date. Until a Specified Redemption Date, the Partnership, Tendering Partner shall have no rights as a stockholder of the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereofCompany with respect to such Tendering Partner’s Common Units.
G. All Common Units acquired by the Company pursuant to Section 8.5B hereof shall automatically, and (i) without further action required, be converted into and deemed to be Limited Partner Interests and held by the Company in its capacity as a non-exempt prohibited transaction under ERISA. If and when Limited Partner in the General Partnership.
H. In the event that the Partnership issues additional Partnership Interests to any Additional Limited Partner determines that imposing such restrictions is necessarypursuant to Section 4.2, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of make such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant revisions to this Section 8.58.5 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Park View OZ REIT Inc), Agreement of Limited Partnership (1st stREIT Office Inc.)
Redemption Right. (a) A. Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themthis Section 8.6., each Limited Partner Partner, other than the General any Post Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Redemption Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right redemption right (the “Tendering Party”"Redeeming Partner"). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Partnership Units or, if such Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such Limited Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Limited Partner's Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Redemption Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
(b) If B. Notwithstanding the provisions of Section 8.6.A, either of the General Partner elects or PPI may, in its sole and absolute discretion, assume directly and satisfy a Redemption Right by paying to assume the obligation from Redeeming Partner the Redemption Amount on the Specified Redemption Date, whereupon the General Partner or PPI, as the case may be, shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. In the event the General Partner or PPI shall exercise this right to redeem Tendered Units and agrees to acquire satisfy the Tendered Units for REIT Shares rather than cashRedemption Right in the manner described in the preceding sentence, then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Party’s to such Redeeming Partner's exercise of its the Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership and, as the case may be, the General Partner or PPI shall treat the transaction shall be treatedbetween the General Partner or PPI, as the case may be, and the Redeeming Partner as a sale of the Redeeming Partner's Partnership Units to the General Partner or PPI, as the case may be, for federal income tax purposes, as a Transfer by the Tendering Party of . Each Redeeming Partner agrees to execute such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner or PPI, as the case may be, may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) C. Notwithstanding any other provision of this AgreementSection 8.6, a Partner shall not be entitled to exercise the Redemption Right pursuant to Section 8.6.A if the delivery of REIT Shares to such Partner on the Specified Redemption Date would be prohibited under the Articles of Incorporation.
D. Notwithstanding any other provision of this Section 8.6, no Partner shall be entitled to exercise the Redemption Right pursuant to Section 8.6.A with respect to any Preferred Partnership Unit unless the General Partner shall place appropriate restrictions on has expressly granted to such Partner in the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, instrument designating such Preferred Partnership Units (a) any Person from owning shares in excess of the Common Share Ownership Limitor series or class thereof), the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of right to redeem such Preferred Partnership Units pursuant to Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the 8.6.A. Preferred Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice Units shall be accompanied by a copy of an opinion of counsel to the Partnership which states thatredeemed, if at all, only in the opinion of accordance with such counsel, restrictions redemption rights or options as are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) set forth with respect to a Redemption such Preferred Partnership Units (or class or series thereof) in connection with an exercise of Redemption Rights pursuant to this Section 8.5the instruments designating such Preferred Partnership Units (or class or series thereof).
Appears in 2 contracts
Samples: Limited Partnership Agreement (Post Apartment Homes Lp), Limited Partnership Agreement (Post Apartment Homes Lp)
Redemption Right. (a) Subject to this Section 8.5 and 8.05(c), on or after the provisions date that is one (1) year after the closing of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themInitial Offering, each Class A Limited Partner (other than the General Partner, after holding Partner and any Class B Limited Partner who becomes a Class A Limited Partner upon conversion of some or all of its Preferred Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Units) shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Common Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)Amount. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Class A Limited Partner who is exercising the Redemption Right (the “Tendering Party”"Redeeming Partner"). ; provided, however, that no Class A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption Limited Partner may deliver to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two (2) Notices of Redemption during each calendar year. A Limited Partner, other than the Special Class A Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than 1,000 one thousand (1,000) Common Partnership Units, all of the Common Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Common Partnership Units so redeemed, to receive any distribution paid with respect to Common Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this provisions of Section 8.5(b8.05(a), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act may, in its sole and absolute discretion, assume directly and satisfy a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant Redemption Right by paying to the terms of this Section 8.5, Redeeming Partner the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, Redemption Amount on the Specified Redemption Date, whereupon the Tendering Party General Partner shall sell acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Common Partnership Units. In the event the General Partner shall exercise its right to satisfy the Redemption Right in the manner described in the preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Partner's exercise of the Tendered Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner and the Redeeming Partner as a sale of such Partner's Common Partnership Units to the General Partner for federal income tax purposes. Each Redeeming Partner agrees to execute such documents as the Company may reasonably require in exchange for a number connection with the issuance of REIT Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterRedemption Right.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to The Partnership or the General Partner, in addition as the case may be, shall pay the Cash Amount to a Redeeming Partner as the Notice of Redemption:
Redemption Amount for such Partner if (i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), acquisition of REIT Shares by such Partner on the Specified Redemption Date would (iA) result in such Tendering Party and (ii) Partner or any Related Party and (b) representing thatother person owning, after giving effect to the Redemptiondirectly or indirectly, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share "Ownership Limit Limit," as defined in the Declaration of Trust and calculated in accordance therewith, except as provided in the Declaration of Trust, (B) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in the Declaration of Trust, (C) result in the Company being "closely held" within the meaning of Section 856(h) of the Code, (D) cause the Company to own, actually or constructively, 10% or more of the ownership interests in a tenant of the Company's or the Common Share Ownership Limit (orPartnership's real property, if applicable within the Excepted Holder Limit);
(iimeaning of Section 856(d)(2)(B) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on Code, or (E) cause the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership acquisition of REIT Shares by such Partner to be "integrated" with any other distribution of REIT Shares for purposes of complying with the Tendering Party and any Related Party remain unchanged from that disclosed in registration provisions of the affidavit required by Section 8.5(c)(1) Securities Act or (bii) after giving effect to the RedemptionPartnership or the General Partner, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner case may reasonably require.
(d) be, so elects in its sole discretion. Any Cash Amount to be paid to a Tendering Party Redeeming Partner pursuant to this Section 8.5 8.05 shall be paid on within sixty (60) days after the Specified initial date of receipt by the General Partner of the Notice of Redemption Daterelating to the Common Partnership Units to be redeemed; provided, however, that the General Partner such sixty (60) day period may elect to cause the Specified Redemption Date to be delayed extended for up to an additional 180 one hundred eighty (180) days to the extent required for the Partnership or the General Partner Company to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees and the Partnership agree to use commercially reasonable their best efforts to cause the closing of the acquisition of Tendered redeemed Common Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) Each certificate, if any, evidencing REIT Shares that may be issued in redemption of Common Partnership Units under this Section 8.05 shall bear a restrictive legend in substantially the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of following form: "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"), or other comparable any state securities law, . No transfer of the Shares represented by this certificate shall be valid or effective unless (fA) such transfer is made pursuant to an effective registration statement under the Act or (B) the registration holder of the Partnership as an investment securities proposed to be transferred shall have delivered to the company under either a no-action letter from the Investment Company Act, (g) the registration of the Partnership, the General Partner Securities and Exchange Commission or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel (who may be an employee of such holder) experienced in securities matters to the effect that such proposed transfer is exempt from the registration requirements of the Act which opinion shall be reasonably satisfactory to the company."
(e) The redemption rights of each Class B Limited Partner and each Class B Limited Partner who becomes a Class A Limited Partner upon conversion of some or all of its Preferred Partnership which states that, Units are set forth in the opinion separate Redemption and Registration Rights Agreement of such counsel, restrictions are necessary in order to avoid the foregoing, as applicableeven date herewith that is incorporated by reference into this Agreement.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Innkeepers Usa Trust/Fl), Limited Partnership Agreement (Innkeepers Usa Trust/Fl)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of A. Except as otherwise set forth in any agreements separate agreement entered into between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each a Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (and subject to the terms and conditions set forth hereinherein or therein, on or after the date that is 15 months from the date of issuance of a Common Unit to a Limited Partner, such Limited Partner (other than the Company or any Subsidiary of the Company) shall have the right (the “Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Limited Partner (such Common Units (the being hereafter referred to as “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable onAmount; unless the terms of this Agreement or a separate agreement entered into between the Partnership and the Holder of such Common Units expressly provide that such Common Units are not entitled to the Redemption Right. The Partnership may, in the General Partner’s sole and absolute discretion, redeem Tendered Units at the request of the Holder of such Common Units prior to the end of the applicable 15 month period (or such other period as may be specified in any combination thereofseparate agreement entered into between the Partnership and a Limited Partner). Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the Holders of such Common Units, all Common Units shall be entitled to the Redemption Right. The Tendering Partner (as defined below) shall have no right, with respect to any Common Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right right (the “Tendering PartyPartner”). A Tendering Party The Cash Amount shall be deemed to have offered to sell the Tendered Units described payable in accordance with instructions set forth in the Notice of Redemption to the General Tendering Partner and on the Specified Redemption Date. Any Common Units redeemed by the Partnership pursuant to this Section 8.5A shall be cancelled upon such redemption.
B. Notwithstanding the provisions of Section 8.5A above, if a Limited Partner has delivered to the General Partner a Notice of Redemption then the Company may, in its sole and absolute discretiondiscretion (subject to Section 8.5D), elect to purchase directly assume and satisfy the Partnership’s Redemption Right obligation and acquire such some or all of the Tendered Units by paying from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the Company so elects, the Tendering Partner shall sell the Tendered Units to the Tendering Party either the Cash Amount or Company in exchange for the REIT Shares Amount. Within 15 days of receipt of a Notice of RedemptionIn such event, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Tendering Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice have no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require cause the Partnership to redeem all such Tendered Units. The Company shall give such Tendering Partner written notice of its election on or a portion before the close of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective business on the fifth Business Day after its receipt of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units Notice of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such PartnerRedemption. The Tendering Party Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, submit (i) such information, certification or affidavit as the General Partner, acting as a distinct legal entity, shall assume directly Company may reasonably require in connection with the obligation with respect thereto and shall satisfy application of the Tendering Party’s exercise of its Redemption Right, Ownership Limit to any such acquisition and (ii) such transaction shall be treatedwritten representations, for federal income tax purposesinvestment letters, as a Transfer by legal opinions or other instruments necessary, in the Tendering Party of such Tendered Units Company’ view, to effect compliance with the General Partner in exchange for REIT SharesSecurities Act. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions those provided in the Article of Incorporation, Charter or the bylaws Bylaws of the General PartnerCompany, the Securities Act and Act, relevant state securities or “blue sky” lawssky laws and any applicable agreements with respect to such REIT Shares entered into by the Tendering Partner. No Notwithstanding any delay in such delivery (but subject to Section 8.5D), the Tendering Party Partner shall be deemed the owner of such REIT Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date. In addition, the REIT Shares for which the Common Units might be exchanged shall also bear all legends deemed necessary or appropriate by the Company. Neither any Tendering Partner whose Tendered Units are acquired by the General Partner Company pursuant to this Section 8.5B, any Partner, any Assignee nor any other interested Person shall have any right to require or cause the Company to register, qualify or require the General Partner to register list any REIT Shares owned or qualify held by such Person, whether or not such REIT Shares are issued pursuant to this Section 8.5B, with the Commission, with any federal or state securities agency commissioner, department or agency, under the Securities Act or to list such REIT Shares on the Exchange Act or with any stock exchange; unless subject to a separate written agreement pursuant to which the Company has granted registration or similar rights to any such Person.
C. Each Tendering Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same. Each Tendering Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units, such Tendering Partner shall assume and pay such transfer tax. Each Tendering Partner further agrees to pay to the Partnership the amount of any tax withholding due upon the redemption of Tendered Units and authorizes the Partnership to retain such portion of the Cash Amount as the Partnership reasonably determines is necessary to satisfy its tax withholding obligations. In the event the Company elects to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount, the Tendering Partner agrees to pay to the Company the amount of any tax withholding due upon the redemption of Tendered Units and, in the event the Tendering Partner has not paid or made arrangements satisfactory to the Company, in its sole discretion, to pay the amount of any such tax withholding prior to the Specified Redemption Date, the Company may elect to either cancel such exchange (in which case the Tendering Partner’s exercise of the Redemption Right will be null and void ab initio), satisfy such tax withholding obligation by retaining REIT Shares with a fair market value, as determined by the Company in its sole discretion, equal to the amount of such obligation or satisfy such tax withholding obligation using amounts paid by the Partnership, which amounts shall be treated as a loan by the Partnership to the Tendering Partner in the manner set forth in Section 5.1B.
D. Notwithstanding the provisions of Section 8.5(a8.5A, Section 8.5B, Section 8.5C or any other provision of this Agreement, a Limited Partner (i) shall not be entitled to effect the Redemption Right for cash or an exchange for REIT Shares to the extent that (if the Company were to elect to acquire the Tendered Units for REIT Shares in accordance with Section 8.5B) the ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the Specified Redemption Date could cause such Partner or any other Person to violate the Ownership Limit and this Section 8.5(b), the Tendering Parties (ii) shall have no rights under this Agreement that to acquire REIT Shares which would otherwise be prohibited under the Charter. To the extent any attempted redemption or exchange for REIT Shares would be in violation of this Section 8.5D, it shall be null and void ab initio and such Limited Partner shall not acquire any rights or economic interest in the cash otherwise payable upon such redemption or the REIT Shares otherwise issuable upon such exchange.
E. Notwithstanding anything herein to the contrary (c) In connection but subject to Section 8.5D), with an exercise of the Redemption Right respect to any redemption or exchange for REIT Shares pursuant to this Section 8.5, : (i) without the Tendering Party shall submit the following to consent of the General Partner, in addition to each Limited Partner may not effect the Notice Redemption Right for less than 1,000 Common Units or, if the Limited Partner holds less than 1,000 Common Units, all of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares Common Units held by (i) such Tendering Party and Limited Partner; (ii) without the consent of the General Partner, each Limited Partner may not effect the Redemption Right during the period after the Partnership Record Date with respect to a distribution and before the record date established by the Company for a distribution to its common stockholders of some or all of its portion of such distribution; (iii) the consummation of any Related Party redemption or exchange for REIT Shares shall be subject to the expiration or termination of the applicable waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended; and (biv) representing thateach Tendering Partner shall continue to own all Common Units subject to any redemption or exchange for REIT Shares, after giving effect and be treated as a Limited Partner with respect to such Common Units for all purposes of this Agreement, until such Common Units are either paid for by the Partnership pursuant to Section 8.5A hereof or transferred to the Redemption, neither Company and paid for by the Tendering Party nor any Related Party will own REIT Shares in excess issuance of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (orREIT Shares, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention pursuant to acquire any additional REIT Shares prior to the closing of the Redemption Section 8.5B hereof on the Specified Redemption Date;
(iii) An undertaking to certify, at and as . Until a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership Tendering Partner shall have no rights as a stockholder of REIT Shares the Company with respect to such Tendering Partner’s Common Units.
F. All Common Units acquired by the Tendering Party Company pursuant to Section 8.5B hereof shall automatically, and any Related Party remain unchanged from that disclosed without further action required, be converted into and deemed to be Limited Partner Interests and held by the Company in its capacity as a Limited Partner in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirePartnership.
(d) Any Cash Amount G. In the event that the Partnership issues additional Partnership Interests to be paid to a Tendering Party any Additional Limited Partner pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement4.2, the General Partner shall place appropriate restrictions on the ability of the Limited Partners make such revisions to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of this Section 856(h) of the Code, (c) 8.5 as and if deemed it determines are necessary to ensure that reflect the issuance of such additional Partnership does not constitute a “publicly traded partnership” under Section 7704 of the CodeInterests; provided, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnershipthat, the General Partner may not make any revisions to this Section 8.5 that would prohibit the exercise of, or alter any Affiliate thereof (that is not already registered as an investment adviser under of the Advisers Act) as an investment adviser under material terms related to, the Advisers Act, (h) the violation of Redemption Right applicable to any law, rule, regulation existing Limited Partner unless such revisions are approved by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Easterly Government Properties, Inc.), Limited Partnership Agreement (Easterly Government Properties, Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units (other than Class B Units) for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)discretion. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e))Class I Units. No A Limited Partner, Partner other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, Adviser may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterArticles of Incorporation) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterArticles of Incorporation.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii2) 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;
(iii3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv4) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner Partner’s common stock from being owned by less than 100 persons and persons, the General Partner from being “closely held” within the meaning of Section section 856(h) of the Code, (c) and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the foregoing, Partnership be treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
(g) Except as otherwise agreed between a Class B Limited Partner and the General Partner, Class B Limited Partners may request redemption for cash of all or a portion of their Class B Units for any month by sending a Notice of Redemption to the Partnership within the same required period of notice that holders of REIT Shares may request the monthly repurchase of REIT Shares pursuant to the General Partner’s share repurchase plan, as in effect from time to time. Any Class B Units redeemed by the Partnership will be redeemed at the most recent Net Asset Value per Class B Unit (or 95% of the most recent Net Asset Value per Class B Unit for Class B Units redeemed within one year of issuance (other than Units issued pursuant to a distribution reinvestment or Class B Units held by the Special Limited Partner or the Adviser)) as of the date of redemption, effective on the same day that REIT Shares are repurchased for that month under the General Partner’s share repurchase plan. The total amount of redemptions of (i) Class B Units and (ii) Partnership Units with corresponding REIT Shares, will be subject to the same repurchase limitations as set forth in the General Partner’s share repurchase plan, except that such limitations will apply to such Partnership Units (including the Class B Units) instead of REIT Shares. The General Partner will be entitled to redeem up to the full amount of Partnership Units necessary to correspond to repurchases of REIT Shares under the General Partner’s share repurchase plan (subject to the repurchase limits of such share repurchase plan). If the General Partner repurchases less than the full amount of REIT Shares requested to be repurchased under the General Partner’s share repurchase plan in any month, then the percentage of outstanding Class B Units redeemed in such month shall not exceed the percentage of the aggregate NAV per REIT Share repurchased pursuant to the General Partner’s share repurchase plan for such month. In the event some but not all of the Class B Units submitted for redemption during any month are to be redeemed, the redemptions will be effected on a pro rata basis. Notwithstanding the foregoing, the Adviser will have the right to require the Partnership to redeem the full amount of its Class B Units without being subject to redemption limitations described herein.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Blackstone Real Estate Income Trust, Inc.), Limited Partnership Agreement (Blackstone Real Estate Income Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each A. Each Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Company) shall have the right (the “Redemption Right”) (subject to the terms and conditions set forth hereinherein and in any other such agreement, as applicable) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units of any Class held by such Partnership Limited Partner (such Common Units (the being hereafter referred to as “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable onAmount; provided, that the terms of such Common Units do not provide that such Common Units are not entitled to the Redemption Right. Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the Holders of such Common Units, all Common Units, including Wrap Class Units, Advisor Class Units and Institutional Class Units, shall be entitled to the Redemption Right. The Tendering Partner (as defined below) shall have no right, with respect to any combination thereofCommon Units of any Class so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right right (the “Tendering PartyPartner”). A Tendering Party The Cash Amount shall be deemed to have offered to sell the Tendered Units described payable in accordance with instructions set forth in the Notice of Redemption to the General Tendering Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If B. Each Limited Partner covenants and agrees with the General Partner elects to assume the obligation from the Partnership to redeem that all Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 delivered to the General Partner in exchange for REIT Shares. The percentage free and clear of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act be under no obligation to acquire the same. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number result of the transfer of its Tendered Units to the General Partner in exchange for a number of REIT Shares equal (or its designee), such Limited Partner shall assume and pay such transfer tax.
C. Notwithstanding anything herein to the product contrary, with respect to the redemption of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free Common Units of any pledge, lien, encumbrance or restrictionClass by a Limited Partner, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of IncorporationCompany, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit terms of the following to Common Units will include provisions as to: (i) how frequently the Limited Partner may redeem the Limited Partner’s Common Units without the consent of the General Partner; (ii) whether the General Partner may restrict redemptions, in addition due to a lack of liquidity at the Notice Partnership or otherwise; (iii) how many Common Units may be redeemed; and (iv) whether there will be any blackout periods where the Common Units may not be redeemed without the consent of Redemption:
(i) A written affidavitthe General Partner. Additionally, dated the same date as terms of the Notice of Redemption, Common Units will include provisions that: (a) disclosing the actual and constructive ownershipconsummation of any redemption shall be subject to the expiration or termination of the applicable waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, 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 amended; and (b) representing thateach Tendering Partner shall continue to own all Common Units subject to any redemption, after giving effect and be treated as a Limited Partner with respect to such Common Units for all purposes of this Agreement, until such Common Units are transferred to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption General Partner and paid for on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount D. In the event that the Partnership issues additional Partnership Interests to be paid to a Tendering Party any Additional Limited Partner pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement4.3, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by make such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant revisions to this Section 8.58.5 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Cole Real Estate Income Strategy (Daily Nav), Inc.), Limited Partnership Agreement (Cole Real Estate Income Strategy (Daily Nav), Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser Advisor (or in the case of the Partnership Units received in consideration for management fees, fees or the Performance Allocation, the assignees of the Special Limited Partner and or the AdviserAdvisor) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or P Units, Class I Units Units, or other Partnership Units, as applicable, pursuant to this Section 8.5 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner or the AdviserAdviser or their respective assignees. The Partnership shall redeem any such Class E Units or Class I Partnership Units of the Special Limited Partner or the Adviser Advisor for Class E REIT Shares or Class I equivalent class REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Partnership Units will be redeemed for an amount of Class E REIT Shares or Class I the equivalent class REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Notwithstanding the foregoing, the redemption of any Partnership Units by the Special Limited Partner or its assignee received in connection with the Performance Allocation will be subject to the limits set forth in the General Partner, ’s share repurchase plan as if such Partnership Units were REIT Shares; provided that such Partnership Units will not be subject to the Early Repurchase Deduction (as defined therein). A Limited Partner other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, Advisor may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner (or, if applicable, the Advisor or Special Limited Partner) elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner (or, if applicable, the Advisor or Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (aA) 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 (bB) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (aA) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (bB) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use its commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (ai) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (bii) the beneficial ownership of the General Partner REIT Shares from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (ciii) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (div) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (ev) the violation of the Securities Act or other comparable state law, (fvi) the registration of the Partnership as an investment company under the Investment Company Act, (gvii) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (hviii) the termination of the Partnership’s status as a partnership for tax purposes, (ix) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (ix) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Cohen & Steers Income Opportunities REIT, Inc.), Limited Partnership Agreement (Cohen & Steers Income Opportunities REIT, Inc.)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B and 8.6.C hereof, on or after the provisions date one (1) year after the closing of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held initial public offering of REIT Shares by themthe Company, each Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Company) shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price per Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right (if the “Tendering Party”). A Tendering Party shall be deemed Company elects to have offered purchase the Partnership Units subject to sell the Tendered Units described in the Notice of Redemption pursuant to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Section 8.6.B. A Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Partnership Units or, if such Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
B. Notwithstanding the provisions of Section 8.6.A, a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares Amount, as elected by the Company (b) in its sole and absolute discretion), on the Specified Redemption Date, whereupon the Company shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Company shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner elects within five Business Days after the receipt by it of such Notice of Redemption. Unless the Company (in its sole and absolute discretion) shall exercise its right to assume the obligation purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6.B, the Company shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner's exercise of the Redemption Right. In the event the Company shall exercise its right to purchase Partnership Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Party’s to such Redeeming Partner's exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction shall be treatedbetween the Company and the Redeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner's Partnership Units to the General Company. Each Redeeming Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects agrees to issue REIT Shares (rather than the Cash Amount) is referred to execute such documents as the “Applicable Percentage.” In making such election to acquire Tendered Units, Company may reasonably require in connection with the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number issuance of REIT Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Redemption Right.
C. Notwithstanding the provisions of Section 8.5(a) 8.6.A and this Section 8.5(b)8.6.B, the Tendering Parties a Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right pursuant to this Section 8.5, 8.6.A if the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), delivery of REIT Shares by (i) to such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption Partner on the Specified Redemption Date;
Date by the Company pursuant to Section 8.6.B (iiiregardless of whether or not the Company would in fact exercise its rights under Section 8.6.B) An undertaking to certify, at and as a condition to would be prohibited under the closing Articles of Incorporation of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requireCompany.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Contribution of Property and Sixth Amendment to Agreement of Limited Partnership (Beacon Properties L P), Contribution of Property and Sixth Amendment to Agreement of Limited Partnership (Beacon Properties Corp)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of Except as otherwise set forth in any agreements separate agreement entered into between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each a Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (and subject to the terms and conditions set forth hereinherein or therein, on or after the date that is twelve (12) months from the date of issuance of a Common Unit to a Limited Partner, such Limited Partner (other than the Company or any Subsidiary of the Company) shall have the right (the “Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Limited Partner (such Common Units (the being hereafter referred to as “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable onAmount; unless the terms of this Agreement or a separate agreement entered into between the Partnership and the Holder of such Common Units expressly provide that such Common Units are not entitled to the Redemption Right. The Partnership may, in the General Partner’s sole and absolute discretion, redeem Tendered Units at the request of the Holder of such Common Units prior to the end of the applicable twelve (12) month period (or such other period as may be specified in any combination thereofseparate agreement entered into between the Partnership and a Limited Partner). Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the Holders of such Common Units, all Common Units shall be entitled to the Redemption Right. The Tendering Partner (as defined below) shall have no right, with respect to any Common Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right right (the “Tendering PartyPartner”). A Tendering Party The Cash Amount shall be deemed to have offered to sell the Tendered Units described payable in accordance with instructions set forth in the Notice of Redemption to the General Tendering Partner and on the Specified Redemption Date. Any Common Units redeemed by the Partnership pursuant to this Section 8.5(a) shall be cancelled upon such redemption.
(b) Notwithstanding the provisions of Section 8.5(a) above, if a Limited Partner has delivered to the General Partner a Notice of Redemption then the Company may, in its sole and absolute discretiondiscretion (subject to Section 8.5(d)), elect to purchase directly assume and satisfy the Partnership’s Redemption Right obligation and acquire such some or all of the Tendered Units by paying from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the Company so elects, the Tendering Partner shall sell the Tendered Units to the Tendering Party either the Cash Amount or Company in exchange for the REIT Shares Amount. Within 15 days of receipt of a Notice of RedemptionIn such event, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Tendering Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice have no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require cause the Partnership to redeem all such Tendered Units. The Company shall give such Tendering Partner written notice of its election on or a portion before the close of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective business on the fifth Business Day after its receipt of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units Notice of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such PartnerRedemption. The Tendering Party Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, submit (i) such information, certification or affidavit as the General Partner, acting as a distinct legal entity, shall assume directly Company may reasonably require in connection with the obligation with respect thereto and shall satisfy application of the Tendering Party’s exercise of its Redemption Right, Ownership Limit to any such acquisition and (ii) such transaction shall be treatedwritten representations, for federal income tax purposesinvestment letters, as a Transfer by legal opinions or other instruments necessary, in the Tendering Party of such Tendered Units Company’s view, to effect compliance with the General Partner in exchange for REIT SharesSecurities Act. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions those provided in the Article of Incorporation, Charter or the bylaws Bylaws of the General PartnerCompany, the Securities Act and Act, relevant state securities or “blue sky” lawssky laws and any applicable agreements with respect to such REIT Shares entered into by the Tendering Partner. No Notwithstanding any delay in such delivery (but subject to Section 8.5(d)), the Tendering Party Partner shall be deemed the owner of such REIT Shares for all purposes, including rights to vote or consent, and receive dividends, as of the Specified Redemption Date. In addition, the REIT Shares for which the Common Units might be exchanged shall also bear all legends deemed necessary or appropriate by the Company. Neither any Tendering Partner whose Tendered Units are acquired by the General Partner Company pursuant to this Section 8.5(b), any Partner, any Assignee nor any other interested Person shall have any right to require or cause the Company to register, qualify or require the General Partner to register list any REIT Shares owned or qualify held by such Person, whether or not such REIT Shares are issued pursuant to this Section 8.5(b), with the Commission, with any federal or state securities agency commissioner, department or agency, under the Securities Act or to list such REIT Shares on the Exchange Act or with any stock exchange; unless subject to a separate written agreement pursuant to which the Company has granted registration or similar rights to any such Person.
(c) Each Tendering Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same. Each Tendering Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units to the General Partner (or its designee), such Tendering Partner shall assume and pay such transfer tax. Each Tendering Partner further agrees to pay to the Partnership the amount of any tax withholding due upon the redemption of Tendered Units and authorizes the Partnership to retain such portion of the Cash Amount as the Partnership reasonably determines is necessary to satisfy its tax withholding obligations. In the event the Company elects to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount, the Tendering Partner agrees to pay to the Company the amount of any tax withholding due upon the redemption of Tendered Units and, in the event the Tendering Partner has not paid or made arrangements satisfactory to the Company, in its sole discretion, to pay the amount of any such tax withholding prior to the Specified Redemption Date, the Company may elect to either cancel such exchange (in which case the Tendering Partner’s exercise of the Redemption Right will be null and void ab initio), satisfy such tax withholding obligation by retaining REIT Shares with a fair market value, as determined by the Company in its sole discretion, equal to the amount of such obligation or satisfy such tax withholding obligation using amounts paid by the Partnership, which amounts shall be treated as a loan by the Partnership to the Tendering Partner in the manner set forth in Section 5.1(b).
(d) Notwithstanding the provisions of Section 8.5(a) and this ), Section 8.5(b), Section 8.5(c) or any other provision of this Agreement, a Limited Partner (i) shall not be entitled to effect the Tendering Parties Redemption Right for cash or an exchange for REIT Shares to the extent that (if the Company were to elect to acquire the Tendered Units for REIT Shares in accordance with Section 8.5(b)) the ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the Specified Redemption Date could cause such Partner or any other Person to violate the Ownership Limit and (ii) shall have no rights under this Agreement that to acquire REIT Shares which would otherwise be prohibited under the Charter.
(c) In connection with an exercise of . To the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined extent any attempted redemption or exchange for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares would be in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 8.5(d), it shall be paid on null and void ab initio and such Limited Partner shall not acquire any rights or economic interest in the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership cash otherwise payable upon such redemption or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possibleotherwise issuable upon such exchange.
(e) Notwithstanding anything herein to the contrary (but subject to Section 8.5(d)), with respect to any other provision redemption or exchange for REIT Shares pursuant to this Section 8.5: (i) without the consent of the General Partner, each Limited Partner may effect the Redemption Right only one time in each fiscal quarter; (ii) without the consent of the General Partner, each Limited Partner may not effect the Redemption Right for less than 100% of their Common Units (provided that such prohibition shall not be applicable to Common Units issued to such Limited Partner as a result of the conversion of LTIP Units in accordance with the provisions of this Agreement); (iii) without the consent of the General Partner, each Limited Partner may not effect the Redemption Right during the period after the Partnership Record Date with respect to a distribution and before the record date established by the Company for a distribution to its common stockholders of some or all of its portion of such distribution; (iv) the consummation of any redemption or exchange for REIT Shares shall be subject to the expiration or termination of the applicable waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended; and (v) each Tendering Partner shall continue to own all Common Units subject to any redemption or exchange for REIT Shares, and be treated as a Limited Partner with respect to such Common Units for all purposes of this Agreement, until such Common Units are either paid for by the Partnership pursuant to Section 8.5(a) hereof or transferred to the Company and paid for by the issuance of the REIT Shares, pursuant to Section 8.5(b) hereof on the Specified Redemption Date. Until a Specified Redemption Date, the Tendering Partner shall have no rights as a stockholder of the Company with respect to such Tendering Partner’s Common Units.
(f) All Common Units acquired by the Company pursuant to Section 8.5(b) hereof shall automatically, and without further action required, be converted into and deemed to be Limited Partner Interests and held by the Company in its capacity as a Limited Partner in the Partnership.
(g) In the event that the Partnership issues additional Partnership Interests to any Additional Limited Partner pursuant to Section 4.2, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by make such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant revisions to this Section 8.58.5 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Curbline Properties Corp.), Limited Partnership Agreement (Curbline Properties Corp.)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B and 8.6.C hereof and the provisions of any agreements between the Partnership and one or more Limited Partners with respect Partners, at any time following an IPO Event and after the first anniversary date of the issuance of a Partnership Unit to Partnership Units held a Limited Partner pursuant to Article 4 hereof (or such other date as may be mutually agreed upon by themthe General Partner and a Limited Partner), each Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (Company or such shorter period as consented to by the General Partner in its sole discretion), wholly-owned Subsidiaries) shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Units (Limited Partner at a redemption price per Common Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Partner”). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the Company elects to sell purchase the Tendered Common Units described in subject to the Notice of Redemption pursuant to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Section 8.6.B. A Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership one thousand (1,000) Common Units or, if such Limited Partner holds less than 1,000 Partnership one thousand (1,000) Common Units, all of the Partnership Common Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Common Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
B. Notwithstanding the provisions of Section 8.6.A, upon an election by a Limited Partner to exercise the Redemption Right, the Company may, in its sole and absolute discretion (b) subject to the limitations on ownership and transfer of REIT Shares set forth in the Articles of Incorporation of the Company), elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either the Cash Amount or the REIT Shares Amount, as the Company determines in its sole and absolute discretion whereupon the Company shall acquire the Common Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Units. If the General Company shall elect to exercise its right to purchase Common Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner elects within five (5) Business Days after the receipt by it of such Notice of Redemption. Unless the Company shall exercise its right to assume the obligation purchase Common Units from the Redeeming Partner pursuant to this Section 8.6.B, the Company shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner’s exercise of the Redemption Right. In the event the Company shall exercise its right to purchase Common Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Partner’s exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction shall be treatedbetween the Company and the Redeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner’s Common Units to the General Company. Each Redeeming Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects agrees to issue REIT Shares (rather than the Cash Amount) is referred to execute such documents as the “Applicable Percentage.” In making such election to acquire Tendered Units, Company may reasonably require in connection with the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number issuance of REIT Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Redemption Right.
C. Notwithstanding the provisions of Section 8.5(a) 8.6.A and this Section 8.5(b)8.6.B, the Tendering Parties a Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right pursuant to this Section 8.5, 8.6.A if the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), delivery of REIT Shares by (i) to such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption Partner on the Specified Redemption Date;
Date by the Company pursuant to Section 8.6.B (iiiregardless of whether or not the Company would in fact exercise its rights under Section 8.6.B) An undertaking to certify, at and as a condition to would be prohibited under the closing Articles of Incorporation of the Company or prohibited under applicable federal or state securities laws or regulations.
D. If, pursuant to Section 8.6.B, the Company elects to pay the Redeeming Partner the Redemption on Amount in the Specified Redemption Dateform of REIT Shares, that either (a) the actual and constructive ownership total number of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to the Redeeming Partner in exchange for the Redeeming Partner’s Common Units shall be the applicable REIT Shares Amount. If this amount is not a Tendering Party pursuant to this Section 8.5 whole number of REIT Shares, the Redeeming Partner shall be paid on (i) that number of REIT Shares which equals the Specified Redemption Date; providednearest whole number less than such amount plus (ii) an amount of cash which the Company determines, howeverin its reasonable discretion, that to represent the fair value of the remaining fractional REIT Share which would otherwise be payable to the Redeeming Partner.
E. All Common Units delivered for redemption shall be delivered to the Partnership or the Company, as the case may be, free and clear of all liens and encumbrances, and notwithstanding anything contained herein to the contrary, neither the General Partner nor the Partnership shall be under any obligation to acquire Common Units which are or may elect be subject to cause liens. If any state or local property transfer tax is payable as a result of the Specified Redemption Date transfer of Common Units to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner pursuant to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoingRedemption Right, the General Redeeming Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possibleshall assume and pay such transfer tax.
(e) Notwithstanding any other provision of this AgreementF. In the event that the Partnership issues additional Partnership Interests pursuant to Section 4.2.A hereof, the General Partner shall place appropriate make such revisions to this Section 8.6 as it determines are necessary to reflect the issuance of such additional Partnership Interests (including setting forth any restrictions on the ability exercise of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) Right with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5such Partnership Interests).
Appears in 2 contracts
Samples: Limited Partnership Agreement (DiamondRock Hospitality Co), Limited Partnership Agreement (DiamondRock Hospitality Co)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B and 8.6.C, on or after the provisions date one (1) year after the closing of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held initial public offering of REIT Shares by themthe Gables Trust, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units held by such Limited Partner (other than Series B Preferred Units which such Units shall have only those Redemption Rights set forth in Exhibit F, attached hereto) at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right (if the “Tendering Party”). A Tendering Party shall be deemed Gables Trust and/or the General Partner elects to have offered purchase the Partnership Units subject to sell the Tendered Units described in the Notice of Redemption pursuant to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Section 8.6.B. A Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Partnership Units or, if such Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
(b) If B. Notwithstanding the General provisions of Section 8.6.A, a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership to redeem Tendered Units and agrees to acquire described in the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise Notice of its Redemption Right, and (ii) such transaction shall be treated, for federal income tax purposes, as a Transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage and the Gables Trust, and either of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects or the Gables Trust (or both) may, in its sole and absolute discretion, elect to issue purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares (rather than the Cash Amount) is referred to , as the “Applicable Percentage.” In making such election to acquire Tendered Units, elected by the General Partner shall act or the Gables Trust (in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party General Partner or the Gables Trust shall sell acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the General Partner and/or the Gables Trust shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, they shall so notify the Redeeming Partner within five Business Days after the receipt by the General Partner of such Notice of Redemption. Unless the General Partner and/or the Gables Trust (in their sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6.B, neither the General Partner nor the Gables Trust shall have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of the Tendered Redemption Right. In the event the General Partner or the Gables Trust shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner or the Gables Trust, as the case may be, shall treat the transaction between the General Partner or the Gables Trust, as the case may be, and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Partnership Units to the General Partner in exchange for a number of REIT Shares equal to or the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares AmountGables Trust, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) case may be. Each Redeeming Partner agrees to execute such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(d) Any Cash Amount C. Notwithstanding the provisions of Section 8.6.A and Section 8.6.B, a Partner shall not be entitled to be paid to a Tendering Party exercise the Redemption Right pursuant to this Section 8.5 shall be paid 8.6.A if the delivery of REIT Shares to such Partner on the Specified Redemption Date; provided, however, that Date by the General Partner may elect or the Gables Trust pursuant to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership Section 8.6.B (regardless of whether or not the General Partner to obtain financing to or the Gables Trust would in fact exercise its rights under Section 8.6.B) would be used to make such payment prohibited under the Declaration of Trust or would violate any federal or state securities laws.
D. In connection with a redemption by Gables Trust of any or all of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this AgreementGables Trust Series A Preferred Shares, the General Partner shall place appropriate restrictions on have the ability right to cause the Partnership to redeem all or a portion of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of Series A Preferred Units that the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of Gables Trust and/or the General Partner from being owned by less than 100 persons holds, and such redemption proceeds shall be distributed to the Gables Trust and/or the General Partner from being “closely held” within Partner, as applicable, pursuant to the meaning provisions of Section 856(h) 5.1(b).
E. In connection with a redemption by Gables Trust of any or all of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessaryGables Trust Series Z Preferred Shares, the General Partner shall give prompt written notice thereof have the right to each cause the Partnership to redeem all or a portion of the Limited Partners holding Partnership UnitsSeries Z Preferred Units that the Gables Trust and/or the General Partner holds, which notice and such redemption proceeds shall be accompanied by a copy of an opinion of counsel distributed to the Partnership which states that, in Gables Trust and/or the opinion of such counsel, restrictions are necessary in order to avoid the foregoingGeneral Partner, as applicable, pursuant to the provisions of Section 5.1(c).
F. In connection with a redemption by Gables Trust of any or all of the Gables Trust Series B Preferred Shares that may at any time be issued and outstanding (f) A fee may in accordance with the terms of the Series B Preferred Units), the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series B Preferred Units that Gables Trust and/or the General Partner then holds, and such redemption proceeds shall be charged (other than distributed to the AdviserGables Trust and/or the General Partner, Special Limited as applicable, in an amount equal to the portion of the Gables Trust's and the General Partner's Adjusted Capital Account balance attributable to such units being redeemed, after adjusting such Capital Accounts pursuant to the provisions of Section 13.2.
G. In connection with a redemption by the Partnership of any or all of the Series B Preferred Units that may at any time be issued and outstanding and not held by Gables Trust (in accordance with the terms of the Series B Preferred Units as set forth in Exhibit F hereto), the General Partner or their Affiliatesshall have the right to cause the Partnership to distribute to the holders of the Series B Preferred Units being redeemed an amount equal to the aggregate Series B Liquidation Preference with respect to such Units as determined pursuant to Section 13.2 hereof, without regard to the requirements of Section 13.2(A)(iv) with respect to distributions to holders of Series A Preferred Units (or any other then outstanding Units or Shares ranking on a Redemption in connection with an exercise parity thereto), to the extent that at the time of Redemption Rights pursuant to this Section 8.5such redemption the terms of the Series A Preferred Units and Gables Trust Series A Preferred Shares (and of any other then outstanding Units or Shares ranking on a parity thereto) permit a redemption of the Series B Preferred Units only.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Gables Residential Trust), Limited Partnership Agreement (Gables Realty Limited Partnership)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of A. Except as otherwise set forth in any agreements separate agreement entered into between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each a Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (and subject to the terms and conditions set forth hereinherein or therein, on or after the date that is 12 months from the date of issuance of a Common Unit to a Limited Partner, such Limited Partner (other than the Company or any Subsidiary of the Company) shall have the right (the “Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Limited Partner (such Common Units (the being hereafter referred to as “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable onAmount; unless the terms of this Agreement or a separate agreement entered into between the Partnership and the Holder of such Common Units expressly provide that such Common Units are not entitled to the Redemption Right. The Partnership may, in the General Partner’s sole and absolute discretion, redeem Tendered Units at the request of the Holder of such Common Units prior to the end of the applicable 12 month period (or such other period as may be specified in any combination thereofseparate agreement entered into between the Partnership and a Limited Partner). Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the Holders of such Common Units, all Common Units shall be entitled to the Redemption Right. The Tendering Partner (as defined below) shall have no right, with respect to any Common Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to General Partner and the General Partner) Company by the Limited Partner who is exercising the Redemption Right right (the “Tendering PartyPartner”). A Tendering Party The Cash Amount shall be deemed to have offered to sell the Tendered Units described payable in accordance with instructions set forth in the Notice of Redemption to the General Tendering Partner and on the Specified Redemption Date. Any Common Units redeemed by the Partnership pursuant to this Section 8.5A shall be cancelled upon such redemption.
B. Notwithstanding the provisions of Section 8.5A above, if a Limited Partner has delivered to the General Partner a Notice of Redemption then the Company may, in its sole and absolute discretiondiscretion (subject to Section 8.5D), elect to purchase directly assume and satisfy the Partnership’s Redemption Right obligation and acquire such some or all of the Tendered Units by paying from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the Company so elects, the Tendering Partner shall sell the Tendered Units to the Tendering Party either the Cash Amount or Company in exchange for the REIT Shares Amount. Within 15 days of receipt of a Notice of RedemptionIn such event, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Tendering Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice have no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require cause the Partnership to redeem all such Tendered Units. The Company shall give such Tendering Partner written notice of its election on or a portion before the close of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective business on the fifth Business Day after its receipt of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units Notice of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such PartnerRedemption. The Tendering Party Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, submit (i) such information, certification or affidavit as the General Partner, acting as a distinct legal entity, shall assume directly Company may reasonably require in connection with the obligation with respect thereto and shall satisfy application of the Tendering Party’s exercise of its Redemption Right, Ownership Limit to any such acquisition and (ii) such transaction shall be treatedwritten representations, for federal income tax purposesinvestment letters, as a Transfer by legal opinions or other instruments necessary, in the Tendering Party of such Tendered Units Company’ view, to effect compliance with the General Partner in exchange for REIT SharesSecurities Act. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions those provided in the Article of Incorporation, Charter or the bylaws Bylaws of the General PartnerCompany, the Securities Act and Act, relevant state securities or “blue sky” lawssky laws and any applicable agreements with respect to such REIT Shares entered into by the Tendering Partner. No Notwithstanding any delay in such delivery (but subject to Section 8.5D), the Tendering Party Partner shall be deemed the owner of such REIT Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date. In addition, the REIT Shares for which the Common Units might be exchanged shall also bear all legends deemed necessary or appropriate by the Company. Neither any Tendering Partner whose Tendered Units are acquired by the General Partner Company pursuant to this Section 8.5B, any Partner, any Assignee nor any other interested Person shall have any right to require or cause the Company to register, qualify or require the General Partner to register list any REIT Shares owned or qualify held by such Person, whether or not such REIT Shares are issued pursuant to this Section 8.5B, with the Commission, with any federal or state securities agency commissioner, department or agency, under the Securities Act or to list such REIT Shares on the Exchange Act or with any stock exchange; unless subject to a separate written agreement pursuant to which the Company has granted registration or similar rights to any such Person.
C. Each Tendering Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same. Each Tendering Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units to the General Partner (or its designee), such Tendering Partner shall assume and pay such transfer tax. Each Tendering Partner further agrees to pay to the Partnership the amount of any tax withholding due upon the redemption of Tendered Units and authorizes the Partnership to retain such portion of the Cash Amount as the Partnership reasonably determines is necessary to satisfy its tax withholding obligations. In the event the Company elects to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount, the Tendering Partner agrees to pay to the Company the amount of any tax withholding due upon the redemption of Tendered Units and, in the event the Tendering Partner has not paid or made arrangements satisfactory to the Company, in its sole discretion, to pay the amount of any such tax withholding prior to the Specified Redemption Date, the Company may elect to either cancel such exchange (in which case the Tendering Partner’s exercise of the Redemption Right will be null and void ab initio), satisfy such tax withholding obligation by retaining REIT Shares with a fair market value, as determined by the Company in its sole discretion, equal to the amount of such obligation or satisfy such tax withholding obligation using amounts paid by the Partnership, which amounts shall be treated as a loan by the Partnership to the Tendering Partner in the manner set forth in Section 5.1B.
D. Notwithstanding the provisions of Section 8.5(a8.5A, Section 8.5B, Section 8.5C or any other provision of this Agreement, a Limited Partner (i) shall not be entitled to effect the Redemption Right for cash or an exchange for REIT Shares to the extent that (if the Company were to elect to acquire the Tendered Units for REIT Shares in accordance with Section 8.5B) the ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the Specified Redemption Date could cause such Partner or any other Person to violate the Ownership Limit and this Section 8.5(b), the Tendering Parties (ii) shall have no rights under this Agreement that to acquire REIT Shares which would otherwise be prohibited under the Charter. To the extent any attempted redemption or exchange for REIT Shares would be in violation of this Section 8.5D, it shall be null and void ab initio and such Limited Partner shall not acquire any rights or economic interest in the cash otherwise payable upon such redemption or the REIT Shares otherwise issuable upon such exchange.
E. Notwithstanding anything herein to the contrary (c) In connection but subject to Section 8.5D), with an exercise of the Redemption Right respect to any redemption or exchange for REIT Shares pursuant to this Section 8.5, : (i) without the Tendering Party shall submit the following to consent of the General Partner, each Limited Partner may effect the Redemption Right only one time in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and each fiscal quarter; (ii) any Related Party and (b) representing that, after giving effect to without the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess consent of the Aggregate Share Ownership Limit or General Partner, each Limited Partner may not effect the Redemption Right for less than 1,000 Common Share Ownership Limit (Units or, if applicable the Excepted Holder Limit);
Limited Partner holds less than 1,000 Common Units, all of the Common Units held by such Limited Partner; (iiiii) A written representation that neither without the Tendering Party nor consent of the General Partner, each Limited Partner may not effect the Redemption Right during the period after the Partnership Record Date with respect to a distribution and before the record date established by the Company for a distribution to its common stockholders of some or all of its portion of such distribution; (iv) the consummation of any Related Party has any intention to acquire any additional redemption or exchange for REIT Shares prior shall be subject to the closing expiration or termination of the Redemption applicable waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended; and (v) each Tendering Partner shall continue to own all Common Units subject to any redemption or exchange for REIT Shares, and be treated as a Limited Partner with respect to such Common Units for all purposes of this Agreement, until such Common Units are either paid for by the Partnership pursuant to Section 8.5A hereof or transferred to the Company and paid for by the issuance of the REIT Shares, pursuant to Section 8.5B hereof on the Specified Redemption Date;
(iii) An undertaking to certify, at and as . Until a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership Tendering Partner shall have no rights as a stockholder of REIT Shares the Company with respect to such Tendering Partner’s Common Units.
F. All Common Units acquired by the Tendering Party Company pursuant to Section 8.5B hereof shall automatically, and any Related Party remain unchanged from that disclosed without further action required, be converted into and deemed to be Limited Partner Interests and held by the Company in its capacity as a Limited Partner in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirePartnership.
(d) Any Cash Amount G. In the event that the Partnership issues additional Partnership Interests to be paid to a Tendering Party any Additional Limited Partner pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement4.2, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by make such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant revisions to this Section 8.58.5 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
Appears in 2 contracts
Samples: Limited Partnership Agreement (American Farmland Co), Limited Partnership Agreement (American Farmland Co)
Redemption Right. (a) Subject to this Section 8.5 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themPartners, each Limited Partner Partner, other than the General Ashford OP Limited Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)LLC, shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Common Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership. The Partnership shall have up to one (1) year (the “Tendered UnitsPayout Period”) in exchange for REIT Shares issuable on, or following exercise of a Redemption Right to pay the Cash Amount payable on, or any combination thereof, to the Limited Partner who is exercising the redemption right (the “Redeeming Partner”). From and after the Specified Redemption Date, as determined the Cash Amount (or portion thereof) due and payable to a Redeeming Partner with respect to such Redeeming Partner’s exercise of its Redemption Right shall bear interest at the rate equal to the lower of (i) the Company’s annual dividend rate on REIT Common Shares for the prior twelve (12) month period, or (ii) eight percent (8%) per annum, until the Cash Amount (or portion thereof) shall be paid in full by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner exercising may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, all of the “Tendering Party”)Common Partnership Units held by such Partner. A Tendering Party Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall be deemed have any right with respect to any Common Partnership Units so redeemed to receive any distributions paid after the Specified Redemption Date. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have offered any right, with respect to sell any Common Partnership Units so redeemed, to receive any distributions paid after the Tendered Units described in the Notice of Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner and may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to purchase assume directly and acquire such Tendered Units satisfy a Redemption Right by paying to the Tendering Party Redeeming Partner either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or (i) the Cash Amount, as provided for in Section 7.4(a), or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoingREIT Common Shares Amount, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held as elected by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 directed by the Tendering Party of such Tendered Units to the General Partner Company (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, provided that the Tendering Party shall sell such number Company may defer payment of the Tendered Units to Cash Amount until the General Partner in exchange for a number of REIT Shares equal to the product end of the REIT Shares Payout Period described in Section 7.4(a) (in which case the Cash Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner bear interest as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated described in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b7.4(a)), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, howeverfurther, that the General Partner may elect Company may, if it has elected so to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such defer payment of the Cash Amount, further elect at any time before the end of the Payout Period to pay all or any portion of the unpaid Cash Amount with REIT Common Shares having a Value equal to such portion of the Cash Amount plus any accrued but unpaid interest thereon. On any such election, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by causing additional REIT Shares the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (in its sole and absolute discretion) shall exercise its right to be issued or otherwise. Notwithstanding assume directly and satisfy the foregoingRedemption Right, neither the General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner’s exercise of the Redemption Right. In the event the General Partner, as directed by the Company shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner’s exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner’s Common Partnership Units to the Company or its Affiliates. Each Redeeming Partner agrees to use commercially reasonable efforts provide such representations and related indemnities regarding good title, and to cause execute such documents, as the closing Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the acquisition Redemption Right. If the Redemption Right is satisfied by the delivery of Tendered Units hereunder REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of a deferred payment of the Cash Amount, as provided above, should the General Partner, as directed by the Company elect to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company shareholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such shareholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by the earliest of: (i) ten (10) days after shareholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained; (ii) the date on which the General Partner, as quickly directed by the Company elects to pay such Redeeming Partner the Cash Amount; or (iii) one hundred and thirty (130) days after such Common Partnership Units are presented for redemption. If such shareholder approval is not obtained, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the end of what the Payout Period would have been had the General Partner, as reasonably possibledirected by the Company not elected to pay the REIT Common Share Amount upon the redemption, together with interest on such Cash Amount as specified in Section 7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to the contrary, neither the General Partner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall assume and pay such transfer tax.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate REIT Common Shares issued pursuant to Section 7.4(b) may contain such legends regarding restrictions on transfer as the Company in good faith determines to be necessary or advisable in order to (1) comply with restrictions on transfer under the Securities Act and applicable state securities laws and (2) protect the ability of the Limited Partners Company to exercise their Redemption Rights continue to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) qualify as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicableREIT.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Ashford Hospitality Trust Inc), Limited Partnership Agreement (Ashford Hospitality Trust Inc)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)year, shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)discretion. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) Advisor shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership the Class I Units have been held by the Special Limited Partner or the AdviserAdvisor. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser Advisor for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e))Class I Units. No Limited Partner, other than the Special Limited Partner and the AdviserAdvisor, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, Partner other than the Special Limited Partner and the Adviser, Advisor may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterArticles of Incorporation) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterArticles of Incorporation.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) : A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h)) of the Code, of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(iii) 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;
(iiiii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iviii) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner Partner’s common stock from being owned by less than 100 persons and persons, the General Partner from being “closely held” within the meaning of Section section 856(h) of the Code, (c) and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the foregoing, Partnership be treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A redemption fee may be charged (other than to the AdviserAdvisor, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Starwood Real Estate Income Trust, Inc.), Limited Partnership Agreement (Starwood Real Estate Income Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themPartners, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Ashford Prime OP Limited Partner in its sole discretion)LLC, shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Common Partnership Units held by such Limited Partner (the “Tendered UnitsRedeeming Partner”) at a redemption price per Common Partnership Unit equal to and in exchange for REIT Shares issuable on, or the form of the Cash Amount payable on, or any combination thereof, to be paid by the Partnership on the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner exercising may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, all of the “Tendering Party”Common Partnership Units held by such Partner. Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall have any right, with respect to any Common Partnership Units so redeemed, to receive any distributions paid after the Specified Redemption Date except as provided in Section 7.4(b). A Tendering Party shall be deemed Each Redeeming Partner agrees to have offered provide such representations and related indemnities regarding good and unencumbered title, and to sell the Tendered Units described in the Notice of Redemption to execute such documents, as the General Partner and may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), if a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to purchase assume directly and acquire such Tendered Units satisfy a Redemption Right by paying to the Tendering Party Redeeming Partner either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or (i) the Cash Amount, as provided for in Section 7.4(a), or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoingREIT Common Shares Amount, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held as elected by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 directed by the Tendering Party of such Tendered Units to the General Partner Company (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to provided that if the General Partner in exchange for a number of REIT Shares equal to has not affirmatively notified the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Redeeming Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance on or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause before one Business Day before the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of either the Partnership, the General Partner or its Affiliates will pay the Cash Amount then the General Partner shall be deemed to have elected, directly or through one or more Affiliates, to pay the REIT Common Shares Amount to the Redeeming Partner on the Specified Redemption Date, and the Company agrees that it will provide such REIT Common Shares on the Specified Redemption Date, subject to the other provisions of this Section 7.4. On any Affiliate thereof such election of the General Partner to assume and satisfy a Redemption Right, the Company, directly or indirectly through one or more of its Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (that is not already registered in its sole and absolute discretion), shall exercise its right to assume and satisfy the Redemption Right, or unless the General Partner has been deemed to assume the Redemption Right as an investment adviser under provided in this Section 7.4(b), neither the Advisers Act) General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner’s exercise of the Redemption Right. If the General Partner, as an investment adviser under directed by the Advisers ActCompany, (h) shall exercise its right, or shall be deemed to have elected, to satisfy the violation Redemption Right in the manner described in the first sentence of this Section 7.4(b), except as provided in the following paragraph, the Partnership shall have no obligation to pay any lawamount to the Redeeming Partner with respect to such Redeeming Partner’s exercise of the Redemption Right, rule, regulation by such Limited and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner’s Common Partnership Units to the Company or its Affiliates; provided that if the Redeeming Partner is redeeming all of its Common Partnership Units, the Partnership shall redeem any fractional Common Partnership Unit (constituting less than one Common Partnership Unit) owned by the Redeeming Partner by paying the Cash Amount with respect to such fractional Common Partnership Unit to such Redeeming Partner. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of the Redemption Right, as provided above, should the General Partner, as directed by the Company elect, or be deemed to elect, to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company stockholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such stockholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by ten (10) days after stockholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained. If such stockholder approval is not obtained within one hundred and thirty (130) days after such Common Partnership Units are presented for redemption or the stockholders have voted against the issuance of the REIT Common Shares and payment of the REIT Common Shares, the Partnership will distribute to the Redeeming Partner any distributions pursuant to Section 8.1 that were not made after the Specified Redemption Date with respect to the Common Partnership Units redeemed because of the provisions of Section 7.4(a), the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the earlier of (i) ten (10) days after stockholders have voted against the issuance of the REIT Common Shares, or (ii) one hundred and thirty (130) days after such Common Partnership Units are presented for redemption, together with interest on such Cash Amount from the Specified Redemption Date to the date of payment at the rate equal to the lesser of (i) the Company’s annual dividend rate on REIT Common Shares for the twelve (12) month period prior to the Valuation Date and based upon the Cash Amount for Common Partnership Units redeemed, or (ii) eight percent (8%).
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall, to the fullest extent permitted by law, be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or Section 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and their respective officersclear of all liens and, directorsnotwithstanding anything herein contained to the contrary, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when neither the General Partner determines that imposing such restrictions is necessaryPartner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, if any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall give prompt written notice thereof assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to each of Section 7.4(b) may contain such legends regarding restrictions on transfer as the Limited Partners holding Partnership Units, which notice shall Company in good faith determines to be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary or advisable in order to avoid (1) comply with restrictions on transfer under the foregoing, Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as applicablea REIT.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 2 contracts
Samples: Agreement of Limited Partnership (Ashford Hospitality Trust Inc), Agreement of Limited Partnership (Ashford Hospitality Trust Inc)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them8.6.C hereof, each Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), ) shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price per Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Tendering Party”"Redeeming Partner"). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the General Partner elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption pursuant to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Section 8.6.B. A Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Partnership Units Units, or, if such Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
B. Notwithstanding the provisions of Section 8.6.A, a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the General Partner, and the General Partner will, at the direction of the Partnership as determined in the Partnership's sole and absolute discretion and only if so directed, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares Amount, as elected by the General Partner (b) in its sole and absolute discretion), on the Specified Redemption Date, whereupon the General Partner shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Partner elects shall elect to assume exercise its rights to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the obligation Redeeming Partner within five (5) Business days after the receipt by it of such Notice of Redemption. Unless the General Partner shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6.B, the General Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner's exercise of the Redemption Right. In the event the General Partner shall exercise its right to purchase Partnership Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Party’s to such Redeeming Partner's exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership, and the General Partner shall treat the transaction shall be treatedbetween the General Partner and the Redeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner's Partnership Units to the General Partner. Each Redeeming Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects agrees to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making execute such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
C. Notwithstanding the provisions of Section 8.6.A and Section 8.6.B, a Partner shall not be entitled to exercise the Redemption Right pursuant to Section 8.6.A if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.6.B (dregardless of whether or not the General Partner would in fact exercise its rights under Section 8.6.B) Any Cash Amount would be prohibited under the Articles of Incorporation of the General Partner.
D. With respect to be paid to a Tendering Party any Redemption Right pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that 8.6:
(1) All Partnership Units acquired by the General Partner may elect to cause the Specified Redemption Date pursuant thereto shall automatically, and without further action required, be converted into and deemed to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment interests comprised of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing same number of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possiblePartnership Units.
(e2) Notwithstanding The consummation of such Redemption shall be subject to the requisite filings, if any, and the expiration or termination of the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act ox 0000, xx xxxxxxd.
(3) Each Redeeming Partner shall continue to own all Partnership Units subject to any other provision Notice of Redemption and be treated as a Limited Partner with respect to such Partnership Units for all purposes of this Agreement, until such Partnership Units are transferred to the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Cedar Shopping Centers Inc)
Redemption Right. (a) Subject to this Section 8.5 8.04(c) and the provisions of any agreements agreement between the Partnership and one or more Limited Partners with respect to Partnership Partners, beginning on the date that is twelve months after the date of issuance of any Common Units held by them(including any Common Units that are issued upon the conversion of LTIP Units), each Limited Partner (other than the General Partner, after holding Partner or any Partnership Units for at least one year (or such shorter period as consented to by Subsidiary of the General Partner in its sole discretion), Partner) shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such Partnership Limited Partner’s Common Units (at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)Amount. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to the General PartnerParent REIT) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party , and such notice shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to irrevocable unless otherwise agreed upon by the General Partner and Partner. In such event, the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either Partnership shall deliver the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Redeeming Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption DatePartner. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any not be obligated to satisfy such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of Redemption Right if the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E elects to purchase the Common Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction Notice of the restrictions set forth in Redemption pursuant to Section 8.5(c8.04(b) and Section 8.5(e))hereof. No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices [one] Notice of Redemption during each calendar year[quarter] unless otherwise agreed upon by the General Partner. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership one thousand (1,000) Common Units or, if such Limited Partner holds less than 1,000 Partnership one thousand (1,000) Common Units, all of the Partnership Common Units held by such Limited Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Common Units so redeemed, to receive any distribution paid with respect to Partnership Common Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.04(a) hereof, if a Limited Partner elects exercises the Redemption Right by delivering to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than casha Notice of Redemption, then the Partnership shall direct may, in its sole and absolute discretion, elect to cause Parent REIT to purchase directly and acquire some or all of, and in such event Parent REIT agrees to purchase and acquire, such Common Units by paying to the Redeeming Limited Partner either the Cash Amount or the REIT Shares Amount, as elected by the General Partner to issue (in its sole and deliver absolute discretion) on the Specific Redemption Date, whereupon Parent REIT shall acquire the Common Units tendered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such Common Units. In the event Parent REIT Shares purchases Common Units with respect to the Tendering Party pursuant exercise of a Redemption Right, the Partnership shall have no obligation to pay any amount to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Limited Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Limited Partner’s exercise of its such Redemption Right, and (ii) such each of the Redeeming Limited Partner, the Partnership and Parent REIT shall treat the transaction shall be treated, between Parent REIT and the Redeeming Limited Partner as a sale of the Redeeming Limited Partner’s Common Units to Parent REIT for federal income tax purposes, . Each Redeeming Limited Partner agrees to execute such documents as a Transfer by Parent REIT may reasonably require in connection with the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number issuance of REIT Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterRedemption Right.
(c) In connection with an Notwithstanding the provisions of Sections 8.04(a) and 8.04(b) hereof, a Limited Partner shall not be entitled to exercise of the Redemption Right if the delivery of REIT Shares to such Limited Partner on the Specified Redemption Date by Parent REIT pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, 8.04(b) hereof (regardless of whether or not Parent REIT would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.04(b)) would (i) A written affidavitresult in such Limited Partner or any other Person (as defined in the Charter) owning, dated the same date as the Notice of Redemptiondirectly or indirectly, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Stock Ownership Limit or the Common Share Ownership any Excepted Holder Limit (oreach as defined in the Charter) and calculated in accordance therewith, if applicable except as provided in the Excepted Holder Limit);
Charter, (ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional result in REIT Shares prior being owned by fewer than 100 persons (determined without reference to the closing any rules of the Redemption on the Specified Redemption Date;
attribution), (iii) An undertaking result in Parent REIT being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause Parent REIT to certifyown, at and actually or constructively, 10% or more of the ownership interests in a tenant (other than a TRS) of Parent REIT’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause Parent REIT to fail to qualify as a condition to REIT under the closing of Code, or (vi) cause the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership acquisition of REIT Shares by the Tendering Party and such Limited Partner to be “integrated” with any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own other distribution of REIT Shares in violation or Common Units for purposes of complying with the registration provisions of the Aggregate Share Ownership Limit (orSecurities Act. Parent REIT, if applicablein its sole and absolute discretion, may waive the Excepted Holder Limitrestriction on redemption set forth in this Section 8.04(c); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Each Redeeming Limited Partner covenants and agrees that all Common Units tendered for redemption pursuant to this Section 8.04 will be delivered to the Partnership or the General Partner free and clear of all liens, claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to such Common Units, neither the Partnership nor Parent REIT shall be under any obligation to acquire such Common Units pursuant to Section 8.04(a) or Section 8.04(b) hereof. Each Redeeming Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Units to the Partnership or Parent REIT, such Redeeming Limited Partner shall assume and pay such transfer tax.
(e) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 8.04 shall be paid on the Specified Redemption Date; provided, however, provided that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner Parent REIT to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Shares Amount to be issued or otherwisepaid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, the General Partner Parent REIT agrees to use its commercially reasonable efforts to cause the closing of the acquisition of Tendered redeemed Common Units hereunder to occur as quickly as reasonably possible.
(ef) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Redeeming Limited Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership, Parent REIT or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units, and such Redeeming Limited Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(g) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary or reasonable to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the foregoing, Partnership being treated as applicablea “publicly traded partnership” under Section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Global Medical REIT Inc.)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.04(b), 8.04(c), 8.04(d), 8.04(e) and 8.04(f), and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each them and any restriction agreed to in writing between the Redeeming Limited Partner other than and the Company or the General Partner, after holding any each Limited Partner, other than the Company or the General Partner, shall have the right (the “Redemption Right”) to require the Partnership to redeem on a Specified Redemption Date all or a portion of the Partnership Units that have been held by such Limited Partner for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, lesser time as determined by the General Partner in its sole discretion (and absolute discretion) at a “redemption price equal to and in the form of the Redemption Right”)Amount to be paid by the Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption (a form of which as attached as Exhibit C) delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the Company elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption to the General Partner Redemption; and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Without the consent of the General Partner, other than the Special a Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.04(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units and agrees by paying to acquire the Tendered Units for Redeeming Limited Partner either the Cash Amount or the REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 purposesAmount, as a Transfer elected by the Tendering Party of such Tendered Units to the General Partner Company (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party Company shall sell acquire the Partnership Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the Company shall elect to exercise its right to purchase Partnership Units under this Section 8.04(b) with respect to a Notice of Redemption, it shall so notify the Tendered Units to Redeeming Limited Partner within five Business Days after the receipt by the Company or the General Partner in exchange for a number of REIT Shares equal such Notice of Redemption. In the event the Company shall exercise its right to purchase Partnership Units with respect to the product exercise of a Redemption Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner’s exercise of such Redemption Right, and each of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Redeeming Limited Partner, the Securities Act Partnership, the Company and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right treat the transaction between the Company and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner’s Partnership Units to cause or the Company. Each Redeeming Limited Partner agrees to execute such documents as the Company may reasonably require in connection with the General Partner to register or qualify such issuance of REIT Shares with any federal or state securities agency under upon exercise of the Securities Act or to list such REIT Shares on any stock exchange. Redemption Right.
(c) Notwithstanding the provisions of Section 8.5(a8.04(a) and this Section 8.5(b8.04(b), the Tendering Parties a Limited Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the Company pursuant to this Section 8.5, 8.04(b) (regardless of whether or not the Tendering Party shall submit the following to the General Partner, Company would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.04(b)) would (i) A written affidavitresult in such Partner or any other person owning, dated the same date as the Notice of Redemptiondirectly or indirectly or under applicable attribution rules, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate any Share Ownership Limit or Limitation (as defined in the Common Share Ownership Limit (orDeclaration of Trust) and calculated in accordance therewith, if applicable except as provided in the Excepted Holder Limit);
Declaration of Trust, (ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional result in REIT Shares prior being owned by fewer than 100 persons (determined without reference to the closing any rules of the Redemption on the Specified Redemption Date;
attribution), (iii) An undertaking result in the Company being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause the Company to certifyown, at directly or under the applicable constructive ownership rules, 10% or more of the ownership interests, by value or vote, in a tenant or subtenant of the Company’s, the General Partner’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, other than a “taxable REIT subsidiary” of the Company or the General Partner within the meaning of Section 856(l) of the Code, provided that rents from such taxable REIT subsidiary qualify under Section 856(d)(8) of the Code, or (v) be likely to cause the acquisition of REIT Shares by such Partner to be “integrated” with any other distribution of REIT Shares or Partnership Units for purposes of complying with the registration provisions of the Securities Act. The Company or the General Partner may, in its sole and as absolute discretion, waive the restriction on redemption set forth in this Section 8.04(c) upon the receipt of a condition ruling from the Internal Revenue Service or an opinion of counsel or other evidence satisfactory to the closing of Company or the Redemption on General Partner confirming that the Specified Redemption Date, that either (a) the actual and constructive increased ownership of REIT Shares by pursuant to the Tendering Party and any Related Party remain unchanged from that disclosed waiver will not result in the affidavit required by Section 8.5(c)(1Company being “closely held” within the meaning of section 856(h) of the Code or cause any person or group of persons to own directly or indirectly 10 percent or more, within the meaning of section 856(d)(2)(B)(i) or (bii) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit Code, of any tenant or subtenant of the Company’s, the General Partner’s, the Partnership’s or a Subsidiary Partnership’s real property (orother than a “taxable REIT subsidiary,” as defined in section 856(l) of the Code, if applicable, the Excepted Holder Limit); and
(ivrequirements of section 856(d)(8) Any other documents of the Code are satisfied) if the Company anticipates that such direct or indirect ownership would cause more than [$ ] of the Company’s gross income during the current taxable year to be treated as nonqualifying income for the General Partner may reasonably requirepurposes of the 95% gross income test set forth in Section 856(c)(2) of the Code.
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 90 days to the extent required for the Partnership or the General Partner Company to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit D or such other form as the General Partner may reasonably request. If the Company, the Partnership or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units, and the Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement, the General Partner shall place such restrictions as it reasonably deems appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” taxable as a corporation under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one 7.4(c), on or more after a Partner's Specified Redemption Date, such Limited Partners with respect to Partnership Units held by themPartner, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject the "Redemption
(b) Notwithstanding the provisions of Section 7.4(a), in the event a Limited Partner elects to exercise the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and , the General Partner may, in its sole and absolute discretion, elect to purchase assume directly and acquire such Tendered Units satisfy a Redemption Right by paying to the Tendering Party Redeeming Partner either (i) the Cash Amount Amount, as provided for in Section 7.4(a), or (ii) the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether as elected by the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (iin its sole and absolute discretion) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party General Partner shall sell acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. Unless the General Partner (in its sole and absolute discretion) shall exercise its right to assume directly and satisfy the Redemption Right, the General Partner itself shall have no obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner's exercise of the Tendered Redemption Right. In the event the General Partner shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 7.4(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Partnership Units to the General Partner. Each Redeeming Partner in exchange for a number of REIT Shares equal agrees to the product of the REIT Shares Amount provide such representations and the Applicable Percentage. The product of the Applicable Percentage related indemnities regarding good title, and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify execute such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right. If the Redemption
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Shares if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the General Partner. Without limitation on the preceding sentence, no Person shall be permitted to receive REIT Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the General Partner) more than 9.9% of the total number of issued and outstanding REIT Shares. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a).
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that Each Limited Partner covenants and agrees with the General Partner may elect that all Partnership Units delivered for redemption shall be delivered to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner Partner, as the case may be, free and clear of all liens and, notwithstanding anything herein contained to obtain financing to be used to make such payment of the Cash Amountcontrary, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, neither the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that nor the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel under any obligation to the acquire Partnership Units which states are or may be subject to any liens. Each Limited Partner further agrees that, in the opinion event any state or local property transfer tax is payable as a result of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than transfer of its Partnership Units to the AdviserPartnership or the General Partner, Special such Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5shall assume and pay such transfer tax.
Appears in 1 contract
Samples: Agreement of Limited Partnership (Boykin Lodging Trust Inc)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.05(b), 8.05(c), 8.05(d), and 8.05(e) and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units held by such Limited Partner at an exchange price equal to and in the form of the Cash Amount to be paid by the Partnership, provided that such Partnership Units (the “Tendered Units”) in exchange shall have been outstanding for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)at least one year. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right requesting redemption (the “Tendering PartyRedeeming Partner”). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the General Partner elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption pursuant to the General Partner Section 8.05(b); and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemedexchanged, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.05(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to whereupon the General Partner in shall acquire the Partnership Units offered for exchange for a number of REIT Shares equal to by the product of the REIT Shares Amount Redeeming Partner and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five Business Days after the receipt by the General Partner as duly authorizedof such Notice of Redemption. Unless the General Partner (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.05(b), validly issued, fully paid and non-assessable REIT Shares free the General Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner’s exercise of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance Redemption Right. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the Charter) and other restrictions provided exercise of a Redemption Right in the Article manner described in the first sentence of Incorporationthis Section 8.05(b), the bylaws Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner’s exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner, as the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by case may be, shall treat the transaction between the General Partner, as the case may be, and the Redeeming Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any for federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise income tax purposes as a sale of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following Redeeming Partner’s Partnership Units to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) case may be. Each Redeeming Partner agrees to execute such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.05(b) (regardless of whether or not the General Partner would in fact exercise its rights under Section 8.05(b)) would (i) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the Ownership Limitation (as defined in the Articles of Incorporation) and calculated in accordance therewith, except as provided in the Articles of Incorporation, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in the Articles of Incorporation, (iii) result in the General Partner being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause the General Partner to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner’s, the Partnership’s, or a Subsidiary Partnership’s, real property, within the meaning of Section 856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares by such Partner to be “integrated” with any other distribution of REIT Shares for purposes of complying with the registration provisions of the Securities Act of 1933, as amended (the “Securities Act”). The General Partner, in its sole and absolute discretion, may waive the restriction on exchange set forth in this Section 8.05(c); provided, however, that in the event such restriction is waived, the Redeeming Partner shall be paid the Cash Amount.
(d) Any Cash Amount to be paid to a Tendering Party an Redeeming Partner pursuant to this Section 8.5 8.05 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered exchanged Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A fee may The receipt of a request for redemption with respect to REIT Shares held by stockholders of the General Partner (a “REIT Notice”) shall be charged (other than deemed to be a Notice of Redemption given by the General Partner to the Adviser, Special Limited Partner or their Affiliates) Partnership and an exercise of the Redemption Right with respect to a number of Partnership Units equal to the number of REIT Shares identified in the REIT Notice. With respect to any Redemption in connection with an exercise of Redemption Rights Right exercised by the General Partner pursuant to this Section 8.58.05(f), the General Partner will elect for payment of the Redemption Amount by the Partnership to the General Partner to be the Cash Amount.
Appears in 1 contract
Samples: Limited Partnership Agreement (Wells Timber Real Estate Investment Trust, Inc.)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6(B) and the provisions of 8.6(C) hereof and at any agreements time on or after such date as expressly provided for in any agreement entered into between the Partnership and one or more any Limited Partners with respect to Partnership Units held by themPartner, each Limited Partner holder of a Common Unit (if other than the General Partner), after holding including a holder of any Partnership LTIP Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)that are converted into Class C Common Units, shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units (provided that such Partnership Units (constitute Common Units) held by such holder at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the Partnership; provided that the Partnership Units shall have been outstanding for at least one year; provided, further, that the General Partner Partner, following the direction and approval of the Board of Directors, may allow a holder to exercise its Redemption Right prior to the Common Units being outstanding for one year in its sole discretion (a “Redemption Right”)discretion. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner holder who is exercising the Redemption Right redemption right (the “Tendering PartyRedeeming Partner”). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the Company elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to Section 8.6(B). A holder under this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election8.6(A) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units at any one time or, if such Limited Partner holder holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any holder herein may exercise the rights of such Limited Partner pursuant to this Section 8.6(A), and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a holder in this Section 8.6(A), the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such holder. Any Partnership Units redeemed by the Partnership pursuant to this Section 8.6(A) shall be cancelled upon such redemption.
(b) B. Notwithstanding the provisions of Section 8.6(A), a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares Amount, as elected by the Company in its sole and absolute discretion, on the Specified Redemption Date, whereupon the Company shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Company shall elect to exercise its right to purchase Partnership Units under this Section 8.6(B) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner elects within five Business Days after the receipt by it of such Notice of Redemption. Unless the Company (in its sole and absolute discretion) shall exercise its right to assume the obligation purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6(B), the Company shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner’s exercise of the Redemption Right. In the event the Company shall exercise its right to purchase Partnership Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.6(B), then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Partner’s exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership and the Company shall treat the transaction shall be treatedbetween the Company and the Redeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner’s Partnership Units to the General Company. Each Redeeming Partner agrees to execute such documents as the Company may reasonably require in exchange for connection with the issuance of REIT Shares. The percentage Shares upon exercise of the Tendered Units tendered for Redemption by Right. In case of any reclassification of the Tendering Party for which the General Partner elects to issue REIT Shares (rather including, but not limited to, any reclassification upon a consolidation or merger in which the Company is the continuing corporation) into securities other than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered UnitsREIT Shares, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms for purposes of this Section 8.58.6(B), the General Partner will acquire any number of Tendered Company (or its successor) may thereafter exercise its right to purchase Partnership Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell kind and amount of shares of such number securities receivable upon such reclassification by a holder of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal for which such Partnership Units could be purchased pursuant to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right this Section immediately prior to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. reclassification.
C. Notwithstanding the provisions of Section 8.5(a8.6(A) and this Section 8.5(b8.6(B), the Tendering Parties a Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following 8.6(A) to the General Partner, extent that the delivery of REIT Shares to such Partner on the Specified Redemption Date by the Company pursuant to Section 8.6(B) (regardless of whether or not the Company would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.6(B)) would (i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownershipbe prohibited, as determined for purposes in the sole discretion of Code Sections 856(a)(6the Company, under the Charter or (ii) and 856(h), cause the acquisition of REIT Shares by (i) such Tendering Party and (ii) Partner to be “integrated” with any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership other distribution of REIT Shares for purposes of complying with the Securities Act.
D. Each Partner covenants and agrees that all Partnership Units delivered for redemption shall be delivered to the Partnership free and clear of all liens; and, notwithstanding anything contained herein to the contrary, the Partnership shall be under no obligation to acquire Partnership Units which are or may be subject to any liens. Each Partner further agrees that, if any state or local property transfer tax is payable as a result of the transfer of its Partnership Units to the Partnership, such Partner shall assume and pay such transfer tax.
E. If a Partner exercises its Redemption Right with respect to Class B Common Units pursuant to this Section 8.6 and the Company elects to purchase directly and acquire the same, the Class B Common Units will automatically convert to Class A Common Units upon purchase and acquisition by the Tendering Party Company. If a Partner exercises its Redemption Right with respect to Class C Common Units pursuant to this Section 8.6 and any Related Party remain unchanged from that disclosed the Company elects to purchase directly and acquire the same, the Class C Common Units will, in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation discretion of the Aggregate Share Ownership Limit (orGeneral Partner following direction and approval of the Board of Directors, if applicable, convert to Class A Common Units upon purchase and acquisition by the Excepted Holder Limit); and
(iv) Any other documents Company or at such time as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provideddetermines, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment following direction and approval of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing Board of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possibleDirectors.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (NexPoint Real Estate Finance, Inc.)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B and 8.6.C hereof, on or after the provisions date two (2) years after the closing of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held initial public offering of REIT Shares by themthe Company, each Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Company) shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to ---------------- redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price per Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner"); provided, however, -------- ------- that the Partnership shall not be obligated to satisfy such Redemption Right (if the “Tendering Party”). A Tendering Party shall be deemed Company elects to have offered purchase the Partnership Units subject to sell the Tendered Units described in the Notice of Redemption pursuant to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Section 8.6.B. A Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Partnership Units at any one time or, if such Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemp- tion Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Any Partnership Units redeemed by the Partnership pursuant to this Section 8.6.A shall be cancelled upon such redemption.
B. Notwithstanding the provisions of Section 8.6.A, a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares Amount, as elected by the Company (in its sole and absolute discretion), on the Specified Redemption Date.
(b) , whereupon the Company shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Company shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner elects within five Business Days after the receipt by it of such Notice of Redemption. Unless the Company (in its sole and absolute discretion) shall exercise its right to assume the obligation purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6.B, the Company shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner's exercise of the Redemption Right. In the event the Company shall exercise its right to purchase Partnership Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Party’s to such Redeeming Part- ner's exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction shall be treatedbetween the Company and the Redeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner's Partnership Units to the General Company. Each Redeeming Partner agrees to execute such documents as the Company may reasonably require in exchange for connection with the issuance of REIT Shares. The percentage Shares upon exercise of the Tendered Units tendered for Redemption by Right. In case of any reclassification of the Tendering Party for which the General Partner elects to issue REIT Shares (rather including, but not limited to, any reclassification upon a consolidation or merger in which the Company is the continuing corporation) into securities other than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered UnitsREIT Shares, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms for purposes of this Section 8.58.6.B, the Company (or a Successor General Partner will acquire any number of Tendered Partner) may thereafter exercise its right to purchase Partnership Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell kind and amount of shares of such number securities receivable upon such reclassification by a holder of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal for which such Units could be purchased pursuant to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right this Section immediately prior to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. reclassification.
C. Notwithstanding the provisions of Section 8.5(a) 8.6.A and this Section 8.5(b)8.6.B, the Tendering Parties a Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following 8.6.A to the General Partner, in addition to extent that the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), delivery of REIT Shares by (i) to such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption Partner on the Specified Redemption Date;
Date by the Company pursuant to Section 8.6.B (iiiregardless of whether or not the Company would in fact exercise its rights under Section 8.6.B) An undertaking to certify, at and as a condition to would be prohibited under the closing Articles of Incorporation of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requireCompany.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Reckson Associates Realty Corp)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner and the REIT Limited Partner, after holding any Partnership Units for a period of at least one year twelve full months (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereofor, if determined by the General Partner, in its sole discretion, REIT Shares issuable on, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner and the REIT Limited Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and to the REIT Limited Partner and either the General Partner or the REIT Limited Partner (or both) may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner and/or the REIT Limited Partner has made such an election and whether the General Partner, in its capacity as the general partner of the Partnership, has determined that the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or partially for REIT Shares and partially for a combination thereofCash Amount. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units units received in consideration for management fees, fees or the Performance AllocationParticipation Interest, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Partnership Units pursuant to this Section 8.5 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Partnership Units of the Special Limited Partner or the Adviser Advisor for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at unless the Adviser’s General Partner or Special Limited Partner’s election) unless the Board of Directors of the General REIT Limited Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Partnership Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner and/or the REIT Limited Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner and/or REIT Limited Partner, as applicable, to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner and/or REIT Limited 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 transfer by the Tendering Party of such Tendered Units to the General Partner and/or REIT Limited Partner, as applicable, in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner and/or REIT Limited Partner elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner and/or REIT Limited Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner and/or REIT Limited Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner and/or REIT Limited Partner, as applicable, in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner and/or REIT Limited Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General REIT Limited Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner and/or the REIT Limited Partner shall have any right to cause or require the General Partner and/or the REIT Limited Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the Partnership (with a copy to the General Partner and the REIT Limited Partner), in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h)) of the Code, of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable applicable, the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(18.5(c)(i) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit);
(iv) With respect to any Cash Amount to be received by a Tendering Party, a waiver and release in a form acceptable to the General Partner;
(v) An undertaking that all Partnership Units being delivered for redemption are free and clear of all liens, it being understood that the Partnership shall not be under any obligation to acquire Partnership Units which are or may be subject to any liens; and
(ivvi) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership Partnership, the General Partner or the General REIT Limited Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder LimitLimit or the REIT Limited Partner failing to qualify as a domestically controlled qualified investment entity, (b) the beneficial ownership of the General Partner REIT Shares from being owned by less than 100 persons and the General REIT Limited Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the termination of the Partnership’s status as a partnership for tax purposes, (i) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, (j) the Partnership from being deemed a “SIFT Partnership” as such term is defined in Section 197 of the Income Tax Act (Canada), and (ik) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable. In addition to any other appropriate restrictions placed by the General Partner pursuant to this Section 8.5(e), no Tendering Party (including, without limitation, the Special Limited Partner and the Adviser) shall be entitled to consummate a Redemption if the ownership of or delivery of REIT Shares to such Tendering Party on the Specified Redemption Date by the General Partner would (i) cause the occurrence of any of the circumstances described in clauses (a) through (d) of the first sentence of this Section 8.5(e), (ii) cause the REIT Limited Partner to own, actually or constructively, 10% or more of the ownership interests in a tenant (other than a tenant that is a “taxable REIT subsidiary” (as defined in Section 856(l) of the Code)) of the REIT Limited Partner’s, the Partnership’s or a Subsidiary’s real property, within the meaning of Section 856(d)(2)(B) of the Code, or (iii) otherwise cause the REIT Limited Partner to fail to qualify as a REIT under the Code, including, but not limited to, as a result of any “eligible independent contractor” (as defined in Section 856(d)(9)(A) of the Code) that operates a “qualified lodging facility” (as defined in Section 856(d)(9)(D) of the Code) or a “qualified health care property” (as defined in Section 856(e)(6)(D)(i) of the Code) on behalf of a “taxable REIT subsidiary” (as defined in Section 856(l) of the Code) failing to qualify as such. The REIT Limited Partner, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 8.5(e), provided that the Tendering Party has submitted such information, certification or affidavit as the REIT Limited Partner may reasonably require in connection with the application of the restrictions described in this Section 8.5(e). To the extent any attempted Redemption or exchange for REIT Shares would be in violation of this Section 8.5(e), it shall be null and void ab initio and such Tendering Party shall not acquire any rights or economic interest in any Cash Amount otherwise payable upon such Redemption or the REIT Shares otherwise issuable upon such exchange.
(f) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliatesand the Adviser) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
(g) The General Partner, in its sole discretion, may require a Limited Partner to surrender all or any portion of its Partnership Units and withdraw from the Partnership to the extent such redemption is in the best interest of the Partnership, as determined by the General Partner in good faith at any time for any reason or no reason with or without prior notice to such Limited Partner. A notice of mandatory redemption pursuant to this Section 8.6 shall have the same effect as a request for redemption by a Limited Partner given pursuant to Section 8.5; provided that the mandatory redemption of all or any portion of such Limited Partner’s Partnership Units shall be effective on the date determined by the General Partner and indicated in such notice.
(h) Notwithstanding anything herein to the contrary, the provisions of this Section 8.5 shall not apply with respect to the Initial Class E Units, and instead the provisions of the Brookfield Repurchase Arrangement shall govern with respect to redemptions or repurchases of Initial Class E Units by the Partnership.
Appears in 1 contract
Samples: Limited Partnership Agreement (Brookfield Real Estate Income Trust Inc.)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.04(b), 8.04(c), 8.04(d), 8.04(e) and 8.04(f) and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)Company, shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Redemption Amount to be paid by the Partnership, provided that such Partnership Units (shall have been outstanding for at least one year, and subject to any restriction agreed to in writing between the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by Redeeming Limited Partner and the General Partner in its sole discretion (a “Redemption Right”)or the Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party shall be deemed to have offered to sell ; provided, further, that the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner mayPartnership shall, in its sole and absolute discretion, elect have the option to purchase directly and acquire such Tendered Units by paying to the Tendering Party deliver either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a ; provided, further, that the Partnership shall not be obligated to satisfy such Redemption Right if the Company elects to purchase the Partnership Units subject to the Notice of Redemption; and provided, the Partnership will send to the further, that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Subject to the immediately succeeding sentence, a Limited Partner may not, without the consent of the General Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Units. If a Limited Partner holds less than 1,000 Partnership Units, such Limited Partner may, without the consent of the General Partner, exercise the Redemption Right for all of the Partnership Units held by such Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. LTIP Unit Limited Partners shall not be entitled to redeem their LTIP Units provided for in Section 8.04 of this Agreement, unless and until such LTIP Units have been converted into Common Units. Notwithstanding the foregoing, and except as otherwise permitted by the award, plan or other agreement pursuant to which an LTIP Unit was issued, the right to redeem shall not be exercisable with respect to any Common Unit issued upon conversion of an LTIP Unit until two years after the date on which the LTIP Unit was issued, provided however, that the foregoing restriction shall not apply if the right to redeem is exercised by an LTIP Unit holder in connection with a transaction that falls within the definition of a “change of control” under the agreement or agreements pursuant to which the LTIP Units were issued to such holder.
(b) If Notwithstanding the General provisions of Section 8.04(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units and agrees by paying to acquire the Tendered Units for Redeeming Limited Partner either the Cash Amount or the REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 purposesAmount, as a Transfer elected by the Tendering Party of such Tendered Units to the General Partner Company (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party Company shall sell acquire the Partnership Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the Company shall elect to exercise its right to purchase Partnership Units under this Section 8.04(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Limited Partner within five Business Days after the receipt by the Company of such Notice of Redemption. In the event the Company shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner’s exercise of such Redemption Right, and each of the Tendered Redeeming Limited Partner, the Partnership and the Company shall treat the transaction between the Company and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner’s Partnership Units to the General Company. Each Redeeming Limited Partner agrees to execute such documents as the Company may reasonably require in exchange for a number connection with the issuance of REIT Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit Redemption Right.
(as calculated in accordance with the Charterc) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a8.04(a) and this Section 8.5(b8.04(b), the Tendering Parties a Limited Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the Company pursuant to this Section 8.5, 8.04(b) (regardless of whether or not the Tendering Party shall submit the following to the General Partner, Company would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.04(b)) would (i) A written affidavitresult in such Partner or any other person owning, dated the same date as the Notice of Redemptiondirectly or indirectly, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or Limitation (as defined in the Common Share Ownership Limit (orArticles of Incorporation) and calculated in accordance therewith, if applicable except as provided in the Excepted Holder Limit);
Articles of Incorporation, (ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional result in REIT Shares prior being owned by fewer than 100 persons (determined without reference to the closing any rules of the Redemption on the Specified Redemption Date;
attribution), (iii) An undertaking to certify, at and as a condition to result in the closing Company being “closely held” within the meaning of Section 856(h) of the Redemption on Code, (iv) cause the Specified Redemption DateCompany to own, that either directly or constructively, 10% or more of the ownership interests in a tenant of the Company’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, or (av) cause the actual and constructive ownership acquisition of REIT Shares by such Partner to be “integrated” with any other distribution of REIT Shares for purposes of complying with the Tendering Party registration provisions of the Securities Act of 1933, as amended (the “Securities Act”). The General Partner, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 8.04(c). The consummation of any Related Party remain unchanged from that disclosed redemption in the affidavit required by Section 8.5(c)(1) or (b) after giving effect exchange for REIT Shares shall be subject to the Redemption, neither the Tendering Party nor expiration or termination of any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirewaiting period under applicable law.
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 90 days to the extent required for the Partnership or the General Partner Company to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C. If the Partnership, the Company or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units, and the Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that there is not a material risk that the Partnership does not constitute will be treated as a “publicly traded partnership” taxable as a corporation under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect effect that such restrictions should be imposed to ensure that there is not a Redemption in connection with an exercise material risk of Redemption Rights pursuant to this Section 8.5the Partnership being treated as a “publicly traded partnership” under section 7704 of the Code.
Appears in 1 contract
Samples: Limited Partnership Agreement (Medical Properties Trust Inc)
Redemption Right. (a) Subject to this Section 8.5 8.04(c) and the provisions of any agreements agreement between the Partnership and one or more Limited Partners with respect to Partnership Partners, beginning on the date that is twelve months after the date of issuance of any Common Units held by them(including any Common Units that are issued upon the conversion of LTIP Units), each Limited Partner (other than the General Partner, after holding Xenia REIT or any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Subsidiary of Xenia REIT) shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such Partnership Limited Partner’s Common Units (at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)Amount. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to the General PartnerXenia REIT) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party , and such notice shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to irrevocable unless otherwise agreed upon by the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices one Notice of Redemption during each calendar yearquarter unless otherwise agreed upon by the General Partner. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership one thousand (1,000) Common Units or, if such Limited Partner holds less than 1,000 Partnership one thousand (1,000) Common Units, all of the Partnership Common Units held by such Limited Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Common Units so redeemed, to receive any distribution paid with respect to Partnership Common Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the provisions of Section 8.04(a) hereof, if a Limited Partner exercises the Redemption Right by delivering to the Partnership a Notice of Redemption, then the General Partner elects may, in its sole and absolute discretion, elect to assume the obligation from the Partnership cause Xenia REIT to redeem Tendered Units purchase directly and acquire some or all of, and in such event Xenia REIT agrees to purchase and acquire, CH\2141662.3 such Common Units by paying to the Redeeming Limited Partner the REIT Shares Amount, whereupon Xenia REIT shall acquire the Tendered Common Units tendered for redemption by the Redeeming Limited Partner and Xenia REIT Shares rather than cashshall be treated for all purposes of this Agreement as the owner of such Common Units. In the event Xenia REIT shall exercise its right to satisfy the Redemption Right in the manner described in the preceding sentence, then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Limited Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Limited Partner’s exercise of its the Redemption Right, and (ii) such each of the Redeeming Limited Partner, the Partnership and Xenia REIT shall treat the transaction shall be treated, between Xenia REIT and the Redeeming Limited Partner as a sale of the Redeeming Limited Partner’s Common Units to Xenia REIT for federal income tax purposes, . Each Redeeming Limited Partner agrees to execute such documents as a Transfer by Xenia REIT may reasonably require in connection with the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number issuance of REIT Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterRedemption Right.
(c) In connection with an Notwithstanding the provisions of Sections 8.04(a) and 8.04(b) hereof, a Limited Partner shall not be entitled to exercise of the Redemption Right if the delivery of REIT Shares to such Limited Partner on the Specified Redemption Date by Xenia REIT pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, 8.04(b) hereof (regardless of whether or not Xenia REIT would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.04(b)) would (i) A written affidavitresult in such Limited Partner or any other Person (as defined in the Articles) owning, dated the same date as the Notice of Redemptiondirectly or indirectly, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Stock Ownership Limit or the Common Share Ownership any Excepted Holder Limit (oreach as defined in Articles) and calculated in accordance therewith, if applicable except as provided in the Excepted Holder Limit);
Articles, (ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional result in REIT Shares prior being owned by fewer than 100 persons (determined without reference to the closing any rules of the Redemption on the Specified Redemption Date;
attribution), (iii) An undertaking result in Xenia REIT being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause Xenia REIT to certifyown, at and actually or constructively, 10% or more of the ownership interests in a tenant (other than a TRS) of Xenia REIT’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause Xenia REIT to fail to qualify as a condition to REIT under the closing of Code, or (vi) cause the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership acquisition of REIT Shares by the Tendering Party and such Limited Partner to be “integrated” with any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own other distribution of REIT Shares in violation or Common Units for purposes of complying with the registration provisions of the Aggregate Share Ownership Limit (orSecurities Act. Xenia REIT, if applicablein its sole and absolute discretion, may waive the Excepted Holder Limitrestriction on redemption set forth in this Section 8.04(c); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Each Redeeming Limited Partner covenants and agrees that all Common Units tendered for redemption pursuant to this Section 8.04 will be delivered to the Partnership or Xenia REIT free and clear of all liens, claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to such Common Units, neither the Partnership nor Xenia REIT shall be under any obligation to acquire such Common Units pursuant to Section 8.04(a) or Section 8.04(b) hereof. Each Redeeming Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Common Units to the Partnership or Xenia REIT, such Redeeming Limited Partner shall assume and pay such transfer tax.
(e) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner Xenia REIT to obtain cause additional REIT Shares to be issued to provide financing to CH\2141662.3 be used to make such payment of the Cash Amount, by causing additional Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Shares Share Amount to be issued or otherwisepaid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, the General Partner Xenia REIT agrees to use its commercially reasonable efforts to cause the closing of the acquisition of Tendered redeemed Common Units hereunder to occur as quickly as reasonably possible.
(ef) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the General Partner and the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Redeeming Limited Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership, Xenia REIT or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units, and such Redeeming Limited Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(g) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary or reasonable to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the foregoing, Partnership being treated as applicablea “publicly traded partnership” under Section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Xenia Hotels & Resorts, Inc.)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.05(b), 8.05(c), 8.05(d), and 8.05(e), and the provisions of any agreements agreement between the Partnership and one or more any Limited Partners Partner with respect to Partnership Units held by themsuch Limited Partners, each Limited Partner Partner, other than the General Original Limited Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Cash Amount to be paid by the Partnership, provided, that such Partnership Units (the “Tendered Units”) in exchange shall have been outstanding for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)at least one year. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Tendering Party”"Redeeming Partner"). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the General Partner elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption pursuant to the General Partner Section 8.05(b); and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.05(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion but subject to the last sentence of this subsection (b), elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to whereupon the General Partner in exchange shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a number Notice of REIT Shares equal to Redemption, it shall so notify the product Redeeming Partner within five Business Days after the receipt by the General Partner of such Notice of Redemption. Such notice shall indicate whether the REIT Shares General Partner will pay the Cash Amount and the Applicable Percentage. The product of the Applicable Percentage and or the REIT Shares Amount, if applicable, shall be delivered by . Unless the General Partner as duly authorized, validly issued, fully paid (in its sole and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charterabsolute discretion) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any exercise its right to cause or require purchase Partnership Units from the General Redeeming Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h8.05(b), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on not have any obligation to the ability Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of Right. In the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of event the General Partner from being owned by less than 100 persons shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 8.05(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and the General Partner from being “closely held” within the meaning of Section 856(h) each of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Redeeming Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) the Redeeming Partner for federal income tax purposes as a non-exempt prohibited transaction under ERISA. If and when sale of the Redeeming Partner's Partnership Units to the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.Partner. Each Redeeming Partner
Appears in 1 contract
Samples: Limited Partnership Agreement (United Dominion Realty Trust Inc)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B and 8.6.C, on or after the provisions date one (1) year after the closing of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held initial public offering of REIT Shares by themthe Gables Trust, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units held by such Limited Partner (other than Series B Preferred Units which such Units shall have only those Redemption Rights set forth in Exhibit F, attached hereto) at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right (if the “Tendering Party”). A Tendering Party shall be deemed Gables Trust and/or the General Partner elects to have offered purchase the Partnership Units subject to sell the Tendered Units described in the Notice of Redemption pursuant to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Section 8.6.B. A Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Partnership Units or, if such Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
(b) If B. Notwithstanding the General provisions of Section 8.6.A, a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership to redeem Tendered Units and agrees to acquire described in the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise Notice of its Redemption Right, and (ii) such transaction shall be treated, for federal income tax purposes, as a Transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage and the Gables Trust, and either of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects or the Gables Trust (or both) may, in its sole and absolute discretion, elect to issue purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares (rather than the Cash Amount) is referred to , as the “Applicable Percentage.” In making such election to acquire Tendered Units, elected by the General Partner shall act or the Gables Trust (in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party General Partner or the Gables Trust shall sell acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the General Partner and/or the Gables Trust shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, they shall so notify the Redeeming Partner within five Business Days after the receipt by the General Partner of such Notice of Redemption. Unless the General Partner and/or the Gables Trust (in their sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6.B, neither the General Partner nor the Gables Trust shall have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of the Tendered Redemption Right. In the event the General Partner or the Gables Trust shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner or the Gables Trust, as the case may be, shall treat the transaction between the General Partner or the Gables Trust, as the case may be, and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Partnership Units to the General Partner in exchange for a number of REIT Shares equal to or the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares AmountGables Trust, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) case may be. Each Redeeming Partner agrees to execute such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(d) Any Cash Amount C. Notwithstanding the provisions of Section 8.6.A and Section 8.6.B, a Partner shall not be entitled to be paid to a Tendering Party exercise the Redemption Right pursuant to this Section 8.5 shall be paid 8.6.A if the delivery of REIT Shares to such Partner on the Specified Redemption Date; provided, however, that Date by the General Partner may elect or the Gables Trust pursuant to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership Section 8.6.B (regardless of whether or not the General Partner to obtain financing to or the Gables Trust would in fact exercise its rights under Section 8.6.B) would be used to make such payment prohibited under the Declaration of Trust or would violate any federal or state securities laws.
D. In connection with a redemption by Gables Trust of any or all of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this AgreementGables Trust Series A Preferred Shares, the General Partner shall place appropriate restrictions on have the ability right to cause the Partnership to redeem all or a portion of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of Series A Preferred Units that the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of Gables Trust and/or the General Partner from being owned by less than 100 persons holds, and such redemption proceeds shall be distributed to the Gables Trust and/or the General Partner from being “closely held” within Partner, as applicable, pursuant to the meaning provisions of Section 856(h) 5.1(b).
E. In connection with a redemption by Gables Trust of any or all of the Code, Gables Trust Series B Preferred Shares that may at any time be issued and outstanding (c) as and if deemed necessary to ensure that in accordance with the Partnership does not constitute a “publicly traded partnership” under Section 7704 terms of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessarySeries B Preferred Units), the General Partner shall give prompt written notice thereof have the right to each cause the Partnership to redeem all or a portion of the Limited Partners holding Partnership UnitsSeries B Preferred Units that Gables Trust and/or the General Partner then holds, which notice and such redemption proceeds shall be accompanied by a copy of an opinion of counsel distributed to the Partnership which states that, in Gables Trust and/or the opinion of such counsel, restrictions are necessary in order to avoid the foregoingGeneral Partner, as applicable, in an amount equal to the portion of the Gables Trust's and the General Partner's Adjusted Capital Account balance attributable to such units being redeemed, after adjusting such Capital Accounts pursuant to the provisions of Section 13.2.
(f) A fee may F. In connection with a redemption by Gables Trust of any or all of the Gables Trust Series C Preferred Shares, the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series C Preferred Units that the Gables Trust and/or the General Partner holds, and such redemption proceeds shall be charged (other than distributed to the AdviserGables Trust and/or the General Partner, Special Limited as applicable, pursuant to the provisions of Section 5.1(b).
G. In connection with a redemption by Gables Trust of any or all of the Gables Trust Series C-1 Preferred Shares, the General Partner shall have the right to cause the Partnership to redeem all or their Affiliatesa portion of the Series C-1 Preferred Units that the Gables Trust and/or the General Partner holds, and such redemption proceeds shall be distributed to the Gables Trust and/or the General Partner, as applicable, pursuant to the provisions of Section 5.1(b).
H. In connection with a redemption by Gables Trust of any or all of the Gables Trust Series D Preferred Shares, the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series D Preferred Units that the Gables Trust and/or General Partner holds, and such redemption proceeds shall be distributed to the Gables Trust and/or the General Partner, as applicable, pursuant to the provisions of Section 5.1(b).
I. In connection with a redemption by Gables Trust of any or all of the Gables Trust Series Z Preferred Shares, the General Partner shall have the right to cause the Partnership to redeem all or a portion of the Series Z Preferred Units that the Gables Trust and/or the General Partner holds, and such redemption proceeds shall be distributed to the Gables Trust and/or the General Partner, as applicable, pursuant to the provisions of Section 5.1(c).
J. In connection with a redemption by the Partnership of any or all of the Series B Preferred Units that may at any time be issued and outstanding and not held by Gables Trust (in accordance with the terms of the Series B Preferred Units as set forth in Exhibit F hereto), the General Partner shall have the right to cause the Partnership to distribute to the holders of the Series B Preferred Units being redeemed an amount equal to the aggregate Series B Liquidation Preference with respect to such Units as determined pursuant to Section 13.2 hereof, without regard to the requirements of Section 13.2(A)(iv) with respect to distributions to holders of the Series A Preferred Units, the Series C Preferred Units, the Series C-1 Preferred Units or the Series D Preferred Units (or any other then outstanding Units or Shares ranking on a Redemption in connection with an exercise parity thereto), to the extent that at the time of Redemption Rights pursuant to this Section 8.5.such redemption the terms of (1) the Series A Preferred Units and the Gables Trust Series A Preferred Shares, (2) the terms of the Series C Preferred Units and the Gables Trust Series C Preferred Shares, (3) the terms of the Series C-1 Preferred Units and the Gables Trust Series C-1 Preferred Shares and (4) the terms of the Series D Preferred Units and the Gables Trust Series D Preferred Shares (and of any other then outstanding Units or Shares ranking on a parity thereto) permit a redemption of the Series B Preferred Units only. ARTICLE 9
Appears in 1 contract
Samples: Limited Partnership Agreement (Gables Realty Limited Partnership)
Redemption Right. (a) Subject to this Section 8.5 7.4(b) and Section 7.4(c), and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themPartners, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Ashford Prime OP Limited Partner in its sole discretion)LLC, shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Common Partnership Units held by such Limited Partner (the “Tendered UnitsRedeeming Partner”) at a redemption price per Common Partnership Unit equal to and in exchange for REIT Shares issuable on, or the form of the Cash Amount payable on, or any combination thereof, to be paid by the Partnership on the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Redeeming Partner. A Limited Partner exercising may not exercise the Redemption Right for less than one thousand (1,000) Common Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Common Partnership Units, all of the “Tendering Party”)Common Partnership Units held by such Partner. A Tendering Party Neither the Redeeming Partner nor any permitted or purported assignee of any Limited Partner shall be deemed have any right, with respect to have offered any Common Partnership Units so redeemed, to sell receive any distributions paid after the Tendered Units described in the Notice of Specified Redemption Date. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the General Partner and may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section 7.4(a), if a Limited Partner elects to exercise the Redemption Right, the General Partner at the direction of the Company, directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to purchase assume directly and acquire such Tendered Units satisfy a Redemption Right by paying to the Tendering Party Redeeming Partner either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or (i) the Cash Amount, as provided for in Section 7.4(a), or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoingREIT Common Shares Amount, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held as elected by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 directed by the Tendering Party of such Tendered Units to the General Partner Company (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to provided that if the General Partner in exchange for a number of REIT Shares equal to has not affirmatively notified the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Redeeming Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance on or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause before one Business Day before the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of either the Partnership, the General Partner or its Affiliates will pay the Cash Amount then the General Partner shall be deemed to have elected, directly or through one or more Affiliates, to pay the REIT Common Shares Amount to the Redeeming Partner on the Specified Redemption Date, and the Company agrees that it will provide such REIT Common Shares on the Specified Redemption Date, subject to the other provisions of this Section 7.4. On any Affiliate thereof such election of the General Partner to assume and satisfy a Redemption Right, the Company, directly or indirectly through one or more Affiliates, shall acquire the Common Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Partnership Units. Unless the General Partner, as directed by the Company (that is not already registered in its sole and absolute discretion), shall exercise its right to assume and satisfy the Redemption Right, or unless the General Partner has been deemed to assume the Redemption Right as an investment adviser under provided in this Section 7.4(b), neither the Advisers Act) General Partner nor the Company itself shall have any obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner’s exercise of the Redemption Right. If the General Partner, as an investment adviser under directed by the Advisers ActCompany, (h) shall exercise its right, or shall be deemed to have elected, to satisfy the violation Redemption Right in the manner described in the first sentence of this Section 7.4(b), except as provided in the following paragraph, the Partnership shall have no obligation to pay any lawamount to the Redeeming Partner with respect to such Redeeming Partner’s exercise of the Redemption Right, rule, regulation by such Limited and each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner’s Common Partnership Units to the Company or its Affiliates; provided that if the Redeeming Partner is redeeming all of its Common Partnership Units, the Partnership shall redeem any fractional Common Partnership Unit (constituting less than one Common Partnership Unit owned by the Redeeming Partner by paying the Cash Amount with respect to such fractional Common Partnership Unit to such Redeeming Partner. Each Redeeming Partner agrees to provide such representations and related indemnities regarding good title, and to execute such documents, as the Company may reasonably require in connection with the issuance of REIT Common Shares upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of REIT Common Shares, the Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.4(b) that the Company delivers REIT Common Shares, as the case may be. Notwithstanding anything to the contrary in Section 7.4(a) or this Section 7.4(b), and in addition to the right of the Company to deliver REIT Common Shares in satisfaction of the Redemption Right, as provided above, should the General Partner, as directed by the Company elect, or be deemed to elect, to satisfy a Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount, and it is necessary to obtain Company stockholder approval in order for it to issue sufficient REIT Common Shares to satisfy such Redemption Right in full, then the Company shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such stockholder approval and to pay the REIT Common Shares Amount, and the redemption date shall be required to occur by ten (10) days after stockholder approval of the issuance of the REIT Common Shares has been obtained, if it is obtained. If such stockholder approval is not obtained within one hundred and thirty (130) days after such Common Partnership Units are presented for redemption or the stockholders have voted against the issuance of the REIT Common Shares, the Partnership shall pay to the Redeeming Partner the Cash Amount no later than the earlier of (i) ten (10) days after stockholders have voted against the issuance of the REIT Common Shares, or (ii) one hundred and thirty (130) days after such Common Partnership Units are presented for redemption, together with interest on such Cash Amount at the rate equal to the lesser of (i) the Company’s annual dividend rate on REIT Common Shares for the twelve (12) month period prior to the Valuation Date and based upon the Cash Amount for Common Partnership Units redeemed, or (ii) eight percent (8%).
(c) Notwithstanding the provisions of Section 7.4(a) and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT Common Shares if the delivery of REIT Common Shares to such Partner on the Specified Redemption Date (or such later date permitted by Section 7.4(b), as applicable) by the Company pursuant to Section 7.4(b) would be prohibited under the Articles of Incorporation of the Company, as amended or restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive REIT Common Shares if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of the Company, as amended or restated from time to time) more than 9.8% of the total number of issued and outstanding REIT Common Shares, unless waived by the board of directors of the Company in its sole discretion. To the extent any attempted redemption for REIT Common Shares would be a violation of this Section 7.4(c), it shall be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the terms set forth in Section 7.4(a) or Section 7.4(b).
(d) Each Limited Partner covenants and agrees with the General Partner that all Common Partnership Units delivered for redemption shall be delivered to the Partnership, the Company or its Affiliates, as the case may be, free and their respective officersclear of all liens and, directorsnotwithstanding anything herein contained to the contrary, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when neither the General Partner determines that imposing such restrictions is necessaryPartner, the Company (nor any of its Affiliates) nor the Partnership shall be under any obligation to acquire Common Partnership Units which are or may be subject to any liens. Each Limited Partner further agrees that, if any state or local property transfer tax is payable as a result of the transfer of its Common Partnership Units to the General Partner, Partnership or the Company, such Limited Partner shall give prompt written notice thereof assume and pay such transfer tax.
(e) REIT Common Shares issued pursuant to each of Section 7.4(b) may contain such legends regarding restrictions on transfer as the Limited Partners holding Partnership Units, which notice shall Company in good faith determines to be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary or advisable in order to avoid (1) comply with restrictions on transfer under the foregoing, Securities Act and applicable state securities laws and (2) protect the ability of the Company to continue to qualify as applicablea REIT.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Ashford Hospitality Prime, Inc.)
Redemption Right. (a) Subject to the provisions of this Section 8.5 8.05 and the provisions terms of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themPartners, each Limited Partner (other than the Special Limited Partner, the Company, the General Partner, after holding or any Partnership Units for at least one year (wholly owned Subsidiaries of the Company or such shorter period as consented to by the General Partner in its sole discretion), Partner) shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (a “Redemption”) on the Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Tendering Party”"Redeeming Partner"). A Tendering Party ; provided, however, that the -------- ------- Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the General Partner elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption pursuant to the General Partner Section 8.05(b); and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the that no -------- ------- Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date Partnership Record Date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.05(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to whereupon the General Partner in exchange shall acquire the Partnership Units offered for a number of REIT Shares equal to redemption by the product of the REIT Shares Amount redeeming Partner and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within ten (10) Business Days after the receipt by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article such Notice of Incorporation, the bylaws of Redemption. Unless the General PartnerPartner (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.05(b), the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right no obligation to cause the Redeeming Partner or require the General Partner Partnership with respect to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an Redeeming Partner's exercise of the Redemption Right. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right pursuant to in the manner described in the first sentence of this Section 8.58.05(b), the Tendering Party Partnership shall submit have no obligation to pay any amount to the following Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner, as the case may be, shall treat the transaction between the General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Partnership Units to the General Partner, in addition . Each Redeeming Partner agrees to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) execute such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right. If the Redeeming Partner receives REIT Shares, the Redeeming Partner shall have the right to receive any dividend or other distribution paid with respect to REIT Shares if the record date for such dividend or distribution is on or after the Specified Redemption Date.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.05(b) (regardless of whether the General Partner would in fact exercise its rights under Section 8.05(b)) would (i) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the Ownership Limitation (as defined in the Articles of Incorporation) and calculated in accordance therewith, except as provided in the Articles of Incorporation, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to an rules of attribution), (iii) result in the Company being "closely held" within the meaning of Section 856(h) of the Code, (iv) otherwise jeopardize the Company's status as a REIT, or (iv) cause the acquisition of REIT Shares by such Partner to be "integrated" with any other distribution of REIT Shares for purposes of complying with the registration provisions of the Securities Act. The General Partner, in its sole discretion, may waive the restriction on redemption set forth in this Section 8.05(c); provided, however, that in the event such restriction is waived, the -------- ------- Redeeming Partner shall be paid the Cash Amount.
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Partner pursuant to this Section 8.5 8.05 shall be paid on the Specified Redemption Date; provided, however, that -------- ------- the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner Company to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state, or local law that apply upon a Redeeming Partner's exercise of the Redemption Right. If a Redeeming Partner believes that it is exempt from such withholding upon a exercise of the Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C. If the Partnership or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Partner's exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units, and the Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “"publicly traded partnership” " that is taxed as a corporation under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a "Restriction Notice") to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea "publicly traded partnership" that is taxed as a corporation under Section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Redemption Right. (a) Subject to this Section 8.5 Sections 8.05(b), 8.05(c), 8.05(d), and 8.05(e) and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units held by such Limited Partner at an exchange price equal to and in the form of the Cash Amount to be paid by the Partnership, provided that such Partnership Units (the “Tendered Units”) in exchange shall have been outstanding for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)at least one year. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising requesting redemption (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right (if the “Tendering Party”). A Tendering Party shall be deemed General Partner elects to have offered purchase the Partnership Units subject to sell the Tendered Units described in the Notice of Redemption pursuant to the General Partner Section 8.05(b); and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemedexchanged, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.05(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to whereupon the General Partner in shall acquire the Partnership Units offered for exchange for a number of REIT Shares equal to by the product of the REIT Shares Amount Redeeming Partner and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five Business Days after the receipt by the General Partner as duly authorizedof such Notice of Redemption. Unless the General Partner (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.05(b), validly issued, fully paid and non-assessable REIT Shares free the General Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance Redemption Right. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the Charter) and other restrictions provided exercise of a Redemption Right in the Article manner described in the first sentence of Incorporationthis Section 8.05(b), the bylaws Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner, as the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by case may be, shall treat the transaction between the General Partner, as the case may be, and the Redeeming Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any for federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise income tax purposes as a sale of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following Redeeming Partner's Partnership Units to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) case may be. Each Redeeming Partner agrees to execute such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.05(b) (regardless of whether or not the General Partner would in fact exercise its rights under Section 8.05(b)) would (i) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the Ownership Limitation (as defined in the Articles of Incorporation) and calculated in accordance therewith, except as provided in the Articles of Incorporation, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in the Articles of Incorporation, (iii) result in the General Partner being "closely held" within the meaning of Section 856(h) of the Code, (iv) cause the General Partner to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner's, the Partnership's, or a Subsidiary Partnership's, real property, within the meaning of Section 856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares by such Partner to be "integrated" with any other distribution of REIT Shares for purposes of complying with the registration provisions of the Securities Act of 1933, as amended (the "Securities Act"). The General Partner, in their sole and absolute discretion, may waive the restriction on exchange set forth in this Section 8.05(c); provided, however, that in the event such restriction is waived, the Redeeming Partner shall be paid the Cash Amount.
(d) Any Cash Amount to be paid to a Tendering Party an Redeeming Partner pursuant to this Section 8.5 8.05 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered exchanged Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “"publicly traded partnership” " under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a "Restriction Notice") to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea "publicly traded partnership" under section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Wells Timber Real Estate Investment Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)discretion. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special A Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by other than the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) Notwithstanding the foregoing, the Special Limited Partner, the Adviser and its Affiliates and officers and employees of the Advisor and its Affiliates shall have the right to require the Partnership to redeem all or a portion of their respective Class E Units pursuant to this Section 8.5 at any time irrespective of the period the Partnership Units have been held by them, subject to any separate lock-up restrictions with respect to the Sponsor Committed Amount. The Partnership shall redeem any such Class E Units of the Special Limited Partner, the Adviser and its Affiliates and officers and employees of the Adviser and its Affiliates for Class E REIT Shares or the Cash Amount (at such Person’s election) unless the Board of Directors of the General Partner determines that any such redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units will be redeemed for an amount of Class E REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Class E Units.
(c) If the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the ACTIVE\193981801.8 Tendering Party for which the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterArticles of Incorporation) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b8.5(c), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterArticles of Incorporation.
(cd) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii2) 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;
(iii3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the written affidavit or representation required by Section 8.5(c)(18.5(d)(1) or (b2) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv4) Any other documents as the General Partner may reasonably require.
(de) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(ef) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner Partner’s common stock from being owned by less than 100 persons and persons, the General Partner from being “closely held” within the meaning of Section section 856(h) of the Code, (c) and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the foregoing, Partnership be treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(fg) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (EQT Exeter Real Estate Income Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.05(b), 8.05(c), 8.05(d), and 8.05(e) and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units held by such Limited Partner at an Redemption price equal to and in the form of the Cash Amount to be paid by the Partnership, provided that such Partnership Units (the “Tendered Units”) in exchange shall have been outstanding for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)at least one year. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right requesting redemption (the “Tendering PartyRedeeming Partner”). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the General Partner elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption pursuant to the General Partner Section 8.05(b); and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemedRedemption, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.05(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to whereupon the General Partner in exchange shall acquire the Partnership Units offered for a number of REIT Shares equal to Redemption by the product of the REIT Shares Amount Redeeming Partner and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five Business Days after the receipt by the General Partner as duly authorizedof such Notice of Redemption. Unless the General Partner (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.05(b), validly issued, fully paid and non-assessable REIT Shares free the General Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner’s exercise of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance Redemption Right. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the Charter) and other restrictions provided exercise of a Redemption Right in the Article manner described in the first sentence of Incorporationthis Section 8.05(b), the bylaws Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner’s exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner, as the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by case may be, shall treat the transaction between the General Partner, as the case may be, and the Redeeming Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any for federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise income tax purposes as a sale of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following Redeeming Partner’s Partnership Units to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) case may be. Each Redeeming Partner agrees to execute such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.05(b) (regardless of whether or not the General Partner would in fact exercise its rights under Section 8.05(b)) would (i) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the Ownership Limitation (as defined in the Articles of Incorporation and calculated in accordance therewith), except as provided in the Articles of Incorporation, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in the Articles of Incorporation, (iii) result in the General Partner being “closely held” within the meaning of Section 856(h) of the Code, or (iv) cause the General Partner to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner’s, the Partnership’s, or a Subsidiary Partnership’s, real property, within the meaning of Section 856(d)(2)(B) of the Code. The General Partner, in its sole and absolute discretion, may waive the restriction on Redemption set forth in this Section 8.05(c).
(d) Any Cash Amount to be paid to a Tendering Party an Redeeming Partner pursuant to this Section 8.5 8.05 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Redemptiond Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Institutional REIT, Inc.)
Redemption Right. (a) Subject to Sections 8.6(b) and 8.6(c) at any time on or after one year following the date of the initial issuance thereof (which, in the event of the transfer of a Common Unit, shall be deemed to be the date that such Common Unit was issued to the original recipient thereof for purposes of this Section 8.5 and 8.6), the provisions holder of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner a Common Unit (if other than the General Partner), after holding including any Partnership LTIP Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)that are converted into Common Units, shall have the right right, (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (redeem, on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units (provided that such Partnership Units (constitute Common Units) held by such Limited Partner at a redemption price per Common Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right redemption right (the “Tendering PartyRedeeming Partner”). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the Company elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e8.6(b)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units at any one time or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Limited Partner. The Tendering Party Redeeming Partner shall have no right, right with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Any Partnership Units redeemed by the Partnership pursuant to this Section 8.6(a) shall be cancelled upon such redemption.
(b) Notwithstanding the provisions of Section 8.6(a), a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Partnership Units described in the Notice of Redemption to the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner the Redemption Amount in the form of the Cash Amount or the REIT Shares Amount, as elected by the Company (in its sole and absolute discretion), on the Specified Redemption Date, whereupon the Company shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Company shall elect to exercise its right to purchase Partnership Units under this Section 8.6(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner elects within five Business Days after the receipt by it of such Notice of Redemption. Unless the Company (in its sole and absolute discretion) shall exercise its right to assume the obligation purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.6(b), the Company shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner’s exercise of the Redemption Right. In the event the Company shall exercise its right to purchase Partnership Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.6(b), then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Partner’s exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership and the Company shall treat the transaction shall be treatedbetween the Company and the Redeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner’s Partnership Units to the General Company. Each Redeeming Partner agrees to execute such documents as the Company may reasonably require in exchange for connection with the issuance of REIT Shares. The percentage Shares upon exercise of the Tendered Units tendered for Redemption by Right. In case of any reclassification of the Tendering Party for which the General Partner elects to issue REIT Shares (rather including, but not limited to, any reclassification upon a consolidation or merger in which the Company is the continuing corporation) into securities other than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered UnitsREIT Shares, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms for purposes of this Section 8.58.6(b), the General Partner will acquire any number of Tendered Company (or its successor) may thereafter exercise its right to purchase Partnership Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell kind and amount of shares of such number securities receivable upon such reclassification by a holder of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal for which such Units could be purchased pursuant to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit this Section 8.6(b) immediately prior to such reclassification.
(as calculated in accordance with the Charterc) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a8.6(a) and this Section 8.5(b8.6(b), the Tendering Parties a Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.Section
Appears in 1 contract
Samples: Limited Partnership Agreement (Vinebrook Homes Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 7.3(b) and Section 7.3(c), and the provisions of any agreements between the Partnership Company and one or more Limited Partners with respect to Partnership Units held by themMembers, each Limited Partner Member other than the General PartnerAshford OAINC Inc., after holding Ashford OAINC II Inc. and Ashford Inc. (and any Partnership Units for at least one year (of their subsidiaries and any entity that directly or such shorter period as consented to by the General Partner in its sole discretionindirectly wholly owns Ashford OAINC Inc., Ashford OAINC II Inc. or Ashford Inc.), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership Company to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units (but not Preferred Units) held by such Partnership Units Member (the “Tendered UnitsRedeeming Member”) at a redemption price per Common Unit equal to and in exchange for REIT Shares issuable on, or the form of the Cash Amount payable on, or any combination thereof, to be paid by the Company on the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership Company (with a copy to the General PartnerManager) by the Limited Partner exercising Redeeming Member. A Member may not exercise the Redemption Right for less than one thousand (1,000) Common Units or, if such Member holds less than one thousand (1,000) Common Units, all of the “Tendering Party”Common Units held by such Member. Neither the Redeeming Member nor any permitted or purported assignee of any Member shall have any right, with respect to any Common Units so redeemed, to receive any distributions paid after the Specified Redemption Date except as provided in Section 7.3(b). A Tendering Party shall Each Redeeming Member agrees to provide such representations and related indemnities regarding good and unencumbered title, and to execute such documents, as the Manager may reasonably require in connection with any redemption.
(b) The provisions of Section 7.3(b) may be deemed applied by the Manager, if the Manager is Ashford OAINC Inc. or as Ashford OAINC Inc. otherwise agrees. Notwithstanding the provisions of Section 7.3(a), if a Member elects to have offered to sell exercise the Tendered Units described in Redemption Right, the Notice Manager at the direction of Redemption to the General Partner and the General Partner Ashford OAINC Inc., directly or indirectly through one or more Affiliates, may, in its sole and absolute discretion, elect to purchase assume directly and acquire such Tendered Units satisfy a Redemption Right by paying to the Tendering Party Redeeming Member either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or (i) the Cash Amount, as provided for in Section 7.3(a), or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoingAshford Inc. Common Stock Amount, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held as elected by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 purposesManager, as a Transfer directed by the Tendering Party of such Tendered Units to the General Partner Ashford OAINC Inc. (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amountits sole and absolute discretion) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, provided that if the Tendering Party shall sell such number of Manager has not affirmatively notified the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance Redeeming Member on or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on before one Business Day before the Specified Redemption Date;
(iii) An undertaking Date that either the Company, the Manager or its Affiliates will pay the Cash Amount then the Manager shall be deemed to certifyhave elected, at and as a condition directly or through one or more Affiliates, to pay the Ashford Inc. Common Stock Amount to the closing of the Redemption Redeeming Member on the Specified Redemption Date, and Ashford OAINC Inc. agrees that either (a) it will provide such Ashford Inc. Common Stock on the actual Specified Redemption Date, subject to the other provisions of this Section 7.3. On any such election of the Manager to assume and constructive ownership satisfy a Redemption Right, Ashford OAINC Inc., directly or indirectly through one or more of REIT Shares its Affiliates, shall acquire the Common Units offered for redemption by the Tendering Party Redeeming Member and shall be treated for all purposes of this Agreement as the owner of such Common Units. Unless the Manager, as directed by Ashford OAINC Inc. (in its sole and absolute discretion) shall exercise its right to assume and satisfy the Redemption Right, or unless the Manager has been deemed to assume the Redemption Right as provided in this Section 7.3(b), neither the Manager, nor Ashford OAINC Inc. itself shall have any Related Party remain unchanged from that disclosed obligation to the Redeeming Member or to the Company with respect to the Redeeming Member’s exercise of the Redemption Right. If the Manager shall exercise its right, or shall be deemed to have elected, to satisfy the Redemption Right in the affidavit manner described in this Section 7.3(b), except as provided in the following paragraph, the Company shall have no obligation to pay any amount to the Redeeming Member with respect to such Redeeming Member’s exercise of the Redemption Right, and each of the Redeeming Member, the Company, and Ashford OAINC Inc. shall treat the transaction between Ashford OAINC Inc. and the Redeeming Member for federal income tax purposes as a sale of the Redeeming Member’s Common Units to Ashford OAINC Inc. or its Affiliates; provided that if the Redeeming Member is redeeming all of its Common Units, the Company shall redeem any fractional Common Unit (constituting less than one Common Unit) owned by the Redeeming Member by paying the Cash Amount with respect to such fractional Common Unit to such Redeeming Member. Each Redeeming Member agrees to provide such representations and related indemnities regarding good title, and to execute such documents, as Ashford OAINC Inc. may reasonably require in connection with the issuance of Ashford Inc. Common Stock upon exercise of the Redemption Right. If the Redemption Right is satisfied by the delivery of Ashford Inc. Common Stock, the Redeeming Member shall be deemed to become a holder of Ashford Inc. Common Stock as of the close of business on the Specified Redemption Date or on such later date permitted by this Section 7.3(b) that Ashford OAINC Inc. delivers Ashford Inc. Common Stock, as the case may be. Notwithstanding anything to the contrary in Section 7.3(a) or this Section 7.3(b), and in addition to the right of Ashford OAINC Inc. to deliver Ashford Inc. Common Stock in satisfaction of the Redemption Right, as provided above, should the Manager, elect, or be deemed to elect, to satisfy a Redemption Right by paying the Redeeming Member the Ashford Inc. Common Stock Amount, and it is necessary to obtain Ashford Inc. stockholder approval in order for it to issue sufficient Ashford Inc. Common Stock to satisfy such Redemption Right in full, then Ashford Inc. shall have one hundred twenty (120) days beyond the Specified Redemption Date in which to obtain such stockholder approval and to deliver such Ashford Inc. Common Stock Amount to the Manager to permit the Manager to pay the Ashford Inc. Common Stock Amount, and the redemption date shall be required to occur by ten (10) days after stockholder approval of the issuance of the Ashford Inc. Common Stock has been obtained, if it is obtained. If such stockholder approval is not obtained within one hundred and thirty (130) days after such Common Units are presented for redemption or the stockholders have voted against the issuance of the Ashford Inc. Common Stock and payment of the Ashford Inc. Common Stock, the Company will distribute to the Redeeming Member any distributions pursuant to Section 8.1 that were not made after the Specified Redemption Date with respect to the Common Units redeemed because of the provisions of Section 7.3(a), the Company shall pay to the Redeeming Member the Cash Amount no later than the earlier of (i) ten (10) days after stockholders have voted against the issuance of the Ashford Inc. Common Stock, or (ii) one hundred and thirty (130) days after such Common Units are presented for redemption, together with interest on such Cash Amount from the Specified Redemption Date to the date of payment at the rate equal to the lesser of (i) Ashford Inc.’s annual dividend rate on Ashford Inc. Common Stock for the twelve (12) month period prior to the Valuation Date and based upon the Cash Amount for Common Units redeemed, or (ii) eight percent (8%).
(c) Notwithstanding the provisions of Section 7.3(a) and Section 7.3(b), a Member shall not be entitled to receive Ashford Inc. Common Stock if the delivery of Ashford Inc. Common Stock to such Member on the Specified Redemption Date (or such later date permitted by Section 8.5(c)(17.3(b), as applicable) by Ashford OAINC Inc. pursuant to Section 7.3(b) would be prohibited under the Charter, as amended or (b) restated from time to time. Without limiting the effect of the preceding sentence, no Person shall be permitted to receive Ashford Inc. Common Stock if as a result of, and after giving effect to, such exercise any Person would Beneficially Own (as defined in the Articles of Incorporation of Original Ashford II Inc., as amended or restated from time to time) more than 9.8% of the total number of issued of shares of outstanding Ashford Inc. Common Stock, unless waived by the board of directors of Ashford Inc. in its sole discretion. To the extent any attempted redemption for Ashford Inc. Common Stock would be a violation of this Section 7.3(c), it shall, to the Redemptionfullest extent permitted by law, neither be null and void ab initio. The Cash Amount shall be paid in such instances, in accordance with the Tendering Party nor any Related Party shall own REIT Shares terms set forth in violation Section 7.3(a) or Section 7.3(b). Should the Manager, elect, or be deemed to elect, to satisfy a Redemption Right by paying the Redeeming Member the Ashford Inc. Common Stock Amount, then subject to the provisions of this Section 7.3(c), Ashford Inc. agrees to deliver to Ashford OAINC Inc. the Aggregate Share Ownership Limit (or, if applicable, Ashford Inc. Common Stock Amount within such time period to allow Ashford OAINC Inc. and the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requireManager to timely satisfy their obligations under this Section 7.3.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 Each Member covenants and agrees with the Manager and the Company that all Common Units delivered for redemption shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days delivered to the extent required for Company, Ashford OAINC Inc., or their Affiliates, as the Partnership case may be, free and clear of all liens and, notwithstanding anything contained in this Agreement to the contrary, neither the Manager, Ashford OAINC Inc., (nor any of their Affiliates) nor the Company shall be under any obligation to acquire Common Units which are or the General Partner may be subject to obtain financing to be used to make such payment any liens. Each Member further agrees that, if any state or local property transfer tax is payable as a result of the Cash Amounttransfer of its Common Units to the Company or Ashford OAINC Inc., by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possiblesuch Member shall assume and pay such transfer tax.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate Ashford Inc. Common Stock issued pursuant to Section 7.3(b) may contain such legends regarding restrictions on the ability of the Limited Partners transfer as Ashford Inc. in good faith determines to exercise their Redemption Rights be necessary or advisable in order to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” comply with restrictions on transfer under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable and applicable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicablesecurities laws.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Redemption Right. (a) Subject to this Section 8.5 and the provisions of A. Except as otherwise set forth in any agreements separate agreement entered into between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each a Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (and subject to the terms and conditions set forth hereinherein or therein, on or after the date that is 14 months from the date of issuance of a Common Unit to a Limited Partner, such Limited Partner (other than the Company or any Subsidiary of the Company) shall have the right (the “Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Limited Partner (such Common Units (the being hereafter referred to as “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable onAmount; unless the terms of this Agreement or a separate agreement entered into between the Partnership and the Holder of such Common Units expressly provide that such Common Units are not entitled to the Redemption Right. The Partnership may, in the General Partner’s sole and absolute discretion, redeem Tendered Units at the request of the Holder of such Common Units prior to the end of the applicable 14 month period (or such other period as may be specified in any combination thereofseparate agreement entered into between the Partnership and a Limited Partner). Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the Holders of such Common Units, all Common Units shall be entitled to the Redemption Right. The Tendering Partner (as defined below) shall have no right, with respect to any Common Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right right (the “Tendering PartyPartner”). A Tendering Party The Cash Amount shall be deemed to have offered to sell the Tendered Units described payable in accordance with instructions set forth in the Notice of Redemption to the General Tendering Partner and on the Specified Redemption Date. Any Common Units redeemed by the Partnership pursuant to this Section 8.5A shall be cancelled upon such redemption.
B. Notwithstanding the provisions of Section 8.5A above, if a Limited Partner has delivered to the General Partner a Notice of Redemption then the Company may, in its sole and absolute discretiondiscretion (subject to Section 8.5D), elect to purchase directly assume and satisfy the Partnership’s Redemption Right obligation and acquire such some or all of the Tendered Units by paying from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the Company so elects, the Tendering Partner shall sell the Tendered Units to the Tendering Party either the Cash Amount or Company in exchange for the REIT Shares Amount. Within 15 days of receipt of a Notice of RedemptionIn such event, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Tendering Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice have no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require cause the Partnership to redeem all such Tendered Units. The Company shall give such Tendering Partner written notice of its election on or a portion before the close of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective business on the fifth Business Day after its receipt of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units Notice of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such PartnerRedemption. The Tendering Party Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, submit (i) such information, certification or affidavit as the General Partner, acting as a distinct legal entity, shall assume directly Company may reasonably require in connection with the obligation with respect thereto and shall satisfy application of the Tendering Party’s exercise of its Redemption Right, Ownership Limit to any such acquisition and (ii) such transaction shall be treatedwritten representations, for federal income tax purposesinvestment letters, as a Transfer by legal opinions or other instruments necessary, in the Tendering Party of such Tendered Units Company’ view, to effect compliance with the General Partner in exchange for REIT SharesSecurities Act. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions those provided in the Article Articles of Incorporation, Incorporation or the bylaws Bylaws of the General PartnerCompany, the Securities Act and Act, relevant state securities or “blue sky” lawssky laws and any applicable agreements with respect to such REIT Shares entered into by the Tendering Partner. No Notwithstanding any delay in such delivery (but subject to Section 8.5D), the Tendering Party Partner shall be deemed the owner of such REIT Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date. In addition, the REIT Shares for which the Common Units might be exchanged shall also bear all legends deemed necessary or appropriate by the Company. Neither any Tendering Partner whose Tendered Units are acquired by the General Partner Company pursuant to this Section 8.5B, any Partner, any Assignee nor any other interested Person shall have any right to require or cause the Company to register, qualify or require the General Partner to register list any REIT Shares owned or qualify held by such Person, whether or not such REIT Shares are issued pursuant to this Section 8.5B, with the Commission, with any federal or state securities agency commissioner, department or agency, under the Securities Act or to list such REIT Shares on the Exchange Act or with any stock exchange; unless subject to a separate written agreement pursuant to which the Company has granted registration or similar rights to any such Person.
C. Each Tendering Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same. Each Tendering Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units to the General Partner (or its designee), such Tendering Partner shall assume and pay such transfer tax. Each Tendering Partner further agrees to pay to the Partnership the amount of any Withholding Payment or other tax withholding due upon the redemption of Tendered Units and authorizes the Partnership to retain such portion of the Cash Amount as the Partnership reasonably determines is necessary to satisfy its Withholding Payment or other tax withholding obligations. In the event the Company elects to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount, the Tendering Partner agrees to pay to the Company the amount of any Withholding Payment or other tax withholding due upon the redemption of Tendered Units and, in the event the Tendering Partner has not paid or made arrangements satisfactory to the Company, it its sole discretion, to pay the amount of any such Withholding Payment or other tax withholding prior to the Specified Redemption Date, the Company, in its sole discretion, may elect to either cancel such exchange (in which case the Tendering Partner’s exercise of the Redemption Right will be null and void ab initio), satisfy such Withholding Payment or other tax withholding obligation by retaining REIT Shares with a fair market value, as determined by the Company in its sole discretion, equal to the amount of such obligation, or satisfy such Withholding Payment or other tax withholding obligation using amounts paid by the Partnership, which amounts shall be treated in the manner set forth in Section 5.6 (i.e., by treating such amount as a Withholding Payment).
D. Notwithstanding the provisions of Section 8.5(a8.5A, Section 8.5B, Section 8.5C or any other provision of this Agreement, a Limited Partner (i) shall not be entitled to effect the Redemption Right for cash or an exchange for REIT Shares to the extent that (if the Company were to elect to acquire the Tendered Units for REIT Shares in accordance with Section 8.5B) the ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the Specified Redemption Date could cause such Partner or any other Person to violate the Ownership Limit and this Section 8.5(b), the Tendering Parties (ii) shall have no rights under this Agreement that to acquire REIT Shares which would otherwise be prohibited under the CharterArticles of Incorporation. To the extent any attempted redemption or exchange for REIT Shares would be in violation of this Section 8.5D, it shall be null and void ab initio and such Limited Partner shall not acquire any rights or economic interest in the cash otherwise payable upon such redemption or the REIT Shares otherwise issuable upon such exchange.
E. Notwithstanding anything herein to the contrary (c) In connection but subject to Section 8.5D), with an exercise of the Redemption Right respect to any redemption or exchange for REIT Shares pursuant to this Section 8.5, : (i) without the Tendering Party shall submit the following to consent of the General Partner, each Limited Partner may effect the Redemption Right only one time in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and each fiscal quarter; (ii) any Related Party and (b) representing that, after giving effect to without the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess consent of the Aggregate Share Ownership Limit or General Partner, each Limited Partner may not effect the Redemption Right for less than 1,000 Common Share Ownership Limit (Units or, if applicable the Excepted Holder Limit);
Limited Partner holds less than 1,000 Common Units, all of the Common Units held by such Limited Partner; (iiiii) A written representation that neither without the Tendering Party nor consent of the General Partner, each Limited Partner may not effect the Redemption Right during the period after the Partnership Record Date with respect to a distribution and before the record date established by the Company for a distribution to its common stockholders of some or all of its portion of such distribution; (iv) the consummation of any Related Party has any intention to acquire any additional redemption or exchange for REIT Shares prior shall be subject to the closing expiration or termination of the Redemption applicable waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended; and (v) each Tendering Partner shall continue to own all Common Units subject to any redemption or exchange for REIT Shares, and be treated as a Limited Partner with respect to such Common Units for all purposes of this Agreement, until such Common Units are either paid for by the Partnership pursuant to Section 8.5A hereof or transferred to the Company and paid for by the issuance of the REIT Shares, pursuant to Section 8.5B hereof on the Specified Redemption Date;
(iii) An undertaking to certify, at and as . Until a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership Tendering Partner shall have no rights as a stockholder of REIT Shares the Company with respect to such Tendering Partner’s Common Units.
F. All Common Units acquired by the Tendering Party Company pursuant to Section 8.5B hereof shall automatically, and any Related Party remain unchanged from that disclosed without further action required, be converted into and deemed to be Limited Partner Interests and held by the Company in its capacity as a Limited Partner in the affidavit required by Partnership.
G. In the event that the Partnership issues additional Partnership Interests to any Additional Limited Partner pursuant to Section 8.5(c)(1) or (b) after giving effect to the Redemption4.2, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requireshall make such revisions to this Section 8.5 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
H. For the avoidance of doubt, (di) Any Cash Amount to be paid to a Tendering Party any redemption or exchange for REIT Shares pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that is subject to Section 11.6.D-I and (ii) the General Partner may elect impose annual volume limits on redemptions (and transfers) as it determines are appropriate to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for avoid the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur being treated as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) .
I. In the Partnership’s assets being considered “plan assets” with event that the meaning General Partner is aware of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act audit or other comparable state law, (f) the registration of the Partnership as formal or informal proceedings that could give rise to an investment company under the Investment Company Act, (g) the registration of the PartnershipImputed Underpayment Amount with respect to any Tendered Units, the General Partner may condition any redemption or any Affiliate thereof exchange of such Tendered Units on the Tendering Partner making arrangements (that is not already registered such as an investment adviser under the Advisers Actescrows or letters of credit) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, satisfactory to the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when to secure the General Partner determines that imposing Tendering Partner’s potential indemnification obligations should such restrictions is necessary, proceedings lead to the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy imposition of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) Imputed Underpayment Amount with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5such Tendered Units.
Appears in 1 contract
Samples: Limited Partnership Agreement (DiamondRock Hospitality Co)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B and 8.6.C, on or after the provisions date one (1) year after the closing of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held initial public offering of REIT Shares by themthe General Partner, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the “Redeeming Partner”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Partnership Units subject to the Notice of Redemption pursuant to Section 8.6.B. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Partnership Units, all of the “Tendering Party”)Partnership Units held by such Partner. A Tendering Party The Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distributions paid on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
B. Notwithstanding the provisions of Section 8.6.A, a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Tendered Partnership Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Partnership Units by paying to the Tendering Party Redeeming Partner either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether as elected by the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request in its sole and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(eabsolute discretion)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, whereupon the Tendering Party General Partner shall sell acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five (5) Business Days after the receipt by the General Partner of such Notice of Redemption. Unless the General Partner (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to its right to purchase Partnership Units under this Section 8.6.B, the General Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner’s exercise of the Tendered Redemption Right. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner’s exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner’s Partnership Units to the General Partner. Each Redeeming Partner in exchange for a number of REIT Shares equal agrees to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify execute such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(d) Any Cash Amount C. Notwithstanding the provisions of Section 8.6.A and Section 8.6.B, a Partner shall not be entitled to be paid to a Tendering Party exercise the Redemption Right pursuant to this Section 8.5 shall be paid 8.6.A if the delivery of REIT Shares to such Partner on the Specified Redemption Date; provided, however, that Date by the General Partner may elect pursuant to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership Section 8.6.B (regardless of whether or not the General Partner would in fact exercise its rights under Section 8.6.B) would be prohibited under the Articles of Incorporation.
D. Notwithstanding anything contained in Sections 8.6.A, 8.6.B and 8.6.C, no Partner shall be entitled to obtain financing exercise the Redemption Right pursuant to be used Section 8.6.A with respect to make any Preferred Partnership Unit unless (i) such payment of Preferred Partnership Unit has been issued to and is held by a Partner other than the Cash AmountGeneral Partner, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, and (ii) the General Partner agrees has expressly granted to use commercially reasonable efforts such Partner the right to cause the closing of the acquisition of Tendered redeem such Preferred Partnership Units hereunder pursuant to occur as quickly as reasonably possible.Section 8.6.A.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the E. Preferred Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice Units shall be accompanied by a copy of an opinion of counsel to the Partnership which states thatredeemed, if at all, only in the opinion of accordance with such counsel, restrictions redemption rights or options as are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) set forth with respect to a Redemption such Preferred Partnership Units (or class or series thereof) in connection with an exercise of Redemption Rights pursuant to this Section 8.5the instruments designating such Preferred Partnership Units (or class or series thereof).
Appears in 1 contract
Samples: Limited Partnership Agreement (Highwoods Properties Inc)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.05(b), 8.05(c), 8.05(d), 8.05(e) and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them8.05(f), each Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Company) shall have the right (subject to the terms "Redemption Right"), on or after the first anniversary of the date on which he acquires Partnership Units from the Partnership (or such later or earlier date as shall be determined in the sole and conditions set forth herein) absolute discretion of the General Partner at the time of the issuance of the Partnership Units), to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units (the “Tendered Units”) held by such Limited Partner at a redemption price equal to and in exchange for REIT Shares issuable on, or a form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the Redemption Right (the “Tendering Party”"Redeeming Partner"). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the Company elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption pursuant to the General Partner Section 8.05(b); and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.05(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership to redeem Tendered Units and agrees to acquire described in the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares Notice of Redemption to the Tendering Party pursuant Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the terms set forth in this Section 8.5(b), in which case, (i) Redeeming Partner either the General Partner, acting as a distinct legal entity, shall assume directly Cash Amount or 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 purposesCompany Shares Amount, as a Transfer elected by the Tendering Party of such Tendered Units to the General Partner Company (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party Company shall sell acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the Company shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five Business Days after the receipt by the Company of such Notice of Redemption. Unless the Company (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.05(b), the Company shall not have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of the Tendered Redemption Right. In the event the Company shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 8.05(b), the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the Company, as the case may be, shall treat the transaction between the Company and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Partnership Units to the General Company. Each Redeeming Partner agrees to execute such documents as the Company may reasonably require in exchange for a number connection with the issuance of REIT Company Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit Redemption Right.
(as calculated in accordance with the Charterc) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a8.05(a) and this Section 8.5(b8.05(b), the Tendering Parties a Limited Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right if the delivery of Company Shares to such Partner on the Specified Redemption Date by the Company pursuant to this Section 8.5, 8.05(b) (regardless of whether or not the Tendering Party shall submit the following to the General Partner, Company would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.05(b)) would (i) A written affidavitresult in such Partner or any other person owning, dated the same date as the Notice of Redemptiondirectly or indirectly, (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 Company Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (oras defined in the Certificate of Incorporation) and calculated in accordance therewith, if applicable except as provided in the Excepted Holder Limit);
Certificate of Incorporation, (ii) A written representation that neither result in the Tendering Party nor any Related Party has any intention to acquire any additional capital stock of Patriot REIT Shares prior to being owned by fewer than 100 persons within the closing meaning of Section 856(a)(5) of the Redemption on Code, except as provided in the Specified Redemption Date;
Certificate of Incorporation, (iii) An undertaking to certify, at and as a condition to result in Patriot REIT being "closely held" within the closing meaning of Section 856(h) of the Redemption on the Specified Redemption DateCode, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any cause Patriot REIT to own, directly or constructively, 10% or more of the ownership interests in a tenant of the real property of Patriot REIT, the REIT Partnership, or a subsidiary of the REIT Partnership, within the meaning of Section 856(d)(2)(B) of the Code, or (v) cause the acquisition of Company Shares by such Limited Partner to be "integrated" with any other documents distribution of Company Shares for purposes of complying with the registration provisions of the Securities Act of 1933, as amended (the General "Securities Act"). The Company, in its sole discretion, may waive the restriction on redemption set forth in this Section 8.05(c); provided, -------- however, that in the event such restriction is waived, the Redeeming Partner may reasonably require------- shall be paid the Cash Amount.
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Partner pursuant to this Section 8.5 8.05 shall be paid on the Specified Redemption Date; provided, however, -------- ------- that the General Partner Company may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner Company to obtain cause additional Company Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner Company agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(e) In the event that the General Partner permits the pledge of a Limited Partner's Partnership Units to a lender, the General Partner may agree to allow such lender, upon foreclosure of such Partnership Units, to redeem such Partnership Units prior to the expiration of the one-year period described in section 8.05(a); provided, that any such redemption shall be effected by the Partnership in the form of the Cash Amount and shall be subject to any other restrictions imposed on the exercise by a Limited Partner of the Redemption Right as set forth in this Section 8.05.
(f) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “"publicly traded partnership” " under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a "Restriction Notice") to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea "publicly traded partnership" under section 7704 of the Code. Any such restriction shall become effective on the later of (i) the fifth business day after the Restriction Notice is received by the Limited Partner or (ii) the date on which the regulations under section 7704 of the Code that would cause the Partnership to be classified as a "publicly traded partnership" becomes effective.
(fg) A fee may be charged (Notwithstanding any other than to provision of this Agreement, the Adviser, Special Limited Partner or their Affiliates) with respect to a holders of Preferred Units shall not have the Redemption Right specified in connection with an exercise of Redemption Rights pursuant to this Section 8.58.05.
Appears in 1 contract
Samples: Limited Partnership Agreement (Patriot American Hospitality Operating Co\de)
Redemption Right. (a) Subject to this Section 8.5 8.04(c) and the provisions of any agreements agreement between the Partnership and one or more Limited Partners with respect to Partnership Partners, beginning on the date that is twelve months after the date of issuance of any Common Units held by them(treating any Common Units that are issued upon the conversion of LTIP Units as having been issued when the LTIP Units into which they were converted were issued), each Limited Partner (other than the General Partner, after holding Xxxxxxxxx REIT or any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Subsidiary of Xxxxxxxxx REIT) shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such Partnership Limited Partner’s Common Units (at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)Amount. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to the General PartnerXxxxxxxxx REIT) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party , and such notice shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to irrevocable unless otherwise agreed upon by the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices one Notice of Redemption during each calendar yearquarter unless otherwise agreed upon by the General Partner. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership one thousand (1,000) Common Units or, if such Limited Partner holds less than 1,000 Partnership one thousand (1,000) Common Units, all of the Partnership Common Units held by such Limited Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Common Units so redeemed, to receive any distribution paid with respect to Partnership Common Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the provisions of Section 8.04(a) hereof, if a Limited Partner exercises the Redemption Right by delivering to the Partnership a Notice of Redemption, then the General Partner elects may, in its sole and absolute discretion, elect to assume the obligation from the Partnership cause Xxxxxxxxx REIT to redeem Tendered Units purchase directly and acquire some or all of, and in such event Xxxxxxxxx REIT agrees to purchase and acquire, such Common Units by paying to the Redeeming Limited Partner the REIT Shares Amount, whereupon Xxxxxxxxx REIT shall acquire the Tendered Common Units tendered for redemption by the Redeeming Limited Partner and Xxxxxxxxx REIT Shares rather than cashshall be treated for all purposes of this Agreement as the owner of such Common Units. In the event Xxxxxxxxx REIT shall exercise its right to satisfy the Redemption Right in the manner described in the preceding sentence, then the Partnership shall direct have no obligation to pay any amount to the General Redeeming Limited Partner with respect to issue such Redeeming Limited Partner’s exercise of the Redemption Right, and deliver each of the Redeeming Limited Partner, the Partnership and Xxxxxxxxx REIT shall treat the transaction between Xxxxxxxxx REIT and the Redeeming Limited Partner as a sale of the Redeeming Limited Partner’s Common Units to Xxxxxxxxx REIT for federal income tax purposes. Each Redeeming Limited Partner agrees to execute such documents as Xxxxxxxxx REIT may reasonably require in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Sections 8.04(a) and 8.04(b) hereof, a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Limited Partner on the Tendering Party Specified Redemption Date by Xxxxxxxxx REIT pursuant to Section 8.04(b) hereof (regardless of whether or not Xxxxxxxxx REIT would in fact exercise its rights under Section 8.04(b)) would (i) be prohibited under the terms Articles or (ii) cause the acquisition of REIT Shares by such Limited Partner to be “integrated” with any other distribution of REIT Shares or Common Units for purposes of complying with the registration provisions of the Securities Act. Xxxxxxxxx REIT, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 8.5(b8.04(c), in which case, .
(id) the General Partner, acting as a distinct legal entity, shall assume directly the obligation with respect thereto Each Redeeming Limited Partner covenants and shall satisfy the Tendering Party’s exercise of its Redemption Right, and (ii) such transaction shall be treated, for federal income tax purposes, as a Transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered agrees that all Common Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right redemption pursuant to this Section 8.5, the Tendering Party shall submit the following 8.04 will be delivered to the General PartnerPartnership or Xxxxxxxxx REIT free and clear of all liens, in addition claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the RedemptionCommon Units, neither the Tendering Party Partnership nor Xxxxxxxxx REIT shall be under any Related Party will own REIT Shares obligation to acquire such Common Units pursuant to Section 8.04(a) or Section 8.04(b) hereof. Each Redeeming Limited Partner further agrees that, in excess the event any state or local property transfer tax is payable as a result of the Aggregate Share Ownership Limit or the transfer of its Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior Units to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certifyPartnership or Xxxxxxxxx REIT, at such Redeeming Limited Partner shall assume and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirepay such transfer tax.
(de) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner Xxxxxxxxx REIT to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Shares Share Amount to be issued or otherwisepaid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, the General Partner Xxxxxxxxx REIT agrees to use its commercially reasonable efforts to cause the closing of the acquisition of Tendered redeemed Common Units hereunder to occur as quickly as reasonably possible.
(ef) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the General Partner and the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If the General Partner determines that Common Units are “United States real property interests” within the meaning of Section 897(c) of the Code, a Redeeming Limited Partner claiming an exemption from withholding must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership, Xxxxxxxxx REIT or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units, and such Redeeming Limited Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(g) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary or reasonable to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the foregoing, Partnership being treated as applicablea “publicly traded partnership” under Section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Agreement of Limited Partnership (Ellington Residential Mortgage REIT)
Redemption Right. (a) Subject to this Section 8.5 7.07(b) and the provisions of any agreements other applicable agreement between the Partnership and one or more a Limited Partners with respect to Partnership Units held by themPartner, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) but not the obligation to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Units (Limited Partner at a redemption price per Common Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)Amount. Any The Redemption Right shall be exercised pursuant to a Notice one or more Notices of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner (or the Limited Partner’s attorney-in-fact) who is exercising the Redemption Right (the “Tendering PartyRedeeming Partner”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Common Units subject to the Notice of Redemption pursuant to Section 7.07(b). A Tendering Party Limited Partner may not exercise the Redemption Right for less than 10 Units or, if such Limited Partner holds less than 10 Units, all of the Units held by such Partner. The Redeeming Partner shall have no right, with respect to any Units so redeemed, to receive any Distributions paid after the Specified Redemption Date.
(b) Notwithstanding the provisions of Section 7.07(a), a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Tendered Common Units described in the Notice of Redemption to the General Partner Partner, and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either Redeeming Partner the Cash Redemption Amount on the Specified Redemption Date, whereupon the General Partner shall acquire the Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. Unless the General Partner shall exercise its right to purchase Units from the Redeeming Partner pursuant to this Section 7.07(b), the General Partner shall not have any obligation to the Redeeming Partner or the REIT Shares AmountPartnership with respect to the Redeeming Partner’s exercise of the Redemption Right. Within 15 days of receipt In the event the General Partner shall exercise its right to purchase Units with respect to the exercise of a Notice Redemption Right in the manner described in the first sentence of Redemptionthis Section 7.07(b), the Partnership will send shall have no obligation to pay any amount to the Limited Redeeming Partner submitting with respect to such Redeeming Partner’s exercise of such Redemption Right, and each of the Notice of Redemption a response stating whether Redeeming Partner, the Partnership and the General Partner has determined shall treat the applicable Partnership transaction between the General Partner and the Redeeming Partner as a sale of the Redeeming Partner’s Units to the General Partner for federal income tax purposes. Each Redeeming Partner agrees to execute such documents as the General Partner may reasonably require in connection with the issuance of REIT Shares upon exercise of the Redemption Right including, but not limited to, written representations as to tax or securities law matters, and any certificates representing such REIT Shares may bear legends regarding federal and state securities transfer restrictions and imposing reasonable requirements for any transfer.
(c) The General Partner shall at all times reserve and keep available for issuance upon the exercise of the Redemption Right such number of its authorized but unissued REIT Shares as will be redeemed for sufficient to permit the exercise in full of the Redemption Right by all holders of Units. All REIT Shares, when issued upon exercise of a Redemption Right, shall be duly and validly issued and fully paid and nonassessable, and not subject to preemptive rights.
(d) The Redemption Ratio is 1.0, subject to adjustments as follows:
(i) In case the General Partner shall (A) pay or make a dividend or other distribution on the outstanding REIT Shares in REIT Shares, (B) subdivide or reclassify the Cash Amountoutstanding REIT Shares into a greater number of REIT Shares, or (C) combine or reclassify the outstanding REIT Shares into a combination thereof. In either casesmaller number of REIT Shares, the Limited Partner Redemption Ratio in effect at the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution or subject to such subdivision, combination or reclassification shall be proportionately adjusted so that a holder of Units shall be entitled to withdraw receive, upon redemption thereof, the Notice number of Redemption if (i) it provides notice REIT Shares which the holder would have owned at the opening of business on the day following the date fixed for such determination had such Units been redeemed immediately prior to the Partnership that it wishes to withdraw the request and such determination.
(ii) In case the Partnership receives shall subdivide or reclassify the notice no outstanding Units into a greater number of Units, the Redemption Ratio in effect at the opening of business on the day following the date fixed for the determination of Unit holders subject to such subdivision or reclassification shall be proportionately adjusted so that a holder of Units shall be entitled to receive, upon redemption thereof, the number of REIT Shares which the holder would have owned at the opening of business on the day following the date fixed for such determination had such Units been redeemed immediately prior to such determination.
(iii) In case the General Partner (A) shall issue rights or warrants to all holders of REIT Shares entitling them to subscribe for or purchase REIT Shares at a price per share less than two business days prior the Current Market Price per REIT Share on the date fixed for the determination of shareholders entitled to the Specified Redemption Date. Notwithstanding the foregoingreceive such rights or warrants, the Special Limited Partner and the Adviser (B) shall not issue similar rights or warrants to all holders of Units entitling them to subscribe for or purchase REIT Shares or Units at a comparable price (determined, in the case of Partnership Units received Units, by reference to the Redemption Ratio), and (C) cannot issue such rights or warrants to a Person exercising a Redemption Right as otherwise required by the definition of REIT Shares Amount in consideration Section 1.04, then the Redemption Ratio in effect at the opening of business on the day following the date fixed for management feessuch determination shall be increased by multiplying such Redemption Ratio by a fraction of which the numerator shall be the number of REIT Shares outstanding at the close of business on the date fixed for such determination plus the number of REIT Shares so offered for subscription or purchase, and of which the denominator shall be the number of REIT Shares outstanding at the close of business on the date fixed for such determination plus the number of REIT Shares which the aggregate offering price of the total number of REIT Shares so offered for subscription would purchase at such Current Market Price per share, such increase of the Redemption Ratio to become effective immediately after the opening of business on the day following the date fixed for such determination.
(iv) In case the General Partner shall, by dividend or otherwise, distribute to all holders of its common stock (i) shares of capital stock of any class other than its common stock, (ii) evidences of its indebtedness or (iii) assets (excluding any rights or warrants referred to in subparagraph (iii) of this subsection (d), any cash dividend or distribution lawfully paid under the laws of the state of incorporation of the General Partner, and any dividend or distribution referred to in subsection (d)(i)) and the General Partner shall not cause a corresponding distribution to be made to all holders of Units, the Performance AllocationRedemption Ratio shall be adjusted so that the same shall equal the ratio determined by multiplying the Redemption Ratio in effect immediately prior to the close of business on the date fixed for the determination of shareholders entitled to receive such distribution by a fraction of which the numerator shall be the Current Market Price per REIT Share on the date fixed for such determination, and of which the denominator shall be such Current Market Price per REIT Share less the fair market value (as determined by the Board of Directors of the General Partner, whose determination shall be conclusive and described in a Board resolution certified by the Secretary of the General Partner and delivered to the holders of the Units) of the portion of the shares of capital stock or evidences of indebtedness or assets so distributed applicable to one REIT Share, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such distribution.
(v) In case of any reclassification of the REIT Shares (including, but not limited to, any reclassification upon a consolidation or merger in which the General Partner is the continuing corporation) into securities other than REIT Shares, the assignees Units shall thereafter be redeemable into the kind and amount of shares of such securities receivable upon such reclassification by a holder of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion number of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or into which such Units would be redeemable immediately prior to such reclassification.
(vi) For purposes of this subsection (d), if the Cash Amount (at General Partner receives consideration other than cash for any of its securities, the Adviser’s or Special Limited Partner’s election) unless value of such consideration is to be determined by the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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, reasonable business judgment and (ii) the basis for such transaction valuation shall be treated, for federal income tax purposes, as a Transfer by the Tendering Party of such Tendered Units to the General Partner included in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be certificate delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h5.03(c), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Duke Realty Limited Partnership/)
Redemption Right. (a) Subject to Section 2.1(c), (i) on or after the date that is two (2) years after the date of this Section 8.5 and the provisions of any agreements between the Agreement, each Contributing Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Summerfield Limited Partner other than who holds "Two Year Lock-up Units" and (ii) on or after the General Partner, after holding any Partnership Units for at least date that is one year (or such shorter period as consented to by after the General date of this Agreement each Summerfield Limited Partner in its sole discretion), who holds "One Year Lock-up Units" shall have the right (subject the "Redemption Right") to tender to the terms and conditions set forth herein) to require the REIT Partnership to redeem (for redemption on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units held by such Contributing Partnership or Summerfield Limited Partner at a redemption price equal to and in the form of the Redemption Amount by submitting to the REIT Partnership a Notice of Redemption; provided, however, that the number of Partnership Units tendered for redemption by all Contributing Partnerships and Summerfield Limited Partners on any Specified Redemption Date shall not exceed three percent (3%) of the “Tendered Units”) in exchange for total number of Common Partnership Units and preferred partnership units of the REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Partnership outstanding on such Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Contributing Partnership or Summerfield Limited Partner who is exercising the Redemption Right (the “Tendering Party”"Redeeming Partner"). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption ; provided, however, that no Contributing Partnership or Summerfield Limited Partner may deliver to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices one (1) Notice of Redemption during each calendar yearquarter. If more than one Contributing Partnership or Summerfield Limited Partner exercises the Redemption Right (each, a "Redeeming Partner") to the effect that the number of Partnership Units tendered for redemption on a Specified Redemption Date exceeds the percentage of Partnership Units specified in the preceding sentence, the number of Partnership Units that may be tendered for redemption by each Redeeming Partner shall be reduced proportionally based on the ratio the number of Partnership Units tendered for redemption by each Redeeming Partner bears to the total number of Partnership Units tendered for redemption on such Specified Redemption Date. A Limited Partner, other than the Special Summerfield Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Partnership Units or, if such Summerfield Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such Summerfield Limited Partner. The Tendering Party Notwithstanding the foregoing limitations on the exercise of the Redemption Right, if a Summerfield Limited Partner, as permitted by the Contribution Agreement or consented to by the General Partner in accordance with the REIT Partnership Agreement, pledges his Partnership Units to a third-party lender in accordance with the terms of the Contribution Agreements and such lender forecloses on such Partnership Units, such lender shall have no rightbe entitled to exercise the Redemption Right with respect to such Partnership Units, as secured party on behalf of the Summerfield Limited Partner and without becoming a limited partner of the REIT Partnership, subject to the General Partner's prior receipt of such documentation as the General Partner shall reasonably request evidencing the pledge and the lender's rights to exercise the Redemption Right with respect to the Partnership Units. Except as may be otherwise provided in Section 5.2(a) of the REIT Partnership Agreement, the Redeeming Partner shall not be entitled, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units pursuant to the REIT Partnership Agreement if the record date for such distribution is on or after the Specified Redemption Date.
(b) If , unless the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units redemption is made for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be is not paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, as permitted by causing additional REIT Shares to be issued or otherwiseSection 2.1(c). Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states In that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Redemption and Registration Rights Agreement (Innkeepers Usa Trust/Fl)
Redemption Right. (a) A. Subject to Sections 3.2.B and 3.2.C, on or after the date of this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themAgreement, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Units held by such Partnership Units (the “Tendered Units”) in exchange Limited Partner for REIT Shares issuable on, or an aggregate amount equal to the Cash Amount payable onAmount, or any combination thereof, the Specified Redemption Date, as determined which shall be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Units subject to the Notice of Redemption pursuant to Section 3.2.B. Effective as of the Specified Redemption Date, the Redeeming Partner shall not receive any dividends or distributions with respect to any Units so redeemed. The Transferee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 3.2, and such Limited Partner shall be deemed to have assigned such rights to such Transferee and shall be bound by the exercise of such rights by such Transferee. In connection with any exercise of such rights by such Transferee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Transferee and not to such Limited Partner.
B. Notwithstanding the provisions of Section 3.2.A, a Limited Partner that exercises the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered number of Units described set forth in the Notice of Redemption to the General Partner Partner, and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party Redeeming Partner either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether as elected by the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request in its sole and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(eabsolute discretion)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell whereupon on such number of the Tendered Units to date the General Partner in exchange shall acquire the Units offered for a number of REIT Shares equal to redemption by the product of the REIT Shares Amount Redeeming Partner and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered treated for all purposes of this Agreement as the owner of such Units. If the General Partner shall elect to exercise its right to purchase Units under this Section 3.2.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five Trading Days after the receipt by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article such Notice of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” lawsRedemption. No Tendering Party whose Tendered Units are acquired by If the General Partner shall have any (in its sole and absolute discretion) elects not to exercise its right to cause or require purchase Units from the General Redeeming Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement3.2.B, the General Partner shall place appropriate restrictions on not have any obligation to the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Redeeming Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that or the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an the Redeeming Partner's exercise of the Redemption Rights pursuant to this Section 8.5.Right, and
Appears in 1 contract
Samples: Limited Partnership Agreement (Bradley Real Estate Inc)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of A. Except as otherwise set forth in any agreements separate agreement entered into between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each a Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (and subject to the terms and conditions set forth hereinherein or therein, on or after the date that is twelve (12) months from the date of issuance of a Common Unit to a Limited Partner, such Limited Partner (other than the Company or any Subsidiary of the Company) shall have the right (the “Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Limited Partner (such Common Units (the being hereafter referred to as “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable onAmount; unless the terms of this Agreement or a separate agreement entered into between the Partnership and the Holder of such Common Units expressly provide that such Common Units are not entitled to the Redemption Right. The Partnership may, in the General Partner’s sole and absolute discretion, redeem Tendered Units at the request of the Holder of such Common Units prior to the end of the applicable twelve (12) month period (or such other period as may be specified in any combination thereofseparate agreement entered into between the Partnership and a Limited Partner). Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the Holders of such Common Units, all Common Units shall be entitled to the Redemption Right. The Tendering Partner (as defined below) shall have no right, with respect to any Common Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right right (the “Tendering PartyPartner”). A Tendering Party The Cash Amount shall be deemed to have offered to sell the Tendered Units described payable in accordance with instructions set forth in the Notice of Redemption to the General Tendering Partner and on the Specified Redemption Date. Any Common Units redeemed by the Partnership pursuant to this Section 8.5A shall be cancelled upon such redemption.
B. Notwithstanding the provisions of Section 8.5A above, if a Limited Partner has delivered to the General Partner a Notice of Redemption then the Company may, in its sole and absolute discretiondiscretion (subject to Section 8.5D), elect to purchase directly assume and satisfy the Partnership’s Redemption Right obligation and acquire such some or all of the Tendered Units by paying from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the Company so elects, the Tendering Partner shall sell the Tendered Units to the Tendering Party either the Cash Amount or Company in exchange for the REIT Shares Amount. Within 15 days of receipt of a Notice of RedemptionIn such event, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Tendering Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice have no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require cause the Partnership to redeem all such Tendered Units. The Company shall give such Tendering Partner written notice of its election on or a portion before the close of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective business on the fifth Business Day after its receipt of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units Notice of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such PartnerRedemption. The Tendering Party Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, submit (i) such information, certification or affidavit as the General Partner, acting as a distinct legal entity, shall assume directly Company may reasonably require in connection with the obligation with respect thereto and shall satisfy application of the Tendering Party’s exercise of its Redemption Right, Ownership Limit to any such acquisition and (ii) such transaction shall be treatedwritten representations, for federal income tax purposesinvestment letters, as a Transfer by legal opinions or other instruments necessary, in the Tendering Party of such Tendered Units Company’ view, to effect compliance with the General Partner in exchange for REIT SharesSecurities Act. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions those provided in the Article Articles of Incorporation, Incorporation or the bylaws Bylaws of the General PartnerCompany, the Securities Act and Act, relevant state securities or “blue sky” lawssky laws and any applicable agreements with respect to such REIT Shares entered into by the Tendering Partner. No Notwithstanding any delay in such delivery (but subject to Section 8.5D), the Tendering Party Partner shall be deemed the owner of such REIT Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date. In addition, the REIT Shares for which the Common Units might be exchanged shall also bear all legends deemed necessary or appropriate by the Company. Neither any Tendering Partner whose Tendered Units are acquired by the General Partner Company pursuant to this Section 8.5B, any Partner, any Assignee nor any other interested Person shall have any right to require or cause the Company to register, qualify or require the General Partner to register list any REIT Shares owned or qualify held by such Person, whether or not such REIT Shares are issued pursuant to this Section 8.5B, with the Commission, with any federal or state securities agency commissioner, department or agency, under the Securities Act or to list such REIT Shares on the Exchange Act or with any stock exchange; unless subject to a separate written agreement pursuant to which the Company has granted registration or similar rights to any such Person.
C. Each Tendering Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same. Each Tendering Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units to the General Partner (or its designee), such Tendering Partner shall assume and pay such transfer tax. Each Tendering Partner further agrees to pay to the Partnership the amount of any tax withholding due upon the redemption of Tendered Units and authorizes the Partnership to retain such portion of the Cash Amount as the Partnership reasonably determines is necessary to satisfy its tax withholding obligations. In the event the Company elects to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount, the Tendering Partner agrees to pay to the Company the amount of any tax withholding due upon the redemption of Tendered Units and, in the event the Tendering Partner has not paid or made arrangements satisfactory to the Company, in its sole discretion, to pay the amount of any such tax withholding prior to the Specified Redemption Date, the Company may elect to either cancel such exchange (in which case the Tendering Partner’s exercise of the Redemption Right will be null and void ab initio), satisfy such tax withholding obligation by retaining REIT Shares with a fair market value, as determined by the Company in its sole discretion, equal to the amount of such obligation or satisfy such tax withholding obligation using amounts paid by the Partnership, which amounts shall be treated as a loan by the Partnership to the Tendering Partner in the manner set forth in Section 5.1B.
D. Notwithstanding the provisions of Section 8.5(a8.5A, Section 8.5B, Section 8.5C or any other provision of this Agreement, a Limited Partner (i) shall not be entitled to effect the Redemption Right for cash or an exchange for REIT Shares to the extent that (if the Company were to elect to acquire the Tendered Units for REIT Shares in accordance with Section 8.5B) the ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the Specified Redemption Date could cause such Partner or any other Person to violate the Ownership Limit and this Section 8.5(b), the Tendering Parties (ii) shall have no rights under this Agreement that to acquire REIT Shares which would otherwise be prohibited under the CharterArticles of Incorporation. To the extent any attempted redemption or exchange for REIT Shares would be in violation of this Section 8.5D, it shall be null and void ab initio and such Limited Partner shall not acquire any rights or economic interest in the cash otherwise payable upon such redemption or the REIT Shares otherwise issuable upon such exchange.
E. Notwithstanding anything herein to the contrary (c) In connection but subject to Section 8.5D), with an exercise of the Redemption Right respect to any redemption or exchange for REIT Shares pursuant to this Section 8.5, : (i) without the Tendering Party shall submit the following to consent of the General Partner, each Limited Partner may effect the Redemption Right only one time in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and each fiscal quarter; (ii) any Related Party and (b) representing that, after giving effect to without the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess consent of the Aggregate Share Ownership Limit or General Partner, each Limited Partner may not effect the Redemption Right for less than 1,000 Common Share Ownership Limit (Units or, if applicable the Excepted Holder Limit);
Limited Partner holds less than 1,000 Common Units, all of the Common Units held by such Limited Partner; (iiiii) A written representation that neither without the Tendering Party nor consent of the General Partner, each Limited Partner may not effect the Redemption Right during the period after the Partnership Record Date with respect to a distribution and before the record date established by the Company for a distribution to its common stockholders of some or all of its portion of such distribution; (iv) the consummation of any Related Party has any intention to acquire any additional redemption or exchange for REIT Shares prior shall be subject to the closing expiration or termination of the Redemption applicable waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended; and (v) each Tendering Partner shall continue to own all Common Units subject to any redemption or exchange for REIT Shares, and be treated as a Limited Partner with respect to such Common Units for all purposes of this Agreement, until such Common Units are either paid for by the Partnership pursuant to Section 8.5A hereof or transferred to the Company and paid for by the issuance of the REIT Shares, pursuant to Section 8.5B hereof on the Specified Redemption Date;
(iii) An undertaking to certify, at and as . Until a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership Tendering Partner shall have no rights as a stockholder of REIT Shares the Company with respect to such Tendering Partner’s Common Units.
F. All Common Units acquired by the Tendering Party Company pursuant to Section 8.5B hereof shall automatically, and any Related Party remain unchanged from that disclosed without further action required, be converted into and deemed to be Limited Partner Interests and held by the Company in its capacity as a Limited Partner in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirePartnership.
(d) Any Cash Amount G. In the event that the Partnership issues additional Partnership Interests to be paid to a Tendering Party any Additional Limited Partner pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement4.2, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by make such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant revisions to this Section 8.58.5 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
Appears in 1 contract
Samples: Limited Partnership Agreement (Gaming & Leisure Properties, Inc.)
Redemption Right. (a) Subject to this Section 8.5 7.07(b) and the provisions of any agreements other applicable agreement between the Partnership and one or more a Limited Partners with respect to Partnership Units held by themPartner, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) but not the obligation to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Units (Limited Partner at a redemption price per Common Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)Amount. Any The Redemption Right shall be exercised pursuant to a Notice one or more Notices of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner (or the Limited Partner’s attorney-in-fact) who is exercising the Redemption Right (the “Tendering PartyRedeeming Partner”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Common Units subject to the Notice of Redemption pursuant to Section 7.07(b). A Tendering Party Limited Partner may not exercise the Redemption Right for less than 1,000 Units or, if such Limited Partner holds less than 1,000 Units, all of the Units held by such Partner. The Redeeming Partner shall have no right, with respect to any Units so redeemed, to receive any Distributions paid after the Specified Redemption Date.
(b) Notwithstanding the provisions of Section 7.07(a), a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Tendered Common Units described in the Notice of Redemption to the General Partner Partner, and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either Redeeming Partner the Cash Redemption Amount on the Specified Redemption Date, whereupon the General Partner shall acquire the Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. Unless the General Partner shall exercise its right to purchase Units from the Redeeming Partner pursuant to this Section 7.07(b), the General Partner shall not have any obligation to the Redeeming Partner or the REIT Shares AmountPartnership with respect to the Redeeming Partner’s exercise of the Redemption Right. Within 15 days of receipt In the event the General Partner shall exercise its right to purchase Units with respect to the exercise of a Notice Redemption Right in the manner described in the first sentence of Redemptionthis Section 7.07(b), the Partnership will send shall have no obligation to pay any amount to the Limited Redeeming Partner submitting with respect to such Redeeming Partner’s exercise of such Redemption Right, and each of the Notice of Redemption a response stating whether Redeeming Partner, the Partnership and the General Partner has determined shall treat the applicable Partnership transaction between the General Partner and the Redeeming Partner as a sale of the Redeeming Partner’s Units to the General Partner for federal income tax purposes. Each Redeeming Partner agrees to execute such documents as the General Partner may reasonably require in connection with the issuance of REIT Shares upon exercise of the Redemption Right including, but not limited to, written representations as to tax or securities law matters, and any certificates representing such REIT Shares may bear legends regarding federal and state securities transfer restrictions and imposing reasonable requirements for any transfer.
(c) The General Partner shall at all times reserve and keep available for issuance upon the exercise of the Redemption Right such number of its authorized but unissued REIT Shares as will be redeemed for sufficient to permit the exercise in full of the Redemption Right by all holders of Units. All REIT Shares, when issued upon exercise of a Redemption Right, shall be duly and validly issued and fully paid and nonassessable, and not subject to preemptive rights.
(d) The Redemption Ratio is 1.0, subject to adjustments as follows:
(i) In case the General Partner shall (A) pay or make a dividend or other distribution on the outstanding REIT Shares in REIT Shares, (B) subdivide or reclassify the Cash Amountoutstanding REIT Shares into a greater number of REIT Shares, or (C) combine or reclassify the outstanding REIT Shares into a combination thereof. In either casesmaller number of REIT Shares, the Limited Partner Redemption Ratio in effect at the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution or subject to such subdivision, combination or reclassification shall be proportionately adjusted so that a holder of Units shall be entitled to withdraw receive, upon redemption thereof, the Notice number of Redemption if (i) it provides notice REIT Shares which the holder would have owned at the opening of business on the day following the date fixed for such determination had such Units been redeemed immediately prior to the Partnership that it wishes to withdraw the request and such determination.
(ii) In case the Partnership receives shall subdivide or reclassify the notice no outstanding Units into a greater number of Units, the Redemption Ratio in effect at the opening of business on the day following the date fixed for the determination of Unit holders subject to such subdivision or reclassification shall be proportionately adjusted so that a holder of Units shall be entitled to receive, upon redemption thereof, the number of REIT Shares which the holder would have owned at the opening of business on the day following the date fixed for such determination had such Units been redeemed immediately prior to such determination.
(iii) In case the General Partner (A) shall issue rights or warrants to all holders of REIT Shares entitling them to subscribe for or purchase REIT Shares at a price per share less than two business days prior the Current Market Price per REIT Share on the date fixed for the determination of shareholders entitled to the Specified Redemption Date. Notwithstanding the foregoingreceive such rights or warrants, the Special Limited Partner and the Adviser (B) shall not issue similar rights or warrants to all holders of Units entitling them to subscribe for or purchase REIT Shares or Units at a comparable price (determined, in the case of Partnership Units received Units, by reference to the Redemption Ratio), and (C) cannot issue such rights or warrants to a Person exercising a Redemption Right as otherwise required by the definition of REIT Shares Amount in consideration Section 1.04, then the Redemption Ratio in effect at the opening of business on the day following the date fixed for management feessuch determination shall be increased by multiplying such Redemption Ratio by a fraction of which the numerator shall be the number of REIT Shares outstanding at the close of business on the date fixed for such determination plus the number of REIT Shares so offered for subscription or purchase, and of which the denominator shall be the number of REIT Shares outstanding at the close of business on the date fixed for such determination plus the number of REIT Shares which the aggregate offering price of the total number of REIT Shares so offered for subscription would purchase at such Current Market Price per share, such increase of the Redemption Ratio to become effective immediately after the opening of business on the day following the date fixed for such determination.
(iv) In case the General Partner shall, by dividend or otherwise, distribute to all holders of its common stock (i) shares of capital stock of any class other than its common stock, (ii) evidences of its indebtedness or (iii) assets (excluding any rights or warrants referred to in subparagraph (iii) of this subsection (d), any cash dividend or distribution lawfully paid under the laws of the state of incorporation of the General Partner, and any dividend or distribution referred to in subsection (d)(i)) and the General Partner shall not cause a corresponding distribution to be made to all holders of Units, the Performance AllocationRedemption Ratio shall be adjusted so that the same shall equal the ratio determined by multiplying the Redemption Ratio in effect immediately prior to the close of business on the date fixed for the determination of shareholders entitled to receive such distribution by a fraction of which the numerator shall be the Current Market Price per REIT Share on the date fixed for such determination, and of which the denominator shall be such Current Market Price per REIT Share less the fair market value (as determined by the Board of Directors of the General Partner, whose determination shall be conclusive and described in a Board resolution certified by the Secretary of the General Partner and delivered to the holders of the Units) of the portion of the shares of capital stock or evidences of indebtedness or assets so distributed applicable to one REIT Share, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such distribution.
(v) In case of any reclassification of the REIT Shares (including, but not limited to, any reclassification upon a consolidation or merger in which the General Partner is the continuing corporation) into securities other than REIT Shares, the assignees Units shall thereafter be redeemable into the kind and amount of shares of such securities receivable upon such reclassification by a holder of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion number of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or into which such Units would be redeemable immediately prior to such reclassification.
(vi) For purposes of this subsection (d), if the Cash Amount (at General Partner receives consideration other than cash for any of its securities, the Adviser’s or Special Limited Partner’s election) unless value of such consideration is to be determined by the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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, reasonable business judgment and (ii) the basis for such transaction valuation shall be treated, for federal income tax purposes, as a Transfer by the Tendering Party of such Tendered Units to the General Partner included in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be certificate delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h5.03(c), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Duke Realty Limited Partnership/)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units (other than Class B Units) for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)discretion. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e))Class I Units. No A Limited Partner, Partner other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, Adviser may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of IncorporationCharter, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii2) 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;
(iii3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv4) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner Partner’s common stock from being owned by less than 100 persons and persons, the General Partner from being “closely held” within the meaning of Section section 856(h) of the Code, (c) and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the foregoing, Partnership be treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
(g) Except as otherwise agreed between a Class B Limited Partner and the General Partner, Class B Limited Partners may request redemption for cash of all or a portion of their Class B Units for any month by sending a Notice of Redemption to the Partnership within the same required period of notice that holders of REIT Shares may request the monthly repurchase of REIT Shares pursuant to the General Partner’s share repurchase plan, as in effect from time to time. Any Class B Units redeemed by the Partnership will be redeemed at the most recent Net Asset Value per Class B Unit (or 95% of the most recent Net Asset Value per Class B Unit for Class B Units redeemed within one year of issuance (other than Units issued pursuant to a distribution reinvestment or Class B Units held by the Special Limited Partner or the Adviser)) as of the date of redemption, effective on the same day that REIT Shares are repurchased for that month under the General Partner’s share repurchase plan. The total amount of redemptions of (i) Class B Units and (ii) Partnership Units with corresponding REIT Shares, will be subject to the same repurchase limitations as set forth in the General Partner’s share repurchase plan, except that such limitations will apply to such Partnership Units (including the Class B Units) instead of REIT Shares. The General Partner will be entitled to redeem up to the full amount of Partnership Units necessary to correspond to repurchases of REIT Shares under the General Partner’s share repurchase plan (subject to the repurchase limits of such share repurchase plan). If the General Partner repurchases less than the full amount of REIT Shares requested to be repurchased under the General Partner’s share repurchase plan in any month, then the percentage of outstanding Class B Units redeemed in such month shall not exceed the percentage of the aggregate NAV per REIT Share repurchased pursuant to the General Partner’s share repurchase plan for such month. In the event some but not all of the Class B Units submitted for redemption during any month are to be redeemed, the redemptions will be effected on a pro rata basis. Notwithstanding the foregoing, the Adviser will have the right to require the Partnership to redeem the full amount of its Class B Units without being subject to redemption limitations described herein.
Appears in 1 contract
Samples: Limited Partnership Agreement (Blackstone Real Estate Income Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each A. Each Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Company) shall have the right (the “Redemption Right”) (subject to the terms and conditions set forth hereinherein and in any other such agreement, as applicable) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Limited Partner (such Common Units (the being hereafter referred to as “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable onAmount; provided, that the terms of such Common Units do not provide that such Common Units are not entitled to the Redemption Right. Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the Holders of such Common Units, all Common Units shall be entitled to the Redemption Right. The Tendering Partner (as defined below) shall have no right, with respect to any combination thereofCommon Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right right (the “Tendering PartyPartner”). A Tendering Party The Cash Amount shall be deemed to have offered to sell the Tendered Units described payable in accordance with instructions set forth in the Notice of Redemption to the General Tendering Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If B. Each Limited Partner covenants and agrees with the General Partner elects to assume the obligation from the Partnership to redeem that all Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 delivered to the General Partner in exchange for REIT Shares. The percentage free and clear of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act be under no obligation to acquire the same. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number result of the transfer of its Tendered Units to the General Partner in exchange for a number of REIT Shares equal (or its designee), such Limited Partner shall assume and pay such transfer tax.
C. Notwithstanding anything herein to the product contrary, with respect to the redemption of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered Common Units by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restrictiona Limited Partner, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of IncorporationCompany, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit terms of the following to Common Units will include provisions as to: (i) how frequently the Limited Partner may redeem the Limited Partner’s Common Units without the consent of the General Partner; (ii) whether the General Partner may restrict redemptions, in addition due to a lack of liquidity at the Notice Partnership or otherwise; (iii) how many Common Units may be redeemed; and (iv) whether there will be any blackout periods where the Common Units may not be redeemed without the consent of Redemption:
(i) A written affidavitthe General Partner. Additionally, dated the same date as terms of the Notice of Redemption, Common Units will include provisions that: (a) disclosing the actual and constructive ownershipconsummation of any redemption shall be subject to the expiration or termination of the applicable waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, 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 amended; and (b) representing thateach Tendering Partner shall continue to own all Common Units subject to any redemption, after giving effect and be treated as a Limited Partner with respect to such Common Units for all purposes of this Agreement, until such Common Units are transferred to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption General Partner and paid for on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount D. In the event that the Partnership issues additional Partnership Interests to be paid to a Tendering Party any Additional Limited Partner pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement4.2, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by make such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant revisions to this Section 8.58.5 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
Appears in 1 contract
Samples: Limited Partnership Agreement (Cole Real Estate Income Strategy (Daily Nav), Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner and Initial Limited Partner, after holding any Partnership Units for a period of at least one year (or such shorter period as consented to by the General Partner in its sole discretion)twelve full months, shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereofor, if determined by the Initial Limited Partner in its sole discretion, REIT Shares issuable on, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Initial Limited Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Initial Limited Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or partially for REIT Shares and partially for a combination thereofCash Amount. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special No Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Initial Limited Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Initial Limited Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Initial Limited 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 transfer by the Tendering Party of such Tendered Units to the General Initial Limited Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Initial Limited Partner elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Initial Limited Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Initial Limited Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterArticles of Incorporation) and other restrictions provided in the Article of Incorporation, the bylaws of the General Initial Limited Partner, the Securities Act and relevant state securities or “blue sky” laws. No Neither any Tendering Party whose Tendered Units are acquired by the General Partner or Initial Limited Partner shall have any right to cause or require the Initial Limited Partner or the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterArticles of Incorporation.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Initial Limited Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h)) of the Code, of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Initial Limited Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Initial Limited Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Initial Limited Partner from being “closely held” within the meaning of Section section 856(h) of the Code, and (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoingavoid, as applicable.
: (fa) A fee may be charged any person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (other than to b) the Adviser, Special Initial Limited Partner from being “closely held” within the meaning of section 856(h) of the Code, or their Affiliates(c) with respect having the Partnership be treated as a “publicly traded partnership” under section 7704 of the Code. In addition to a Redemption in connection with an exercise of Redemption Rights any other appropriate restrictions placed by the General Partner pursuant to this Section 8.58.5(e), no Tendering Party shall be entitled to consummate a Redemption if the ownership of or delivery of REIT Shares to such Tendering Party on the Specified Redemption Date by the General Partner would (i) cause the occurrence of any of the circumstances described in clauses (a) through (c) of the first sentence of this Section 8.5(e), (ii) cause the Initial Limited Partner to own, actually or constructively, 10% or more of the ownership interests in a tenant (other than a “taxable REIT subsidiary” (as defined in Section 856(l) of the Code)) of the Initial Limited Partner’s, the Partnership’s or a Subsidiary’s real property, within the meaning of Section 856(d)(2)(B) of the Code, or (iii) otherwise cause the Initial Limited Partner to fail to qualify as a REIT under the Code, including, but not limited to, as a result of any “eligible independent contractor” (as defined in Section 856(d)(9)(A) of the Code) that operates a “qualified lodging facility” (as defined in Section 856(d)(9)(D) of the Code) or a “qualified health care property” (as defined in Section 856(e)(6)(D)(i) of the Code) on behalf of a “taxable REIT subsidiary” (as defined in Section 856(l) of the Code) failing to qualify as such. The Initial Limited Partner, in its sole and absolute discretion, shall waive the restriction on redemption set forth in this Section 8.5(e), provided that the Tendering Party has submitted such information, certification or affidavit as the Initial Limited Partner may reasonably require in connection with the application of the restrictions described in this Section 8.5(e). To the extent any attempted Redemption or exchange for REIT Shares would be in violation of this Section 8.5(e), it shall be null and void ab initio and such Tendering Party shall not acquire any rights or economic interest in any Cash Amount otherwise payable upon such Redemption or the REIT Shares otherwise issuable upon such exchange.
Appears in 1 contract
Samples: Limited Partnership Agreement (Jones Lang LaSalle Income Property Trust, Inc.)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B, 8.6.C and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them15.15 hereof, each Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Company) shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Units (Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the Company elects to purchase the Common Units subject to the Notice of Redemption pursuant to Section 8.6.B. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Units or, if such Limited Partner holds less than one thousand (1,000) Common Units, all of the “Tendering Party”)Common Units held by such Partner. A Tendering Party The Redeeming Partner shall have no right, with respect to any Common Units so redeemed, to receive any distributions paid on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
B. Notwithstanding the provisions of Section 8.6.A, a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Tendered Common Units described in the Notice of Redemption to the General Partner Company, and the General Partner Company may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Common Units by paying to the Tendering Party Redeeming Partner either the Cash Amount or the REIT Shares Amount, as elected by the Company (in its sole and absolute discretion), on the Specified Redemption Date, whereupon the Company shall acquire the Common Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Units. Within 15 days of receipt of If the Company shall elect to exercise its right to purchase Common Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Partnership will send to Redeeming Partner within five Business Days after the Limited Partner submitting the receipt by it of such Notice of Redemption a response stating whether Redemption. Unless the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if Company (i) it provides notice to the Partnership that it wishes to withdraw the request in its sole and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviserabsolute discretion) shall have the exercise its right to require purchase Common Units from the Partnership to redeem all or a portion of their Class E Units or Class I Units Redeeming Partner pursuant to this Section 8.5 at 8.6.B, the Company shall not have any time irrespective of obligation to the period such Partnership Units have been held by the Special Limited Redeeming Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units with respect to the Redeeming Partner's exercise of the Special Limited Partner or Redemption Right. In the Adviser for Class E REIT Shares or Class I REIT Shares or event the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Company shall exercise its right to purchase Common Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent respect to the aggregate Net Asset Value exercise of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the a Redemption Right for less than 1,000 Partnership Units orin the manner described in the first sentence of this Section 8.6.B, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, obligation to pay any amount to the Redeeming Partner with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Redeeming Partner, acting as a distinct legal entity, shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s 's exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction shall be treatedbetween the Company and the Redeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner's Common Units to the General Company. Each Redeeming Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects agrees to issue REIT Shares (rather than the Cash Amount) is referred to execute such documents as the “Applicable Percentage.” In making such election to acquire Tendered Units, Company may reasonably require in connection with the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number issuance of REIT Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Redemption Right.
C. Notwithstanding the provisions of Section 8.5(a) 8.6.A and this Section 8.5(b)8.6.B, the Tendering Parties a Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right pursuant to this Section 8.5, 8.6.A if the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), delivery of REIT Shares by (i) to such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption Partner on the Specified Redemption Date;
Date by the Company pursuant to Section 8.6.B (iiiregardless of whether or not the Company would in fact exercise its rights under Section 8.6.B) An undertaking to certify, at and as a condition to would be prohibited under the closing Articles of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requireCompany.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Agreement of Limited Partnership (Summit Properties Partnership L P)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units (other than Class B Units) for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)discretion. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and Partner, the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) any subsequent transferee thereof shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Partnership Units pursuant to this Section 8.5 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner Partner, the Adviser or the Adviserany subsequent transferee thereof. The Partnership shall redeem any such Class E Units or Class I Partnership Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I the corresponding class of REIT Shares or the Cash Amount (Amount, at the Adviser’s or Special Limited Partner’s election) election (other than Class B Units, which shall be repurchased for cash), unless the Board of Directors of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Partnership Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares of the corresponding class with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (other than Class B Units, which shall be subject to the satisfaction of the restrictions set forth in Section 8.5(c8.5(g) and Section 8.5(e)below). No A Limited Partner, Partner other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, Adviser may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner (or, if applicable, the Adviser or Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of IncorporationCharter, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii2) 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;
(iii3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv4) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner Partner’s common stock from being owned by less than 100 persons and persons, the General Partner from being “closely held” within the meaning of Section section 856(h) of the Code, (c) and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the foregoing, Partnership be treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
(g) Except as otherwise agreed between a Class B Limited Partner and the General Partner, Class B Limited Partners may request redemption for cash of all or a portion of their Class B Units for any month by sending a Notice of Redemption to the Partnership within the same required period of notice that holders of REIT Shares may request the monthly repurchase of REIT Shares pursuant to the General Partner’s share repurchase plan, as in effect from time to time. Any Class B Units redeemed by the Partnership will be redeemed at the most recent Net Asset Value per Class B Unit (or 95% of the most recent Net Asset Value per Class B Unit for Class B Units redeemed within one year of issuance (other than Units issued pursuant to a distribution reinvestment or Class B Units held by the Special Limited Partner or the Adviser)) as of the date of redemption, effective on the same day that REIT Shares are repurchased for that month under the General Partner’s share repurchase plan. The total amount of redemptions of (i) Class B Units and (ii) Partnership Units with corresponding REIT Shares, will be subject to the same repurchase limitations as set forth in the General Partner’s share repurchase plan, except that such limitations will apply to such Partnership Units (including the Class B Units) instead of REIT Shares. The General Partner will be entitled to redeem up to the full amount of Partnership Units necessary to correspond to repurchases of REIT Shares under the General Partner’s share repurchase plan (subject to the repurchase limits of such share repurchase plan). If the General Partner repurchases less than the full amount of REIT Shares requested to be repurchased under the General Partner’s share repurchase plan in any month, then the percentage of outstanding Class B Units redeemed in such month shall not exceed the percentage of the aggregate NAV per REIT Share repurchased pursuant to the General Partner’s share repurchase plan for such month. In the event some but not all of the Class B Units submitted for redemption during any month are to be redeemed, the redemptions will be effected on a pro rata basis. Notwithstanding the foregoing, the Adviser will have the right to require the Partnership to redeem the full amount of its Class B Units without being subject to redemption limitations described herein.
Appears in 1 contract
Samples: Limited Partnership Agreement (Blackstone Real Estate Income Trust, Inc.)
Redemption Right. (a) Subject to the provisions of this Section 8.5 8.05 and the provisions terms of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themPartners, each Limited Partner (other than the Special Limited Partner, the Company, the General Partner, after holding or any Partnership Units for at least one year (wholly-owned Subsidiaries of the Company or such shorter period as consented to by the General Partner in its sole discretion), Partner) shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (a “Redemption”) on the Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Tendering Party”"Redeeming Partner"). A Tendering Party ; provided, -------- however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption ------- Right if the General Partner elects to sell purchase the Tendered Partnership Units described in subject to the Notice of Redemption pursuant to the General Partner Section 8.05(b); and the General Partner mayprovided, in its sole and absolute discretionfurther, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the -------- ------- that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date Partnership Record Date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.05(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to whereupon the General Partner in exchange shall acquire the Partnership Units offered for a number of REIT Shares equal to redemption by the product of the REIT Shares Amount redeeming Partner and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered treated for all purposes of this Agreement as the owner of such Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within ten Business Days after the receipt by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article such Notice of Incorporation, the bylaws of Redemption. Unless the General PartnerPartner (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.05(b), the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right no obligation to cause the Redeeming Partner or require the General Partner Partnership with respect to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an Redeeming Partner's exercise of the Redemption Right. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right pursuant to in the manner described in the first sentence of this Section 8.58.05(b), the Tendering Party Partnership shall submit have no obligation to pay any amount to the following Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner, as the case may be, shall treat the transaction between the General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Partnership Units to the General Partner, in addition . Each Redeeming Partner agrees to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) execute such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right. If the Redeeming Partner receives REIT Shares, the Redeeming Partner shall have the right to receive any dividend or other distribution paid with respect to REIT Shares if the record date for such dividend or distribution is on or after the Specified Redemption Date.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.05(b) (regardless of whether or not the General Partner would in fact exercise its rights under Section 8.05(b)) would (i) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the Ownership Limitation (as defined in the Amended and Restated Articles of Incorporation) and calculated in accordance therewith, except as provided in the Amended and Restated Articles of Incorporation, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), (iii) result in the Company being "closely held" within the meaning of Section 856(h) of the Code, (iv) otherwise jeopardize the Company's status as a REIT, or (v) cause the acquisition of REIT Shares by such Partner to be "integrated" with any other distribution of REIT Shares for purposes of complying with the registration provisions of the Securities Act. The General Partner, in its sole discretion, may waive the restriction on redemption set forth in this Section 8.05(c); provided, however, that in the event such restriction is waived, the Redeeming -------- ------- Partner shall be paid the Cash Amount.
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Partner pursuant to this Section 8.5 8.05 shall be paid on the Specified Redemption Date; provided, however, -------- ------- that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner Company to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law that apply upon a Redeeming Partner's exercise of the Redemption Right. If a Redeeming Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C. If the Partnership --------- or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Partner's exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units, and the Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “"publicly traded partnership” " that is taxed as a corporation under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a "Restriction Notice") to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea "publicly traded partnership" that is taxed as a corporation under Section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Redemption Right. (a) A. Subject to this Section 8.5 Sections 4.2.C.3 and 8.6.C, on or after the provisions date one (1) year after the closing of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held initial public offering of REIT Shares by themthe General Partner, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Class A Units held by such Partnership Units (Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right redemption right (the “Tendering PartyRedeeming Partner”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership one thousand (1,000) Class A Units or, if such Limited Partner holds less than 1,000 Partnership one thousand (1,000) Class A Units, all of the Partnership Class A Units held by such Limited Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Limited Partner's Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
(b) If B. Notwithstanding the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this provisions of Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units8.6.A, the General Partner shall act may, in its sole and absolute discretion, elect to assume directly and satisfy a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant Redemption Right by either paying to the terms of this Section 8.5Redeeming Partner the Cash Amount or issuing to the Redeeming Partner the REIT Shares Amount, as elected by the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, (in its sole and absolute discretion) on the Specified Redemption Date, whereupon the Tendering Party General Partner shall sell acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Class A Units. Unless the General Partner (in its sole and absolute discretion) shall exercise its right to assume directly and satisfy the Redemption Right, the General Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of the Tendered Redemption Right. In the event the General Partner shall exercise its right to satisfy the Redemption Right in the manner described in the first sentence of this Section 8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of the Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner, and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Class A Units to the General Partner. Each Redeeming Partner in exchange for a number of REIT Shares equal agrees to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify execute such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(d) Any Cash Amount C. Notwithstanding the provisions of Section 8.6.A and Section 8.6.B, a Partner shall not be entitled to be paid to a Tendering Party exercise the Redemption Right pursuant to this Section 8.5 shall be paid 8.6.A if the delivery of REIT Shares to such Partner on the Specified Redemption Date; provided, however, that Date by the General Partner may elect pursuant to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership Section 8.6.B (regardless of whether or not the General Partner or would in fact exercise its rights under Section 8.6.B) would be prohibited under the Declaration of Trust. Without limitation on the preceding sentence, the following restrictions shall apply to obtain financing the exercise of a Redemption Right by a Partner: (i) neither a Person who is an “Excluded Holder” as defined in the Declaration of Trust, nor any Person related to an “Excluded Holder” by either blood or marriage, nor any Person whose ownership of REIT Shares would be used attributed to make such payment an “Excluded Holder” under Section 318 of the Cash AmountCode, nor any Person who would be considered by causing additional reason of the application of Section 318 of the Code to own REIT Shares to actually or constructively owned by an “Excluded Holder” shall be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners permitted to exercise their the Redemption Rights Right if (A) after giving effect to preventsuch exercise, among other things, (a) The Colonial Company or any Person from owning shares in excess direct or indirect Subsidiary of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership The Colonial Company would be regarded as a “related party tenant” of the General Partner from being owned for purposes of Section 856(d)(2)(B) of the Code and (B) the total rental income considered derived by less than 100 persons and the General Partner from being all “closely heldrelated party tenants” within could reasonably be expected to exceed one percent (1%) of the meaning gross income of the General Partner (as determined for the purposes of Section 856(h856(c)(2) of the Code); and (ii) neither an “Excluded Holder”, nor any Person related to an “Excluded Holder” by either blood or marriage, nor any Person whose ownership of REIT Shares would be attributed to an “Excluded Holder” under Section 544(a) of the Code, nor any Person who would be considered by reason of the application of Section 544(a) of the Code to own REIT Shares actually or constructively owned by an “Excluded Holder” shall be permitted to exercise the Redemption Right if, after giving effect to such exercise (cA) any single Person described above would be considered to own more than 29 percent of the outstanding REIT Shares (as determined for purposes of Sections 542(a)(2) and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 856(a)(6) of the Code, ); (dB) the Partnership’s assets being any two Persons described above would be considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation to own more than 34 percent of the Securities Act or other comparable state law, outstanding REIT Shares (fas determined for purposes of Sections 542(a)(2) the registration and 856(a)(6) of the Partnership as an investment company under the Investment Company Act, Code); (gC) the registration any three Persons described above would be considered to own more than 39 percent of the Partnershipoutstanding REIT Shares (as determined for purposes of Sections 542(a)(2) and 856(a)(6) of the Code); or (D) any four Persons described above would be considered to own more than 44 percent of the outstanding REIT Shares (as determined for purposes of Sections 542(a)(2) and 856(a)(6) of the Code).
D. Notwithstanding anything contained in Sections 8.6.A, 8.6.B, or 8.6.C, no Partner shall be entitled to exercise the Redemption Right pursuant to Section 8.6.A with respect to any Preferred Unit unless (i) such Preferred Unit has been issued to and is held by a Partner other than the General Partner, and (ii) the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under has expressly granted to such Partner the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by right to redeem such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof Preferred Units pursuant to each of the Limited Partners holding Partnership Units, which notice Section 8.6.A.
E. Preferred Units shall be accompanied by a copy of an opinion of counsel to the Partnership which states thatredeemed, if at all, only in the opinion of accordance with such counsel, restrictions redemption rights or options as are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) set forth with respect to a Redemption such Preferred Units (or class or series thereof) in connection with an exercise of Redemption Rights pursuant to this Section 8.5the instruments designating such Preferred Units (or class or series thereof).
Appears in 1 contract
Samples: Limited Partnership Agreement (Colonial Realty Limited Partnership)
Redemption Right. (a) Subject to the provisions of this Section 8.5 9.04 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)Company, shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Redemption Amount to be paid by the Partnership, provided that such Partnership Units (shall have been outstanding for at least two years, and subject to any restriction agreed to in writing between the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by Redeeming Limited Partner and the General Partner in its sole discretion (a “Redemption Right”)Partner. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party shall be deemed to have offered to sell ; provided, however, that the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner mayPartnership shall, in its sole and absolute discretion, elect have the option to purchase directly and acquire such Tendered Units by paying to the Tendering Party deliver either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Amount upon such redemption; provided, further, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Partnership Units subject to the Notice of Redemption; and provided, the Partnership will send to the further, that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 9.04(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Limited Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party General Partner shall sell acquire the Partnership Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 9.04(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Limited Partner within ten Business Days after the receipt by the General Partner of such Notice of Redemption. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner’s exercise of such Redemption Right, and each of the Tendered Redeeming Limited Partner, the Partnership and the General Partner shall treat the transaction between the General Partner and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner’s Partnership Units to the General Partner. Each Redeeming Limited Partner in exchange for a number of REIT Shares equal agrees to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify execute such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 9.04(a) and 9.04(b), a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 9.04(b) (regardless of whether or not the General Partner would in fact exercise its rights under Section 9.04(b)) would (i) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the Ownership Limitation (as defined in the Articles of Amendment and Restatement) and calculated in accordance therewith, except as provided in the Articles of Amendment and Restatement, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), (iii) result in the Company being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause the Company to own, directly or constructively, 10% or more of the ownership interests in a tenant of the Company’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares by such Partner to be “integrated” with any other distribution of REIT Shares for purposes of complying with the registration provisions of the Securities Act of 1933, as amended (the “Securities Act”). The General Partner, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 9.04(c).
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 9.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 90 days to the extent required for the Partnership or the General Partner Company to obtain financing to be used to make such for payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Redemption Right. (a) Subject to Beginning on the date of this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themAgreement, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Holder shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the number of Partnership Units (held by such Holder and set forth on Exhibit A under the “Tendered heading "Immediate Redemption Units”) " at a redemption price equal to and in exchange the form of the Redemption Amount. Notwithstanding any provisions of the Partnership Agreement to the contrary, the Partnership agrees that any Immediate Redemption Units tendered for redemption within 10 days following the date of this Agreement shall be redeemed for the REIT Shares issuable onAmount. On or after the date that is six months from the date of this Agreement, or each Holder shall have the Cash Amount payable on, or any combination thereof, Redemption Right to require the Partnership to redeem on a Specified Redemption DateDate all or a portion of the total number of Partnership Units held by such Holder and set forth on Exhibit A, as determined by including any Immediate Redemption Units not previously tendered for redemption, at a redemption price equal to and in the General Partner in its sole discretion (a “form of the Redemption Right”)Amount. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form of Exhibit B delivered to the Partnership (with a copy to the General Partner) Company by the Limited Partner Holder who is exercising the Redemption Right (the “Tendering Party”)Right. A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, Holder may not exercise the Redemption Right for less than 1,000 one hundred (100) Partnership Units or, if such Limited Partner Holder holds less than 1,000 one hundred (100) Partnership Units, all of the Partnership Units held by such PartnerHolder. The Tendering Party A Holder shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects . Subject to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) Sections 4.2 and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision 4.3 of this Agreement, the General Partner Redemption Right shall place appropriate restrictions on the ability of the Limited Partners otherwise be subject to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning applicable provisions of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration 8.05 of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicableAgreement.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Redemption and Registration Rights Agreement (Winston Hotels Inc)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.05(b), 8.05(c), 8.05(d), 8.05(e) and 8.05(f) and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)Company, shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Partnership Units held by such Limited Partner at a redemption price equal to and in the form of the Redemption Amount to be paid by the Partnership, provided that such Partnership Units (shall have been outstanding for at least one year, and subject to any restriction agreed to in writing between the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by Redeeming Limited Partner and the General Partner in its sole discretion (a “Redemption Right”)Partner. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Tendering Party”"Redeeming Limited Partner"). A Tendering Party shall be deemed to have offered to sell ; provided, however, that the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner mayPartnership shall, in its sole and absolute discretion, elect have the option to purchase directly and acquire such Tendered Units by paying to the Tendering Party deliver either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a ; provided, further, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Partnership Units subject to the Notice of Redemption; and provided, the Partnership will send to the further, that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.05(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume the obligation from have offered to sell the Partnership Units described in the Notice of Redemption to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner may, in exchange for its sole and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Redeeming Limited Partner either the Cash Amount or the REIT Shares. The percentage of the Tendered Units tendered for Redemption Shares Amount, as elected by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party General Partner shall sell acquire the Partnership Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Limited Partner within five Business Days after the receipt by the General Partner of such Notice of Redemption. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner's exercise of such Redemption Right, and each of the Tendered Redeeming Limited Partner, the Partnership and the General Partner shall treat the transaction between the General Partner and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner's Partnership Units to the General Partner. Each Redeeming Limited Partner in exchange for a number of REIT Shares equal agrees to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify execute such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a Limited Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.05(b) (regardless of whether or not the General Partner would in fact exercise its rights under Section 8.05(b)) would (i) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the Ownership Limitation (as defined in the Declaration of Trust) and calculated in accordance therewith, except as provided in the Declaration of Trust, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), (iii) result in the General Partner being "closely held" within the meaning of Section 856(h) of the Code, (iv) cause the General Partner to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner's, the Partnership's or a Subsidiary Partnership's real property, within the meaning of Section 856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares by such Partner to be "integrated" with any other distribution of REIT Shares for purposes of complying with the registration provisions of the Securities Act of 1933, as amended (the "Securities Act"). The General Partner, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 8.05(c).
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 8.05 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 90 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law that apply upon a Redeeming Limited Partner's exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C. If the Partnership or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner's exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Partner in redemption of its Partnership Units, and the Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “"publicly traded partnership” " taxable as a corporation under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a "Restriction Notice") to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which that states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea "publicly traded partnership" under section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Windrose Medical Properties Trust)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.6.B and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them8.6.C, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the "Redeeming Partner"); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the General Partner elects to purchase the Partnership Units subject to the Notice of Redemption pursuant to Section 8.6.B. A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Partnership Units or, if such Limited Partner holds less than one thousand (1,000) Partnership Units, all of the “Tendering Party”)Partnership Units held by such Partner. A Tendering Party The Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any Partnership distributions paid on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
B. Notwithstanding the provisions of Section 8.6.A, a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Tendered Partnership Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Partnership Units by paying to the Tendering Party Redeeming Partner either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether as elected by the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request in its sole and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(eabsolute discretion)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, whereupon the Tendering Party General Partner shall sell acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. If the General Partner shall elect to exercise its right to purchase Partnership Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within five (5) Business Days after the receipt by the General Partner of such Notice of Redemption. Unless the General Partner (in its sole and absolute discretion) shall exercise its right to purchase Partnership Units from the Redeeming Partner pursuant to its right to purchase Partnership Units under this Section 8.6.B, the General Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to the Redeeming Partner's exercise of the Tendered Redemption Right. In the event the General Partner shall exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner's exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner and the Redeeming Partner for federal income tax purposes as a sale of the Redeeming Partner's Partnership Units to the General Partner. Each Redeeming Partner in exchange for a number of REIT Shares equal agrees to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify execute such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(d) Any Cash Amount C. Notwithstanding the provisions of Section 8.6.A and Section 8.6.B, a Partner shall not be entitled to be paid to a Tendering Party exercise the Redemption Right pursuant to this Section 8.5 shall be paid 8.6.A if the delivery of REIT Shares to such Partner on the Specified Redemption Date; provided, however, that Date by the General Partner may elect pursuant to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership Section 8.6.B (regardless of whether or not the General Partner to obtain financing to would in fact exercise its rights under Section 8.6.B) would be used to make such payment prohibited under the Articles of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possibleIncorporation.
D. Preferred Partnership Units shall be redeemed, if at all, only in accordance with such redemption rights or options as are set forth with respect to such Preferred Partnership Units (eor class or series thereof) Notwithstanding any other provision of this Agreementin the instruments designating such Preferred Partnership Units (or class or series thereof).
E. In the event that the Partnership issues additional Partnership Interests pursuant to Section 4.2.A, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by make such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant revisions to this Section 8.58.6 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
Appears in 1 contract
Samples: Limited Partnership Agreement (Boddie Noell Properties Inc)
Redemption Right. (a) A. Subject to the other provisions of this Section 8.5 8.6 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themPartners, at any time, each Limited Partner (other than the General Partner, after holding Parent or their respective Subsidiaries or Affiliates or any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Parent Transferee) shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common or Class A Preferred Units held by such Partnership Units (Limited Partner at a redemption price per Common or Class A Preferred Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerParent) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Partner”). ; provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if Parent elects to purchase the Common or Class A Tendering Party shall be deemed Preferred Units subject to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year8.6.B hereof. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership one thousand (1,000) Common or Class A Preferred Units or, if such Limited Partner holds less than 1,000 Partnership one thousand (1,000) Common or Class A Preferred Units, all of the Partnership Common or Class A Preferred Units held by such Limited Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Common or Class A Preferred Units so redeemedredeemed (including pursuant to Section 8.6.B hereof), to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption DateDate (unless the Partnership or, if applicable, Parent shall have failed to redeem or purchase such Common or Class A Preferred Units as of such time). Each Redeeming Partner agrees to execute such documents as the Partnership may reasonably require in connection with the exercise of the Redemption Right.
B. Notwithstanding the provisions of Section 8.6.A hereof, upon an election by a Limited Partner to exercise the Redemption Right, Parent may, in its sole and absolute discretion (b) If subject to the General Partner elects limitations on ownership and transfer of REIT Shares set forth in Parent’s Articles of Amendment and Restatement), elect to assume directly and satisfy a Redemption Right by paying to the obligation Redeeming Partner either the Cash Amount or the REIT Shares Amount, as Parent determines in its sole and absolute discretion whereupon Parent shall acquire the Common and Class A Preferred Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common and Class A Preferred Units. If Parent shall elect to exercise its right to purchase Common and Class A Preferred Units under this Section 8.6.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner within ten (10) Business Days after the receipt by it of such Notice of Redemption. Unless Parent shall exercise its right to purchase Common and Class A Preferred Units from the Redeeming Partner pursuant to this Section 8.6.B, Parent shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner’s exercise of the Redemption Right. In the event Parent shall exercise its right to purchase Common and Class A Preferred Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.6.B, then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Partner’s exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership, and Parent shall treat the transaction shall be treatedbetween Parent and the Redeeming Partner, for federal income tax purposes, as a Transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage sale of the Tendered Units tendered for Redeeming Partner’s Common and Class A Preferred Units. Each Redeeming Partner agrees to execute such documents as Parent may reasonably require in connection with the exercise of the Redemption by Right.
C. During the Tendering Party for which the General Partner elects to issue REIT Shares thirty (rather than the Cash Amount30) is referred to as day period (the “Applicable Percentage.” In making such election to acquire Tendered Units, Conversion Window”) following the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class seventh anniversary of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms Effective Date of this Section 8.5Agreement, the General (i) each Limited Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, (other than the Aggregate Share Ownership Limit General Partner, Parent or their respective Subsidiaries or Affiliates or any Parent Transferee) shall have the right (the “Class A Put Right”) upon written notice received by the Partnership to require the Partnership to redeem, on or before the fifth (5th) Business Day after the last day of the Conversion Window, all or a portion of the Class A Preferred Units held by such Limited Partner (other than Units listed on Exhibit E) for cash at a redemption price per Class A Preferred Unit of $53.0315 (as calculated adjusted in accordance with the Charter) and other restrictions provided principles of Section 8.9.G hereof in the Article case of Incorporationcertain dividends, subdivisions, or combinations with respect to the bylaws Class A Preferred Units), provided that the Partnership may elect to satisfy its obligations under the Class A Put Right by converting each applicable Class A Preferred Unit into such number of Common Units that, as of the General Partnerlast day of the Conversion Window (or the first Business Day thereafter if such last day is not a Business Day), would be redeemable for cash equal to $53.0315 (adjusted as described above) if a Notice of Redemption were delivered on such date or that Parent may elect to assume the Securities Act Partnership’s obligation under this Class A Put Right and relevant state securities may elect to satisfy such obligations either in cash or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under a Value (determined using the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise last day of the Redemption Right pursuant to this Section 8.5, Conversion Window (or the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(ifirst Business Day thereafter if such last day is not a Business Day) A written affidavit, dated the same date as the Notice Valuation Date) equal to $53.0315 (adjusted as described above); provided further that the Class A Put Right shall be limited to an aggregate maximum 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 $75,000,000 and (ii) any Related Party and the Partnership shall have the right (bthe “Class A Forced Conversion”) representing to require all the Class A Preferred Unitholders to convert on thirty (30) days notice, all but not less than all, of the Class A Preferred Units held by each such Limited Partner (other than Units listed on Exhibit E) for that number of Common Units that, after giving effect as of the last Business Day before such notice is issued, would be redeemable under Section 8.6.A hereof for cash equal to $82.3548 (as adjusted in accordance with the principles of Section 8.9.G hereof in the case of certain dividends, subdivisions, or combinations with respect to the Redemption, neither Class A Preferred Units) per Class A Preferred Unit to be converted by such Limited Partner. It is understood and agreed that the Tendering Party nor any Related Party will own REIT Shares in excess exercise and implementation of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (orClass A Forced Conversion will be structured, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing extent possible, to avoid triggering the recognition of taxable gain. If the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition aggregate redemption price of Class A Preferred Units tendered for redemption pursuant to the closing Class A Put Right and the comparable right provided to Series N partnership unitholders of Parent LP during the Redemption on Conversion Window (the Specified Redemption Date“Total Put Exercise”) would exceed $75,000,000, the number of Class A Preferred Units and Series N units of Parent LP that either shall be redeemed pursuant to the Class A Put Right and the comparable right provided to Series N partnership unitholders of Parent LP shall be reduced pro rata among the Limited Partners and the Series N partnership unitholders of Parent LP who elect to participate such that the Total Put Exercise equals $75,000,000. The notice to be provided by the Partnership in order to exercise the Class A Forced Conversion shall be in writing in the form attached hereto as Exhibit G and shall specify (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation effective date of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder LimitClass A Forced Conversion, (b) the beneficial ownership number of Common Units into which each Class A Preferred Unit will be converted into pursuant to the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the CodeClass A Forced Conversion, (c) as the number of Common Units into which each Class A Preferred Units would convert pursuant to the conversion right in Section 8.9 hereof, and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) a statement that the Partnership’s assets being considered “plan assets” with holders of Class A Preferred Units may, in lieu of having such Units converted pursuant to the meaning of ERISA or any regulations proposed or promulgated thereunderClass A Forced Conversion, (e) exercise their rights to convert such Units pursuant to Section 8.9 by written notice to the violation of General Partner at the Securities Act or other comparable state law, (f) the registration principal offices of the Partnership as an investment company under prior to the Investment Company Act, (g) the registration effective date of the PartnershipClass A Forced Conversion.
D. Notwithstanding anything in this Agreement to the contrary, no Limited Partner may exercise any Redemption Right that could result in the General Partner or any Affiliate thereof receipt of REIT Shares prior to April 25, 2006 (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under “Lock-up Period”); provided that, after the Advisers Act, (h) the violation death of any law, rule, regulation by such Limited Partner, the Partnership, fiduciary or other authorized representative of such Limited Partner’s estate shall be entitled to deliver a Notice of Redemption to the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a nonduring the Lock-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof up Period with respect to each Redemption Rights of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged Units (other than Units listed in Exhibit E, which are subject to the Adviser, Special restrictions of Section 8.6.I hereof) held by such deceased Limited Partner or their Affiliates) with respect and to effect a Redemption in connection with an exercise redemption of Redemption Rights pursuant to this Section 8.5such Units.
Appears in 1 contract
Redemption Right. (a) A. Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them8.6.C, each Limited Partner or Assignee, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such the Partnership Units (held by such Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Redemption Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right redemption right (the “Tendering PartyRedeeming Partner”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 one thousand (1,000) Partnership Units or, if such Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution distributions or Guaranteed Payments paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If B. Notwithstanding the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this provisions of Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units8.6.A, the General Partner shall act may, in its sole and absolute discretion, assume directly and satisfy a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant Redemption Right by paying to the terms of this Section 8.5, Redeeming Partner the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, Redemption Amount on the Specified Redemption Date, whereupon the Tendering Party General Partner shall sell acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such number Partnership Units. In the event the General Partner shall exercise its right to satisfy the Redemption Right in the manner described in the preceding sentence, the Partnership shall have no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner’s exercise of the Tendered Redemption Right, and each of the Redeeming Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner and the Redeeming Partner as a sale of the Redeeming Partner’s Partnership Units to the General Partner in exchange for a number of REIT Shares equal federal income tax purposes. Each Redeeming Partner agrees to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify execute such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(d) Any Cash Amount C. Notwithstanding the provisions of Sections 8.6.A and 8.6.B, a Partner shall not be entitled to be paid to a Tendering Party exercise the Redemption Right pursuant to this Section 8.5 shall be paid 8.6.A if the delivery of REIT Shares to such Partner on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to would be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company prohibited under the Investment Company Act, (g) the registration Articles of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicableIncorporation.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Carramerica Realty Corp)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange (a “Redemption Right”) for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)discretion. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the each Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the such Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the a Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors Trustees of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e))Class I Units. No Limited Partnerlimited partner, other than the a Special Limited Partner and or the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, Partner other than the a Special Limited Partner and or the Adviser, Adviser may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner (or, if applicable, the Adviser or a Special Limited Partner) elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner (or, if applicable, the Adviser or a Special Limited Partner) elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant If the Partnership elects to the terms of this Section 8.5, the General Partner will acquire redeem any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterDeclaration of Trust) and other restrictions provided in the Article Declaration of IncorporationTrust, the bylaws of the General Partner, and the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchangeAct. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterDeclaration of Trust.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, unless waived by the General Partner, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii2) 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;
(iii3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv4) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner Partner’s common stock from being owned by less than 100 persons and persons, the General Partner from being “closely held” within the meaning of Section section 856(h) of the Code, (c) and as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the foregoing, Partnership be treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A redemption fee may be charged (other than to the Adviser, a Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Oak Street Net Lease Trust)
Redemption Right. (a) Subject to this Section 8.5 8.04(c) and Section 8.04(d) and the provisions of any agreements agreement between the Partnership and one or more Limited Partners with respect to Partnership Partners, beginning on the date that is twelve months after the date of issuance of any Common Units held by them(including any Common Units that are issued upon the conversion of LTIP Units), each Limited Partner (other than the General Partner, after holding Company or any Partnership Units for at least one year (or such shorter period as consented to by Subsidiary of the General Partner in its sole discretion), Company) shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of such Partnership Limited Partner’s Common Units (at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)Amount. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption in the form attached hereto as Exhibit B delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party , and such notice shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to irrevocable unless otherwise agreed upon by the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices one Notice of Redemption during each calendar yearquarter unless otherwise agreed upon by the General Partner. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership one thousand (1,000) Common Units or, if such Limited Partner holds less than 1,000 Partnership one thousand (1,000) Common Units, all of the Partnership Common Units held by such Limited Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership Common Units so redeemed, to receive any distribution paid with respect to Partnership Common Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the provisions of Section 8.04(a) hereof, if a Limited Partner exercises the Redemption Right by delivering to the Partnership a Notice of Redemption, then the General Partner elects may, in its sole and absolute discretion, elect to assume cause the obligation from Company to purchase directly and acquire some or all of, and in such event the Partnership to redeem Tendered Units and Company agrees to purchase and acquire, such Common Units by paying to the Redeeming Limited Partner the REIT Shares Amount, whereupon the Company shall acquire the Tendered Common Units tendered for REIT Shares rather than cashredemption by the Redeeming Limited Partner and the Company shall be treated for all purposes of this Agreement as the owner of such Common Units. In the event the Company shall exercise its right to satisfy the Redemption Right in the manner described in the preceding sentence, then the Partnership shall direct have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner’s exercise of the Redemption Right, and each of the Redeeming Limited Partner, the Partnership, the General Partner and the Company shall treat the transaction between the Company and the Redeeming Limited Partner as a sale of the Redeeming Limited Partner’s Common Units to issue and deliver the Company for federal income tax purposes. Each Redeeming Limited Partner agrees to execute such documents as the Company may reasonably require in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 8.04(a) hereof, any Limited Partner that holds Common Units issued to the Tendering Party contributors of limited liability company interests in Elizon Residential Phoenix I LLC, Elizon Residential II LLC and Elizon Housing 2012-AI LLC contributed to the Partnership pursuant to the terms set forth Contribution and Sale Agreements dated as of January 18, 2013, shall have a Redemption Right with respect to such Common Units that can be exercised at any time prior to February 1, 2013 (without being subject to the twelve month holding period referenced in this Section 8.5(b8.04(a) hereof), and in which casethe event any such Limited Partner exercises such Redemption Right prior to February 1, 2013, (i) the General Partner, acting as Specified Redemption Date for such redemption shall be the next business day after such Redeeming Limited Partner provides the Company with a distinct legal entity, shall assume directly the obligation Notice of Redemption with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption Right, to such Common Units and (ii) such transaction the Company shall be treated, for federal income tax purposes, as required to issue to such Redeeming Limited Partner REIT Shares on a Transfer by one-for-one basis in satisfaction of the Tendering Party Company’s redemption obligation (and shall not have the right to pay such Redeeming Limited Partner the Cash Amount in respect of such Tendered Units redemption).
(d) Notwithstanding the provisions of Sections 8.04(a), 8.04(b) and 8.04(c) hereof, a Limited Partner shall not be entitled to exercise the General Partner in exchange for REIT Shares. The percentage Redemption Right if the delivery of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Limited Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered Date by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free Company pursuant to Section 8.04(b) or Section 8.04(c) hereof (regardless of any pledge, lien, encumbrance whether or restriction, other than not the Aggregate Share Ownership Limit (as calculated Company would in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no fact exercise its rights under this Agreement that Section 8.04(b) or Section 8.04(c)) would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavitresult in such Limited Partner or any other Person (as defined in the Articles) owning, dated the same date as the Notice of Redemptiondirectly or indirectly, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Stock Ownership Limit or the Common Share Ownership any Excepted Holder Limit (oreach as defined in Articles) and calculated in accordance therewith, if applicable except as provided in the Excepted Holder Limit);
Articles, (ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional result in REIT Shares prior being owned by fewer than 100 persons (determined without reference to the closing any rules of the Redemption on the Specified Redemption Date;
attribution), (iii) An undertaking result in the Company being “closely held” within the meaning of Section 856(h) of the Code, (iv) cause the Company to certifyown, at and actually or constructively, 10% or more of the ownership interests in a tenant (other than a TRS) of the Company’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause the Company to fail to qualify as a condition to REIT under the closing of Code, or (vi) cause the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership acquisition of REIT Shares by such Limited Partner to be “integrated” with any other distribution of REIT Shares or Common Units for purposes of complying with the Tendering Party registration provisions of the Securities Act. The General Partner, in its sole and any Related Party remain unchanged from absolute discretion, may waive the restriction on redemption set forth in this Section 8.04(d).
(e) Each Redeeming Limited Partner covenants and agrees that disclosed in the affidavit required by all Common Units tendered for redemption pursuant to this Section 8.5(c)(1) or (b) after giving effect 8.04 will be delivered to the RedemptionPartnership or the Company free and clear of all liens, claims, and encumbrances whatsoever and should any such liens, claims or encumbrances exist or arise with respect to such Common Units, neither the Tendering Party Partnership nor the Company shall be under any Related Party shall own REIT Shares obligation to acquire such Common Units pursuant to Section 8.04(a) or Section 8.04(b) hereof. Each Redeeming Limited Partner further agrees that, in violation the event any state or local property transfer tax is payable as a result of the Aggregate Share Ownership Limit (ortransfer of its Common Units to the Partnership or the Company, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General such Redeeming Limited Partner may reasonably requireshall assume and pay such transfer tax.
(df) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner Company to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional Amount and may also delay such Specified Redemption Date to the extent necessary to effect compliance with applicable requirements of the law. Any REIT Shares Share Amount to be issued or otherwisepaid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption Date; provided, that the General Partner may elect to cause the Specified Redemption Date to be delayed to the extent necessary to effect compliance with applicable requirements of the law. Notwithstanding the foregoing, the General Partner agrees to use its commercially reasonable efforts to cause the closing of the acquisition of Tendered redeemed Common Units hereunder to occur as quickly as reasonably possible.
(eg) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the General Partner and the Partnership to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Redeeming Limited Partner must furnish the General Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C and any similar forms or certificates required to avoid or reduce the withholding under federal, state, local or foreign law or such other form as the General Partner may reasonably request. If the Partnership or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Redeeming Limited Partner in redemption of its Common Units, and such Redeeming Limited Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(h) Notwithstanding any other provision of this Agreement, the General Partner may place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary or reasonable to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which that states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the foregoing, Partnership being treated as applicablea “publicly traded partnership” under Section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Ellington Housing Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a “Redemption”) all or a portion of such Partnership Units (the “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)) for the Cash Amount payable on the Specified Redemption Date. Notwithstanding the foregoing, the General Partner shall have the right but not the obligation, in its sole discretion, to elect to acquire any Tendered Units in exchange for a number of REIT Shares equal to the amount of such Tendered Units, in which case such REIT Shares shall be paid to the holder of such Tendered Units in lieu of the Cash Amount. Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, Amount or a combination thereofacquired for REIT Shares. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such the Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e))Class E Units. No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, Partner other than the Special Limited Partner and the Adviser, Adviser may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 transfer by the Tendering Party of such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amountcash) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, If the General Partner will elects to acquire any number of Tendered Units for REIT Shares rather than the Cash Amountcash, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the CharterArticles of Incorporation) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the CharterArticles of Incorporation.
(c) In connection with an exercise of the Redemption Right Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(iA) A a written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(iiB) A 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;
(iiiC) An an undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(18.5(c)(A) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(ivD) Any any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, a holder of Partnership Units (i) shall not be entitled to effect a Redemption, whether for cash or an exchange for REIT Shares, to the General extent the ownership of or right to acquire REIT Shares pursuant to such exchange by such Partner shall place appropriate restrictions on the ability of the Limited Partners could cause such Partner or any other Person to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of violate the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Limit, or any Excepted Holder Limit, (b) the beneficial ownership of could cause the General Partner from being Partner’s common stock to be owned by less than 100 persons and persons, could cause the General Partner from being to be “closely held” within the meaning of Section section 856(h) of the Code, (c) as and if deemed necessary to ensure that or could cause the Partnership does not to constitute a “publicly traded partnership” under Section section 7704 of the Code, Code and (dii) shall have no rights under this Agreement to acquire REIT Shares which would otherwise be prohibited under the Partnership’s assets being considered “plan assets” with Charter. To the meaning of ERISA extent any attempted Redemption or any regulations proposed or promulgated thereunder, (e) the exchange for REIT Shares would be in violation of the Securities Act or other comparable state lawthis Section 8.5(e), (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice it shall be accompanied by a copy null and void ab initio and such holder of an opinion of counsel to the Partnership which states that, OP Units shall not acquire any rights or economic interest in the opinion of cash otherwise payable upon such counsel, restrictions are necessary in order to avoid Redemption or the foregoing, as applicableREIT Shares otherwise issuable upon such exchange.
(f) A redemption fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Apollo Realty Income Solutions, Inc.)
Redemption Right. (a) Subject to this Section 8.5 Sections 8.04(b), 8.04(c), 8.04(d), 8.04(e) and 8.04(f) and the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership OP Units (including any LTIP Units that are converted into OP Units) held by them, each Limited Partner Partner, other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion)Company, shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the OP Units held by such Partnership Units (Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable onto be paid by the Partnership, or provided that such OP Units shall have been outstanding for at least one year (including the period of time any combination thereofLTIP Units were outstanding if such LTIP Units are converted to OP Units), and subject to any restriction agreed to in writing between the Redeeming Limited Partner and the General Partner, the Specified Redemption Date, as determined by Company or the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the Redemption Right (the “Tendering PartyRedeeming Limited Partner”). A Tendering Party shall be deemed to have offered to sell ; provided, further, that the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner mayPartnership shall, in its sole and absolute discretion, elect have the option to purchase directly and acquire such Tendered Units by paying to the Tendering Party deliver either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a ; provided, further, that the Partnership shall not be obligated to satisfy such Redemption Right if the Company elects to purchase the OP Units subject to the Notice of Redemption; and provided, the Partnership will send to the further, that no Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Subject to the immediately succeeding sentence, a Limited PartnerPartner may not, other than without the Special Limited consent of the General Partner and the AdviserCompany, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such 300 OP Units. If a Limited Partner holds less than 1,000 Partnership 300 OP Units, such Limited Partner may, without the consent of the General Partner or the Company, exercise the Redemption Right for all of the Partnership Units held by such Partner. The Tendering Party Redeeming Limited Partner shall have no right, with respect to any Partnership OP Units so redeemed, to receive any distribution paid with respect to Partnership OP Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the General provisions of Section 8.04(a), a Limited Partner elects that exercises the Redemption Right shall be deemed to assume have offered to sell the obligation from OP Units described in the Partnership Notice of Redemption to redeem Tendered the Company, and the Company may, in its sole and absolute discretion, elect to purchase directly and acquire such OP Units and agrees by paying to acquire the Tendered Units for Redeeming Limited Partner either the Cash Amount or the REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 purposesAmount, as a Transfer elected by the Tendering Party of such Tendered Units to the General Partner Company (in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable its sole and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amountabsolute discretion), on the Specified Redemption Date, whereupon the Tendering Party Company shall sell acquire the OP Units offered for redemption by the Redeeming Limited Partner and shall be treated for all purposes of this Agreement as the owner of such number OP Units. If the Company shall elect to exercise its right to purchase OP Units under this Section 8.04(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Limited Partner within five Business Days after the receipt by the Company of such Notice of Redemption. In the event the Company shall exercise its right to purchase OP Units with respect to the exercise of a Redemption Right, the Partnership shall have no obligation to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner’s exercise of such Redemption Right, and each of the Tendered Redeeming Limited Partner, the Partnership and the Company shall treat the transaction between the Company and the Redeeming Limited Partner for federal income tax purposes as a sale of the Redeeming Limited Partner’s OP Units to the General Company. Each Redeeming Limited Partner agrees to execute such documents as the Company may reasonably require in exchange for a number connection with the issuance of REIT Shares equal to the product upon exercise of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit Redemption Right.
(as calculated in accordance with the Charterc) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a8.04(a) and this Section 8.5(b8.04(b), the Tendering Parties a Limited Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right if the delivery of REIT Shares to such Partner on the Specified Redemption Date by the Company pursuant to this Section 8.5, 8.04(b) (regardless of whether or not the Tendering Party shall submit the following to the General Partner, Company would in addition to the Notice of Redemption:
fact exercise its rights under Section 8.04(b)) would (i) A written affidavitresult in such Partner or any other person owning, dated the same date as the Notice of Redemptiondirectly or indirectly, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or Limitation (as defined in the Common Share Ownership Limit (orArticles of Incorporation) and calculated in accordance therewith, if applicable except as provided in the Excepted Holder Limit);
Articles of Incorporation, (ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional result in REIT Shares prior being owned by fewer than 100 persons (determined without reference to the closing any rules of the Redemption on the Specified Redemption Date;
attribution), (iii) An undertaking to certify, at and as a condition to result in the closing Company being “closely held” within the meaning of Section 856(h) of the Redemption on Code, (iv) cause the Specified Redemption DateCompany to own, that either directly or constructively, 10% or more of the ownership interests in a tenant of the Company’s, the Partnership’s or a Subsidiary Partnership’s real property, within the meaning of Section 856(d)(2)(B) of the Code, or (av) cause the actual and constructive ownership acquisition of REIT Shares by such Partner to be “integrated” with any other distribution of REIT Shares or OP Units for purposes of complying with the Tendering Party registration provisions of the Securities Act of 1933, as amended (the “Securities Act”). The General Partner, in its sole and absolute discretion, may waive the restriction on redemption set forth in this Section 8.04(c). The consummation of any Related Party remain unchanged from that disclosed redemption in the affidavit required by Section 8.5(c)(1) or (b) after giving effect exchange for REIT Shares shall be subject to the Redemption, neither the Tendering Party nor expiration or termination of any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirewaiting period under applicable law.
(d) Any Cash Amount to be paid to a Tendering Party Redeeming Limited Partner pursuant to this Section 8.5 8.04 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 90 days to the extent required for the Partnership or the General Partner Company to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable its best efforts to cause the closing of the acquisition of Tendered redeemed OP Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner or the Company is authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or local law that apply upon a Redeeming Limited Partner’s exercise of the Redemption Right. If a Redeeming Limited Partner believes that it is exempt from such withholding upon the exercise of the Redemption Right, such Partner must furnish the General Partner or the Company with a FIRPTA Certificate in the form attached hereto as Exhibit C. If the Partnership, the Company or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited Partner’s exercise of the Redemption Right and if the Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such Partner in redemption of its OP Units. If, however, the Redemption Amount is less than the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Redemption Amount, the Redemption Amount shall be treated as an amount received by such Partner in redemption of its OP Units, and the Partner shall contribute the excess of the Withheld Amount over the Redemption Amount to the Partnership before the Partnership is required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” taxable as a corporation under Section section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner or the Company determines that imposing such restrictions is necessary, the General Partner or the Company shall give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding Partnership UnitsPartners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which that states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, Partnership being treated as applicablea “publicly traded partnership” under section 7704 of the Code.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Midlantic Office Trust, Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of A. Except as otherwise set forth in any agreements separate agreement entered into between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each a Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (and subject to the terms and conditions set forth hereinherein or therein, on or after the date that is 14 months from the date of issuance of a Common Unit to a Limited Partner, such Limited Partner (other than the Company or any Subsidiary of the Company) shall have the right (the “Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Limited Partner (such Common Units (the being hereafter referred to as “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable onAmount; unless the terms of this Agreement or a separate agreement entered into between the Partnership and the Holder of such Common Units expressly provide that such Common Units are not entitled to the Redemption Right. The Partnership may, in the General Partner’s sole and absolute discretion, redeem Tendered Units at the request of the Holder of such Common Units prior to the end of the applicable 14 month period (or such other period as may be specified in any combination thereofseparate agreement entered into between the Partnership and a Limited Partner). Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the Holders of such Common Units, all Common Units shall be entitled to the Redemption Right. The Tendering Partner (as defined below) shall have no right, with respect to any Common Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right right (the “Tendering PartyPartner”). A Tendering Party The Cash Amount shall be deemed to have offered to sell the Tendered Units described payable in accordance with instructions set forth in the Notice of Redemption to the General Tendering Partner and on the Specified Redemption Date. Any Common Units redeemed by the Partnership pursuant to this Section 8.5A shall be cancelled upon such redemption.
B. Notwithstanding the provisions of Section 8.5A above, if a Limited Partner has delivered to the General Partner a Notice of Redemption then the Company may, in its sole and absolute discretiondiscretion (subject to Section 8.5D), elect to purchase directly assume and satisfy the Partnership’s Redemption Right obligation and acquire such some or all of the Tendered Units by paying from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the Company so elects, the Tendering Partner shall sell the Tendered Units to the Tendering Party either the Cash Amount or Company in exchange for the REIT Shares Amount. Within 15 days of receipt of a Notice of RedemptionIn such event, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Tendering Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice have no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require cause the Partnership to redeem all such Tendered Units. The Company shall give such Tendering Partner written notice of its election on or a portion before the close of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective business on the fifth Business Day after its receipt of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units Notice of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such PartnerRedemption. The Tendering Party Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, submit (i) such information, certification or affidavit as the General Partner, acting as a distinct legal entity, shall assume directly Company may reasonably require in connection with the obligation with respect thereto and shall satisfy application of the Tendering Party’s exercise of its Redemption Right, Ownership Limit to any such acquisition and (ii) such transaction shall be treatedwritten representations, for federal income tax purposesinvestment letters, as a Transfer by legal opinions or other instruments necessary, in the Tendering Party of such Tendered Units Company’ view, to effect compliance with the General Partner in exchange for REIT SharesSecurities Act. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions those provided in the Article Articles of Incorporation, Incorporation or the bylaws Bylaws of the General PartnerCompany, the Securities Act and Act, relevant state securities or “blue sky” lawssky laws and any applicable agreements with respect to such REIT Shares entered into by the Tendering Partner. No Notwithstanding any delay in such delivery (but subject to Section 8.5D), the Tendering Party Partner shall be deemed the owner of such REIT Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date. In addition, the REIT Shares for which the Common Units might be exchanged shall also bear all legends deemed necessary or appropriate by the Company. Neither any Tendering Partner whose Tendered Units are acquired by the General Partner Company pursuant to this Section 8.5B, any Partner, any Assignee nor any other interested Person shall have any right to require or cause the Company to register, qualify or require the General Partner to register list any REIT Shares owned or qualify held by such Person, whether or not such REIT Shares are issued pursuant to this Section 8.5B, with the Commission, with any federal or state securities agency commissioner, department or agency, under the Securities Act or to list such REIT Shares on the Exchange Act or with any stock exchange; unless subject to a separate written agreement pursuant to which the Company has granted registration or similar rights to any such Person.
C. Each Tendering Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same. Each Tendering Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units to the General Partner (or its designee), such Tendering Partner shall assume and pay such transfer tax. Each Tendering Partner further agrees to pay to the Partnership the amount of any Withholding Payment or other tax withholding due upon the redemption of Tendered Units and authorizes the Partnership to retain such portion of the Cash Amount as the Partnership reasonably determines is necessary to satisfy its Withholding Payment or other tax withholding obligations. In the event the Company elects to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount, the Tendering Partner agrees to pay to the Company the amount of any Withholding Payment or other tax withholding due upon the redemption of Tendered Units and, in the event the Tendering Partner has not paid or made arrangements satisfactory to the Company, it its sole discretion, to pay the amount of any such Withholding Payment or other tax withholding prior to the Specified Redemption Date, the Company, in its sole discretion, may elect to either cancel such exchange (in which case the Tendering Partner’s exercise of the Redemption Right will be null and void ab initio), satisfy such Withholding Payment or other tax withholding obligation by retaining REIT Shares with a fair market value, as determined by the Company in its sole discretion, equal to the amount of such obligation, or satisfy such Withholding Payment or other tax withholding obligation using amounts paid by the Partnership, which amounts shall be treated in the manner set forth in Section 5.6 (i.e., by treating such amount as a Withholding Payment).
D. Notwithstanding the provisions of Section 8.5(a) and this 8.5A, Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.8.5B,
Appears in 1 contract
Samples: Limited Partnership Agreement
Redemption Right. (a) Subject Any Rio Tinto Member shall be entitled to this Section 8.5 and cause the provisions Company to acquire by redemption at any time all or any portion of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Common Membership Units held by them, each Limited Partner other than it (the General Partner, after holding any Partnership Units for "Redemption Right") at least one year (or such shorter period as consented a redemption price to be paid by the General Partner Company equal to and in the form of the Cash Settlement. Any Rio Tinto Member desiring to exercise its sole discretion), Redemption Right (the "Redeeming Member") shall have exercise such right by giving written notice (the right (subject "Redemption Notice") to the terms and conditions set forth herein) Company with a copy to require CPE. The Redemption Notice shall specify the Partnership to redeem (a “Redemption”) all or a portion number of such Partnership Common Membership Units (the “Tendered "Redeemed Units”") in exchange for REIT Shares issuable onthat the Redeeming Member intends to have the Company redeem and a date, which is not more than sixty (60) Business Days after delivery of the Redemption Notice or as otherwise agreed between the Cash Amount payable onCompany and such Redeeming Member, or any combination thereof, on which date exercise of the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to completed (the "Redemption Date") unless the Redeeming Member has timely delivered a Retraction Notice of Redemption delivered to as provided in Section 9.1(c). Notwithstanding the Partnership (with a copy to the General Partner) by the Limited Partner exercising foregoing sentence, if any Rio Tinto Member exercises the Redemption Right within one hundred eighty (180) days following the “Tendering Party”). A Tendering Party date of this Agreement and after giving effect to the redemption of the Redeemed Units the Rio Tinto Members, collectively, will cease to own any Common Membership Units, the Redemption Date specified in the Redemption Notice shall be deemed to have offered to sell at least sixty (60) Business Days after delivery of the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares AmountNotice. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if Unless (i) it provides notice CPE has assumed the rights and obligations of the Company with respect to the Partnership that it wishes Redemption Right pursuant to withdraw the request and Section 9.1(b), or (ii) the Partnership receives Redeeming Member has timely delivered a Retraction Notice as provided in Section 9.1(c), then, on the notice no less than two business days Redemption Date (to be effective immediately prior to the Specified close of business on the Redemption Date. Notwithstanding ) (x) the foregoingRedeeming Member shall transfer and surrender to the Company the Redeemed Units and represent and warrant to the Company that the Redeemed Units are owned by such Redeeming Member free and clear of all liens and encumbrances and (y) the Company shall (A) cancel the Redeemed Units, (B) pay to the Special Limited Partner Redeeming Member the Cash Settlement to which the Redeeming Member is entitled under this Section 9.1(a) and (C) revise Exhibit A accordingly to reflect the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees cancellation of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Redeemed Units pursuant to this Section 8.5 at any time irrespective 9.1(a). All of the period such Partnership Units have been held by Company's rights and obligations arising from the Special Limited Partner or Redemption Notice shall terminate if the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth Redeeming Member timely delivers a Retraction Notice as provided in Section 8.5(c) and Section 8.5(e9.1(c)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the 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 General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Cloud Peak Energy Inc.)
Redemption Right. (a) A. Subject to this Section 8.5 Sections 8.06.B and 8.06.C hereof, on or after the provisions of any agreements between the Partnership and one or more Limited Partners with respect to Partnership Units held by themEffective Date, each Limited Partner (other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), Company) that is a Common Unitholder shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Units (Limited Partner at a redemption price per Common Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General PartnerCompany) by the Limited Partner who is exercising the Redemption Right redemption right (the “Tendering PartyRedeeming Partner”). A Tendering Party ; provided, however, that the Partnership shall not be deemed obligated to have offered satisfy such Redemption Right if the Company elects to sell purchase the Tendered Common Units described in subject to the Notice of Redemption pursuant to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Section 8.06.B. A Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership one thousand (1,000) Common Units or, if such Limited Partner holds less than 1,000 Partnership one thousand (1,000) Common Units, all of the Partnership Common Units held by such Partner. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Common Units so redeemed, to receive any distribution distributions paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.06, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner.
B. Notwithstanding the provisions of Section 8.06.A, upon an election by a Limited Partner (bother than the Company) to exercise the Redemption Right, the Company may, in its sole and absolute discretion (subject to the limitations on ownership and transfer of Common Shares set forth in the articles of incorporation of the Company), elect to assume directly and satisfy a Redemption Right by paying to the Redeeming Partner either the Cash Amount or the Common Shares Amount, as the Company determines in its sole and absolute discretion, whereupon the Company shall acquire the Common Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Units. If the General Company shall elect to exercise its right to purchase Common Units under this Section 8.06.B with respect to a Notice of Redemption, it shall so notify the Redeeming Partner elects within five (5) Business Days after the receipt by it of such Notice of Redemption. Unless the Company shall exercise its right to assume the obligation purchase Common Units from the Redeeming Partner pursuant to this Section 8.06.B, the Company shall not have any obligation to the Redeeming Partner or the Partnership with respect to redeem Tendered the Redeeming Partner’s exercise of the Redemption Right. In the event the Company shall exercise its right to purchase Common Units and agrees with respect to acquire the Tendered Units for REIT Shares rather than cashexercise of a Redemption Right in the manner described in the first sentence of this Section 8.06.B, then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Partyto such Redeeming Partner’s exercise of its such Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership, and the Company shall treat the transaction shall be treatedbetween the Company and the Redeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner’s Common Units to the General Company. Each Redeeming Partner agrees to execute such documents as the Company may reasonably require in exchange for REIT Shares. The percentage connection with the issuance of Common Shares upon exercise of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable PercentageRight.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange.
C. Notwithstanding the provisions of Section 8.5(a) 8.06.A and this Section 8.5(b)8.06.B, the Tendering Parties a Partner shall have no rights under this Agreement that would otherwise not be prohibited under the Charter.
(c) In connection with an entitled to exercise of the Redemption Right pursuant to this Section 8.5, 8.06.A if the Tendering Party shall submit delivery of Common Shares to such Partner on the following Specified Redemption Date by the Company pursuant to Section 8.06.B (regardless of whether or not the General Partner, Company would in addition to the Notice of Redemptionfact exercise its rights under Section 8.06.B) would:
(i1) 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) violate 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 provision of the Aggregate Share Ownership Limit Certificate of Incorporation or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing bylaws of the Redemption Company as each is in effect on the Specified Redemption Date;
(iii2) An undertaking adversely affect the Company’s ability to certify, at and qualify as a condition real estate investment trust under the Code or subject the Company to the closing any additional taxes under Section 857 or Section 4981 of the Redemption on the Specified Redemption Date, that either Code;
(a3) the actual and constructive ownership constitute or be likely to constitute a violation of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed applicable federal or state securities laws;
(4) result in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from Company being “closely held” within the meaning of Section 856(h) of the Code, ;
(c5) as and if deemed necessary to ensure that cause the Partnership does not constitute to become a “publicly traded partnership” under Section 7704 the Code; and
(6) cause the Partnership to cease to be classified as a partnership for federal income tax purposes, except in the case of the Code, exercise by all Common Unitholders (dother than the Company) the Partnership’s assets being considered “plan assets” of their Redemption Right with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation respect to 100% of the Securities Act or other comparable state law, (f) Common Units held by them.
D. In the registration of event that the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessaryissues additional Partnership Interests pursuant to Section 4.02.A hereof, the General Partner shall give prompt written notice thereof make such revisions to each of this Section 8.06 as it determines are necessary to reflect the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion issuance of such counsel, restrictions are necessary in order to avoid the foregoing, as applicableadditional Partnership Interests.
(f) A fee may be charged (other than to the Adviser, Special Limited E. Each Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights covenants and agrees that all Common Units delivered for redemption pursuant to this Section 8.58.06 shall be delivered to the Partnership or the General Partner, as the case may be, free and clear of all Liens. Notwithstanding anything contained herein to the contrary, neither the General Partner nor the Partnership shall be under any obligation to acquire Common Units which are or may be subject to any Liens. Each Partner further agrees that, if any state or local property transfer or documentary stamp tax is payable as a result of the transfer of its Common Units to the Partnership or the General Partner pursuant to this Section 8.06, such Partner shall assume and pay such transfer or documentary stamp tax.
F. Upon the redemption of Common Units pursuant to this Section 8.06, (i) all such redeemed Partnership Units (other than Partnership Units redeemed pursuant to Section 8.06.B.) shall be cancelled, and (ii) the General Partner shall amend Exhibit A to reflect the new Percentage Interests of the Partners and to (A) either adjust the number of Common Units and the Percentage Interest of the Redeeming Partner or eliminate the Redeeming Partner from Exhibit A, as applicable, and (B) in the event that the General Partner assumes the obligation to satisfy a Redemption Right pursuant to Section 8.06.B., adjust the number of Units and the Percentage Interest of the General Partner to reflect the transfer of such Common Units to the General Partner.
Appears in 1 contract
Redemption Right. (a) Subject to this the terms of Section 8.5 8.05, on or after the date (i) that is one (1) year after the closing of the Offering, James I. Humphrey, Jr. and the provisions of any agreements between the Partnership and one or more Limited Partners Humphrey Xxxxxxxxxx, Xxx. xx Ximitex Xxxxxxrs with respect to the Units received by them in connection with the offering of the REIT Shares issued on November 29, 1994, or (ii) that is six months after the issuance by the Partnership of any Units held by themother than those issued in connection with the November 29, 1994 issuance of REIT Shares (each such date, a "First Redemption Date" with respect to the applicable Units), each Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein"Redemption Right") to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the applicable Units held by such Partnership Units (Limited Partner at a redemption price equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”)Amount. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right (the “Tendering Party”"Redeeming Partner"). A Tendering Party shall be deemed to have offered to sell the Tendered Units described in the Notice of Redemption to the General Partner and the General Partner may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Units by paying to the Tendering Party either the Cash Amount or the REIT Shares Amount. Within 15 days of receipt of a Notice of Redemption, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require the Partnership to redeem all or a portion of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for (i) less than 1,000 one thousand (1,000) Partnership Units or, if such Limited Partner holds less than 1,000 one thousand (1,000) Partnership Units, all of the Partnership Units held by such PartnerPartner and (ii) more than the number of Partnership Units that would, upon redemption, entitle such Limited Partner to 9.9% of the REIT Shares. The Tendering Party Redeeming Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If Notwithstanding the provisions of Section 8.05(a), the General Partner elects or HHTI may, in its sole and absolute discretion, assume directly and satisfy a Redemption Right within the maximum and minimum limits provided in Section 8.05(a) by paying to assume the obligation from Redeeming Partner the Redemption Amount on the Specified Redemption Date, whereupon the General Partner or HHTI, as applicable, shall acquire the Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. In the event the General Partner or HHTI shall exercise its right to redeem Tendered Units and agrees to acquire satisfy the Tendered Units for REIT Shares rather than cashRedemption Right in the manner described in the preceding sentence, then the Partnership shall direct the General Partner have no obligation to issue and deliver such REIT Shares pay any amount to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume directly the obligation Redeeming Partner with respect thereto and shall satisfy the Tendering Party’s to such Redeeming Partner's exercise of its the Redemption Right, and (ii) such each of the Redeeming Partner, the Partnership, and the General Partner shall treat the transaction shall be treatedbetween the General Partner or HHTI, applicable, and the Redeeming Partner as a sale of the Redeeming Partner's Partnership Units to the General Partner or HHTI, as applicable, for federal income tax purposes, as a Transfer by the Tendering Party of . Each Redeeming Partner agrees to execute such Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably requirerequire in connection with the issuance of REIT Shares upon exercise of the Redemption Right.
(dc) Except as provided in Section 8.05(e), the Partnership, the General Partner or HHTI, as the case may be, shall pay the Cash Amount to a Redeeming Partner as the Redemption Amount for such Partner if (i) the acquisition of REIT Shares by such Partner on the Specified Redemption Date would (A) result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of the "Ownership Limit," as defined in the Articles of Incorporation and calculated in accordance therewith, except as provided in the Articles of Incorporation, (B) result in REIT Shares being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in the Articles of Incorporation, (C) result in HHTI being "closely held" within the meaning of Section 856(h) of the Code, (D) cause the General Partner or HHTI to own, directly or constructively, 10% or more of the ownership interests in a tenant of the General Partner's, HHTI's, the Partnership's or the Subsidiary Partnership's real property, within the meaning of Section 856(d)(2)(B) of the Code, or (E) cause the acquisition of REIT Shares by such Partner to be "integrated" with any other distribution of REIT Shares for purposes of complying with the registration provisions of the Securities Act of 1933, as amended, or (ii) the Partnership, the General Partner or HHTI, as the case may be, so elects in its sole discretion, unless the Redeeming Partner delivers an opinion of counsel satisfactory to the Partnership or HHTI, as the case may be, in its sole discretion, opining that the acquisition of REIT Shares would not adversely affect HHTI's status as a REIT under Sections 856-860 of the Code. Any Cash Amount to be paid to a Tendering Party redeeming Limited Partner pursuant to this Section 8.5 8.05 shall be paid on within sixty (60) days after the Specified initial date of receipt by the General Partner of the Notice of Redemption Daterelating to the Partnership Units to be redeemed; provided, however, that the General Partner such sixty (60) day period may elect to cause the Specified Redemption Date to be delayed extended for up to an additional 180 days one hundred eighty (180) day period to the extent required for the Partnership or the General Partner and HHTI to obtain cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees and HHTI and the Partnership agree to use commercially reasonable their best efforts to cause the closing of the acquisition of Tendered redeemed Partnership Units hereunder to occur as quickly as reasonably possible.
(d) Each certificate, if any, evidencing REIT Shares that may be issued in redemption of Partnership Units under Section 8.05 above (the "Redemption Shares") shall bear a restrictive legend in substantially the following form: "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, or any state securities law. No transfer of the Shares represented by this certificate shall be valid or effective unless (A) such transfer is made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Act"), or (B) the holder of the securities proposed to be transferred shall have delivered to the company either a no-action letter from the Securities and Exchange Commission or an opinion of counsel (who may be an employee of such holder) experienced in securities matters to the effect that such proposed transfer is exempt from the registration requirements of the Act which opinion shall be reasonably satisfactory to the Company."
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership partnership does not constitute a “"publicly traded partnership” " under Section 7704 of the Code, (d) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (Humphrey Hospitality Trust Inc)
Redemption Right. (a) Subject On or after the date that is one year from the date of the issuance of a Common Unit or Units to this Section 8.5 a Limited Partner, subject to Sections 8.6(b) and the provisions of 8.6(c) hereof and any agreements separate agreement entered into between the Partnership and one or more a Limited Partners with respect to Partnership Units held by themPartner, each such Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (subject to the terms and conditions set forth herein“Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Units (Limited Partner at a redemption price per Common Unit equal to and in the “Tendered Units”) in exchange for REIT Shares issuable on, or form of the Cash Amount payable on, or any combination thereof, the Specified Redemption Date, as determined to be paid by the General Partner in its sole discretion (a “Redemption Right”)Partnership; provided that the foregoing limitation shall not affect the Limited Partner’s rights under Section 11.2(b) hereof. Any The Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the redemption right (the “Redeeming Partner”); provided, however, that the Partnership shall not be obligated to satisfy such Redemption Right if the STAG REIT elects to purchase the Common Units subject to the Notice of Redemption pursuant to Section 8.6(b). A Limited Partner may not exercise the Redemption Right for less than one thousand (1,000) Common Units at any one time or, if such Limited Partner holds less than one thousand (1,000) Common Units, all of the “Tendering Party”Common Units held by such Partner. The Redeeming Partner shall have no right, with respect to any Common Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date. The Assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In connection with any exercise of such rights by an Assignee on behalf of a Limited Partner, the Cash Amount shall be paid by the Partnership directly to such Assignee and not to such Limited Partner. Any Common Units redeemed by the Partnership pursuant to this Section 8.6(a) shall be cancelled upon such redemption.
(b) Notwithstanding the provisions of Section 8.6(a). A Tendering Party , a Limited Partner that exercises the Redemption Right shall be deemed to have offered to sell the Tendered Common Units described in the Notice of Redemption to the General Partner STAG REIT, and the General Partner STAG REIT may, in its sole and absolute discretion, elect to purchase directly and acquire such Tendered Common Units by paying to the Tendering Party either the Cash Amount or Redeeming Partner the REIT Shares AmountAmount on the Specified Redemption Date, whereupon STAG REIT shall acquire the Common Units offered for redemption by the Redeeming Partner and shall be treated for all purposes of this Agreement as the owner of such Common Units. Within 15 days of receipt of If STAG REIT shall elect to exercise its right to purchase Common Units under this Section 8.6(b) with respect to a Notice of Redemption, it shall so notify the Partnership will send to Redeeming Partner within five (5) Business Days after the Limited Partner submitting the receipt by it of such Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for Redemption. Unless STAG REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request in its sole and (ii) the Partnership receives the notice no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviserabsolute discretion) shall have the exercise its right to require purchase Common Units from the Partnership to redeem all or a portion of their Class E Units or Class I Units Redeeming Partner pursuant to this Section 8.5 at 8.6(b), STAG REIT shall not have any time irrespective of obligation to the period such Partnership Units have been held by the Special Limited Redeeming Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units with respect to the Redeeming Partner’s exercise of the Special Limited Partner or Redemption Right. In the Adviser for Class E event STAG REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E shall exercise its right to purchase Common Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent respect to the aggregate Net Asset Value exercise of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the a Redemption Right for less than 1,000 Partnership Units orin the manner described in the first sentence of this Section 8.6(b), if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such Partner. The Tendering Party shall have no right, obligation to pay any amount to the Redeeming Partner with respect to any Partnership Units so redeemedsuch Redeeming Partner’s exercise of such Redemption Right, to receive any distribution paid with respect to Partnership Units if and each of the record date for such distribution is on or after Redeeming Partner, the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cashPartnership, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General Partner, acting as a distinct legal entity, and STAG REIT shall assume directly treat the obligation with respect thereto transaction between STAG REIT and shall satisfy the Tendering Party’s exercise of its Redemption Right, and (ii) such transaction shall be treatedRedeeming Partner, for federal income tax purposes, as a Transfer by sale of the Tendering Party of such Tendered Redeeming Partner’s Common Units to the General STAG REIT. Each Redeeming Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects agrees to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making execute such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner, the Securities Act and relevant state securities or “blue sky” laws. No Tendering Party whose Tendered Units are acquired by the General Partner shall have any right to cause or require the General Partner to register or qualify such REIT Shares with any federal or state securities agency under the Securities Act or to list such REIT Shares on any stock exchange. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Charter.
(c) In connection with an exercise of the Redemption Right pursuant to this Section 8.5, the Tendering Party shall submit the following to the General Partner, in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share Ownership Limit or the Common Share Ownership Limit (or, if applicable the Excepted Holder Limit);
(ii) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to the closing of the Redemption on the Specified Redemption Date;
(iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
(d) Any Cash Amount to be paid to require in connection with the issuance of REIT Shares upon exercise of the Redemption Right, including, if STAG REIT is relying upon the exemption from registration under the Securities Act provided by Regulation D promulgated under the Securities Act, or any successor rule, a Tendering Party document pursuant to this Section 8.5 shall be paid on which the Specified Redemption DateRedeeming Partner makes a representation that it is an accredited investor; provided, however, that if the General Redeeming Partner cannot make such representation, then the Redeeming Partner shall have no right to exercise its Redemption Right. In case of any reclassification of the REIT Shares (including, but not limited to, any reclassification upon a consolidation or merger in which STAG REIT is the continuing corporation) into securities other than REIT Shares, for purposes of this Section 8.6(b), STAG REIT may elect thereafter exercise its right to cause purchase Common Units for the kind and amount of shares of such securities receivable upon such reclassification by a holder of the number of REIT Shares for which such Common Units could be purchased pursuant to this Section immediately prior to such reclassification. Any REIT Shares issued to a Redeeming Partner upon the exercise by STAG REIT of its right to purchase Common Units under this Section 8.6(b), shall not be required to be registered under the Securities Act, unless subject to a separate agreement between STAG REIT and the Redeeming Partner.
(c) Notwithstanding the provisions of Section 8.6(a) and Section 8.6(b), a Partner shall not be entitled, except as otherwise provided in a written agreement between the Partner and the Partnership, to exercise the Redemption Right pursuant to Section 8.6(a) to the extent that the delivery of REIT Shares to such Partner on the Specified Redemption Date by STAG REIT pursuant to be delayed for up to an additional 180 days to the extent required for the Partnership Section 8.6(b) (regardless of whether or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional not STAG REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to would in fact exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” its rights under Section 7704 of the Code, (d8.6(b)) the Partnership’s assets being considered “plan assets” with the meaning of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act or other comparable state law, (f) the registration of the Partnership as an investment company under the Investment Company Act, (g) the registration of the Partnership, the General Partner or any Affiliate thereof (that is not already registered as an investment adviser under the Advisers Act) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and would (i) be prohibited under the Charter; (ii) require registration under the Securities Act; (iii) cause STAG REIT to no longer qualify as a non-exempt prohibited transaction REIT under ERISA. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicableCode; or (iv) otherwise violate any applicable laws or regulations.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5.
Appears in 1 contract
Samples: Limited Partnership Agreement (STAG Industrial, Inc.)
Redemption Right. (a) Subject to this Section 8.5 and the provisions of A Except as otherwise set forth in any agreements separate agreement entered into between the Partnership and one or more Limited Partners with respect to Partnership Units held by them, each a Limited Partner other than the General Partner, after holding any Partnership Units for at least one year (or such shorter period as consented to by the General Partner in its sole discretion), shall have the right (and subject to the terms and conditions set forth hereinherein or therein, on or after the date that is 12 months from the date of issuance of a Common Unit (or with respect to an LTIP Unit which has been converted into a Common Unit, the date of the issuance of such LTIP Unit) to a Limited Partner, such Limited Partner (other than the Company or any Subsidiary of the Company) shall have the right (the “Redemption Right”) to require the Partnership to redeem (on a “Redemption”) Specified Redemption Date all or a portion of the Common Units held by such Partnership Limited Partner (such Common Units (the being hereafter referred to as “Tendered Units”) in exchange for REIT Shares issuable on, or the Cash Amount payable onAmount; unless the terms of this Agreement or a separate agreement entered into between the Partnership and the Holder of such Common Units expressly provide that such Common Units are not entitled to the Redemption Right. The Partnership may, in the General Partner’s sole and absolute discretion, redeem Tendered Units at the request of the Holder of such Common Units prior to the end of the applicable 12 month period (or such other period as may be specified in any combination thereofseparate agreement entered into between the Partnership and a Limited Partner). Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the Holders of such Common Units, all Common Units shall be entitled to the Redemption Right. The Tendering Partner (as defined below) shall have no right, with respect to any Common Units so redeemed, to receive any distributions with a Partnership Record Date on or after the Specified Redemption Date, as determined by the General Partner in its sole discretion (a “Redemption Right”). Any Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to the General Partner) Partner by the Limited Partner who is exercising the Redemption Right right (the “Tendering PartyPartner”). A Tendering Party The Cash Amount shall be deemed to have offered to sell the Tendered Units described payable in accordance with instructions set forth in the Notice of Redemption to the General Tendering Partner and on the Specified Redemption Date. Any Common Units redeemed by the Partnership pursuant to this Section 8.5.A shall be cancelled upon such redemption. B Notwithstanding the provisions of Section 8.5.A above, if a Limited Partner has delivered to the General Partner a Notice of Redemption then the Company may, in its sole and absolute discretiondiscretion (subject to Section 8.5.D), elect to purchase directly assume and satisfy the Partnership’s Redemption Right obligation and acquire such some or all of the Tendered Units by paying from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the Company so elects, the Tendering Partner shall sell the Tendered Units to the Tendering Party either the Cash Amount or Company in exchange for the REIT Shares Amount. Within 15 days of receipt of a Notice of RedemptionIn such event, the Partnership will send to the Limited Partner submitting the Notice of Redemption a response stating whether the General Partner has determined the applicable Partnership Units will be redeemed for REIT Shares or the Cash Amount, or a combination thereof. In either case, the Limited Tendering Partner shall be entitled to withdraw the Notice of Redemption if (i) it provides notice to the Partnership that it wishes to withdraw the request and (ii) the Partnership receives the notice have no less than two business days prior to the Specified Redemption Date. Notwithstanding the foregoing, the Special Limited Partner and the Adviser (or in the case of Partnership Units received in consideration for management fees, the Performance Allocation, the assignees of the Special Limited Partner and the Adviser) shall have the right to require cause the Partnership to redeem all such Tendered Units. The Company shall give such Tendering Partner written notice of its election on or a portion before the close of their Class E Units or Class I Units pursuant to this Section 8.5 at any time irrespective business on the fifth Business Day after its receipt of the period such Partnership Units have been held by the Special Limited Partner or the Adviser. The Partnership shall redeem any such Class E Units or Class I Units Notice of the Special Limited Partner or the Adviser for Class E REIT Shares or Class I REIT Shares or the Cash Amount (at the Adviser’s or Special Limited Partner’s election) unless the Board of Directors of the General Partner determines that any such Redemption for cash would be prohibited by applicable law or this Agreement, in which case such Class E Units or Class I Units will be redeemed for an amount of Class E REIT Shares or Class I REIT Shares with an aggregate Net Asset Value equivalent to the aggregate Net Asset Value of such Partnership Units (subject to the satisfaction of the restrictions set forth in Section 8.5(c) and Section 8.5(e)). No Limited Partner, other than the Special Limited Partner and the Adviser, may deliver more than two Notices of Redemption during each calendar year. A Limited Partner, other than the Special Limited Partner and the Adviser, may not exercise the Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership Units held by such PartnerRedemption. The Tendering Party Partner shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) If the General Partner elects to assume the obligation from the Partnership to redeem Tendered Units and agrees to acquire the Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, submit (i) such information, certification or affidavit as the General Partner, acting as a distinct legal entity, shall assume directly Company may reasonably require in connection with the obligation with respect thereto and shall satisfy application of the Tendering Party’s exercise of its Redemption Right, Ownership Limit to any such acquisition and (ii) such transaction shall be treatedwritten representations, for federal income tax purposesinvestment letters, as a Transfer by legal opinions or other instruments necessary, in the Tendering Party of such Tendered Units Company’s view, to effect compliance with the General Partner in exchange for REIT SharesSecurities Act. The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which the General Partner elects to issue REIT Shares (rather than the Cash Amount) is referred to as the “Applicable Percentage.” In making such election to acquire Tendered Units, the General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If, pursuant to the terms of this Section 8.5, the General Partner will acquire any number of Tendered Units for REIT Shares rather than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered by the General Partner as duly authorized, validly issued, fully paid and non-assessable nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit (as calculated in accordance with the Charter) and other restrictions those provided in the Article Certificate of Incorporation, Incorporation or the bylaws Bylaws of the General PartnerParent REIT, the Securities Act and Act, relevant state securities or “blue sky” lawssky laws and any applicable agreements with respect to such REIT Shares entered into by the Tendering Partner. No Notwithstanding any delay in such delivery (but subject to Section 8.5.D), the Tendering Party Partner shall be deemed the owner of such REIT Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date. In addition, the REIT Shares for which the Common Units might be exchanged shall also bear all legends deemed necessary or appropriate by the Company. Neither any Tendering Partner whose Tendered Units are acquired by the General Partner Company pursuant to this Section 8.5.B, any Partner, any Assignee nor any other interested Person shall have any right to require or cause the Company to register, qualify or require the General Partner to register list any REIT Shares owned or qualify held by such Person, whether or not such REIT Shares are issued pursuant to this Section 8.5.B, with the Commission, with any federal or state securities agency commissioner, department or agency, under the Securities Act or to list such REIT Shares on the Exchange Act or with any stock exchange; unless subject to a separate written agreement pursuant to which the Company has granted registration or similar rights to any such Person. C Each Tendering Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same. Each Tendering Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units to the General Partner (or its designee), such Tendering Partner shall assume and pay such transfer tax. Each Tendering Partner further agrees to pay to the Partnership the amount of any Withholding Payment or other tax withholding due upon the redemption of Tendered Units and authorizes the Partnership to retain such portion of the Cash Amount as the Partnership reasonably determines is necessary to satisfy its Withholding Payment or other tax withholding obligations. In the event the Company elects to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount, the Tendering Partner agrees to pay to the Company the amount of any Withholding Payment or other tax withholding due upon the redemption of Tendered Units and, in the event the Tendering Partner has not paid or made arrangements satisfactory to the Company, in its sole discretion, to pay the amount of any such Withholding Payment or other tax withholding prior to the Specified Redemption Date, the Company, in its sole discretion, may elect to either cancel such exchange (in which case the Tendering Partner’s exercise of the Redemption Right will be null and void ab initio), satisfy such Withholding Payment or other tax withholding obligation by retaining REIT Shares with a fair market value, as determined by the Company in its sole discretion, equal to the amount of such obligation, or satisfy such Withholding Payment or other tax withholding obligation using amounts paid by the Partnership, which amounts shall be treated in the manner set forth in Section 5.6 (i.e., by treating such amount as a Withholding Payment). D Notwithstanding the provisions of Section 8.5(a8.5.A, Section 8.5.B, Section 8.5.C or any other provision of this Agreement, a Limited Partner (i) shall not be entitled to effect the Redemption Right for cash or an exchange for REIT Shares to the extent that (if the Company were to elect to acquire the Tendered Units for REIT Shares in accordance with Section 8.5.B) the ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the Specified Redemption Date could cause such Partner or any other Person to violate the Ownership Limit and this Section 8.5(b), the Tendering Parties (ii) shall have no rights under this Agreement that to acquire REIT Shares which would otherwise be prohibited under the Charter.
Certificate of Incorporation. To the extent any attempted redemption or exchange for REIT Shares would be in violation of this Section 8.5.D, it shall be null and void ab initio and such Limited Partner shall not acquire any rights or economic interest in the cash otherwise payable upon such redemption or the REIT Shares otherwise issuable upon such exchange. E Notwithstanding anything herein to the contrary (c) In connection but subject to Section 8.5.D), with an exercise of the Redemption Right respect to any redemption or exchange for REIT Shares pursuant to this Section 8.5, : (i) without the Tendering Party shall submit the following to consent of the General Partner, each Limited Partner may effect the Redemption Right only one time in addition to the Notice of Redemption:
(i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and each fiscal quarter; (ii) any Related Party and (b) representing that, after giving effect to without the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess consent of the Aggregate Share Ownership Limit or General Partner, each Limited Partner may not effect the Redemption Right for less than 1,000 Common Share Ownership Limit (Units or, if applicable the Excepted Holder Limit);
Limited Partner holds less than 1,000 Common Units, all of the Common Units held by such Limited Partner; (iiiii) A written representation that neither without the Tendering Party nor consent of the General Partner, each Limited Partner may not effect the Redemption Right during the period after the Partnership Record Date with respect to a distribution and before the record date established by the Parent REIT for a distribution to its common stockholders of some or all of its portion of such distribution; (iv) the consummation of any Related Party has any intention to acquire any additional redemption or exchange for REIT Shares prior shall be subject to the closing expiration or termination of the Redemption applicable waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended; and (v) each Tendering Partner shall continue to own all Common Units subject to any redemption or exchange for REIT Shares, and be treated as a Limited Partner with respect to such Common Units for all purposes of this Agreement, until such Common Units are either paid for by the Partnership pursuant to Section 8.5.A hereof or transferred to the Company and paid for by the issuance of the REIT Shares, pursuant to Section 8.5.B hereof on the Specified Redemption Date;
(iii) An undertaking to certify, at and as . Until a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual and constructive ownership Tendering Partner shall have no rights as a stockholder of the Parent REIT Shares with respect to such Tendering Partner’s Common Units. F All Common Units acquired by the Tendering Party Company pursuant to Section 8.5.B hereof shall automatically, and any Related Party remain unchanged from that disclosed without further action required, be converted into and deemed to be Limited Partner Interests and held by the Company in its capacity as a Limited Partner in the affidavit required by Partnership. G In the event that the Partnership issues additional Partnership Interests to any Additional Limited Partner pursuant to Section 8.5(c)(1) or (b) after giving effect to the Redemption4.2, neither the Tendering Party nor any Related Party shall own REIT Shares in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and
(iv) Any other documents as the General Partner may reasonably require.
shall make such revisions to this Section 8.5 as it determines are necessary to reflect the issuance of such additional Partnership Interests. H For the avoidance of doubt, (di) Any Cash Amount to be paid to a Tendering Party any redemption or exchange for REIT Shares pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided, however, that is subject to Section 11.6 and (ii) the General Partner may elect impose annual volume limits on redemptions (and transfers) as it determines are appropriate to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent required for avoid the Partnership or the General Partner to obtain financing to be used to make such payment of the Cash Amount, by causing additional REIT Shares to be issued or otherwise. Notwithstanding the foregoing, the General Partner agrees to use commercially reasonable efforts to cause the closing of the acquisition of Tendered Units hereunder to occur being treated as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights to prevent, among other things, (a) any Person from owning shares in excess of the Common Share Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the beneficial ownership of the General Partner from being owned by less than 100 persons and the General Partner from being “closely held” within the meaning of Section 856(h) of the Code, (c) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” under Section 7704 of the Code, (d) . I In the Partnership’s assets being considered “plan assets” with event that the meaning General Partner is aware of ERISA or any regulations proposed or promulgated thereunder, (e) the violation of the Securities Act audit or other comparable state law, (f) the registration of the Partnership as formal or informal proceedings that could give rise to an investment company under the Investment Company Act, (g) the registration of the PartnershipImputed Underpayment Amount with respect to any Tendered Units, the General Partner may condition any redemption or any Affiliate thereof exchange of such Tendered Units on the Tendering Partner making arrangements (that is not already registered such as an investment adviser under the Advisers Actescrows or letters of credit) as an investment adviser under the Advisers Act, (h) the violation of any law, rule, regulation by such Limited Partner, the Partnership, satisfactory to the General Partner and their respective officers, directors, employers, shareholders, partners, members or any Affiliate thereof, and (i) a non-exempt prohibited transaction under ERISA. If and when to secure the General Partner determines that imposing Tendering Partner’s potential indemnification obligations should such restrictions is necessary, proceedings lead to the General Partner shall give prompt written notice thereof to each of the Limited Partners holding Partnership Units, which notice shall be accompanied by a copy imposition of an opinion of counsel to the Partnership which states that, in the opinion of such counsel, restrictions are necessary in order to avoid the foregoing, as applicable.
(f) A fee may be charged (other than to the Adviser, Special Limited Partner or their Affiliates) Imputed Underpayment Amount with respect to a Redemption in connection with an exercise of Redemption Rights pursuant to this Section 8.5such Tendered Units.
Appears in 1 contract
Samples: Limited Partnership Agreement (Lamar Media Corp/De)
