Exhibit 3.2
ELEVENTH AMENDMENT TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
HOST MARRIOTT, L.P.
This ELEVENTH AMENDMENT TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF HOST MARRIOTT, L.P. (this "Eleventh
Amendment"), dated as of August 3, 1999, is entered into by Host Marriott
Corporation, a Maryland corporation, as general partner (the "General Partner")
of Host Marriott, L.P., a Delaware limited partnership (the "Partnership"), for
itself and on behalf of the limited partners of the Partnership (the "Limited
Partners").
WHEREAS, the General Partner has issued on the date hereof
4,000,000 shares of 10% Class A Cumulative Redeemable Preferred Stock (the
"Class A Preferred Stock") in an offering registered under the Securities Act of
1933, as amended, pursuant to that certain Prospectus Supplement, dated July 27,
1999 to a Prospectus dated December 30, 1998 (the "Securities Offering") and the
General Partner has contributed the net proceeds from the sale of such shares of
Class A Preferred Stock to the Partnership in exchange for 100% of a new class
of Units entitled the Class A Preferred Units, which will have rights and
preferences substantially identical to those of the Class A Preferred Stock (it
being understood that, if the General Partner issues additional shares of Class
A Preferred Stock after the date hereof, the General Partner will contribute the
net proceeds from the sale of such additional shares to the Partnership in
exchange for an equal number of additional Class A Preferred Units).
WHEREAS, pursuant to the authority granted to the General
Partner pursuant to Section 4.2 of the Second Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of December 30, 1998 (the
"Partnership Agreement"), the General Partner desires to amend the Partnership
Agreement (i) to establish the Class A Preferred Units as a new class of Units,
(ii) to set forth the designations, preferences, rights, powers, restrictions
and limitations of the Class A Preferred Units and (iii) to issue to the General
Partner 4,000,000 Class A Preferred Units.
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the General Partner hereby amends the Partnership Agreement, as
follows:
1. Amendment to Partnership Agreement.
(a) Article I of the Partnership Agreement is hereby
amended by adding the following defined terms:
"Class A Preferred Capital" means an amount, with respect to
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the General Partner, equal to the product of (i) the number of Class A
Preferred Units then issued and outstanding multiplied by (ii) the sum
of $25.00 and any accumulated, accrued and unpaid distributions on the
Class A Preferred Units.
"Series TS Preferred Capital" means an amount, with respect to
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each Limited Partner who holds Series TS Preferred Units, equal to the
product of (i) the number of Series TS Preferred Units held by such
Limited Partner multiplied by (ii) the sum of $12.66 and any
accumulated, accrued and unpaid distributions on the Series TS
Preferred Units.
(b) The definition of "Unit" set forth in Article I of
the Partnership Agreement is hereby amended by deleting the last sentence of
such definition and inserting the following as the last sentence of such
definition: "The ownership of each class of Units shall be evidenced in a manner
approved by the General Partner."
(c) Section 4.2 of the Partnership Agreement is hereby
amended by adding after Section 4.2.E the following section:
F. Class A Preferred Units. Under the
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authority granted to it pursuant to Section 4.2.A hereof, the General Partner
hereby establishes an additional Class of Units entitled "Class A Preferred
Units" (the "Class A Preferred Units"). Class A Preferred Units shall have the
designations, preferences, rights, powers, restrictions and limitations set
forth in Exhibit H hereto.
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(d) Section 6.1.A of the Partnership Agreement is hereby
amended by deleting Section 6.1.A of the Partnership Agreement and
adding the following after the first paragraph of Section 6.1:
A. Net Income. After giving effect to the
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special allocations set forth in Section 1 of Exhibit C, Net
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Income shall be allocated:
(i) first to the General Partner to the
extent the Net Losses previously allocated to the
General Partner pursuant to Section 6.1.B(iv) exceed
the Net Income previously allocated to the General
Partner pursuant to this Section 6.1.A(i);
(ii) second, to the General Partner to the
extent that Net Losses previously allocated to the
General Partner pursuant to Section 6.1.B(iii) exceed
the sum of (A) Net Income previously allocated to the
General Partner pursuant to this Section 6.1.A(ii)
and (B) gross income specially allocated to the
General Partner pursuant to Section 6.1.E;
(iii) third to the Limited Partners, in
proportion to the amount of Net Losses allocated to
each such Limited Partner pursuant to Section
6.1.B(ii), to the extent Net Losses previously
allocated to each such Limited Partner pursuant to
Section 6.1.B(ii) exceed Net Income previously
allocated to each such Limited Partner pursuant to
this Section 6.1.A(iii);
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(iv) fourth to the General Partner and the
Limited Partners, in proportion to the amount of Net
Losses allocated to each such Partner pursuant to
Section 6.1.B(i), to the extent Net Losses previously
allocated to each such Partner pursuant to Section
6.1.B(i) exceed Net Income previously allocated to
each such Partner pursuant to this Section 6.1.A(iv);
(v) fifth, to the holders of any Partnership
Interests that are entitled to any preference in
distribution in accordance with the rights of such
class of Partnership Interests until each such
Partnership Interest has been allocated, on a
cumulative basis pursuant to this Section 6.1.A(v),
Net Income equal to the amount of distributions
received which are attributable to the preference of
such class or Partnership Interests (and, within such
class, pro rata in proportion to the respective
Percentage Interest in such class as of the last day
of the period for which such allocation is being
made); and
(vi) sixth, with respect to Partnership
Interests that are not entitled to any preference in
distributions, pro rata to each such class in
accordance with the terms of such class as set forth
in this Agreement or otherwise established by the
General Partner pursuant to Section 4.2 (and, within
such class, pro rata in proportion to the respective
Percentage Interest in such class as of the last day
of the period for which such allocation is being
made).
(e) Section 6.1.B of the Partnership Agreement is hereby
amended by deleting Section 6.1.B of the Partnership Agreement adding
the following after Section 6.1.A:
B. Net Losses. After giving effect to the
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special allocations set forth in Section 1 of Exhibit C, Net
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Losses shall be allocated:
(i) first, to each Partner who holds Units
not entitled to any preference in distributions, pro
rata to each such class in accordance with the terms
of such class as set forth in this Agreement or
otherwise established by the General Partner pursuant
to Section 4.2 (and within such class, pro rata to
each Partner in proportion to the respective
Percentage Interests held by such Partner in such
class as of the last day of the period for which the
allocation is being made) until the Adjusted Capital
Account (ignoring for this purpose any amounts a
Partner is obligated to contribute to the capital of
the Partnership under state law as described in
Regulation Section 1.704-1(b)(2)(ii)(c)(2) and
reduced by the Partner's Series TS Preferred Capital
and the Partner's Class A Preferred Capital) of each
such Partner is zero;
(ii) second, to each Limited Partner who
holds Series TS Preferred Units, pro rata in
proportion to the respective Percentage Interest in
such
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series of Units as of the last day of the period for
which the allocation is being made, until the
Adjusted Capital Account of such Limited Partner is
zero;
(iii) third, to the General Partner as
holder of the Class A Preferred Units until the
Adjusted Capital Account (ignoring for this purpose
any amounts the General Partner is obligated to
contribute to the capital of the Partnership under
state law as described in Regulation Section
1.704-1(b)(2)(ii)(c)(2)) of the General Partner is
zero; and
(iv) fourth to the General Partner.
(f) Section 6.1 of the Partnership Agreement is hereby
amended by adding after Section 6.1.D the following
section:
X. Xxxxx Income Allocation. Notwithstanding Section
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6.1.A and Section 6.1.B, but subject to the special allocations set forth in
Section 1 of Exhibit C, to the extent the General Partner's Adjusted Capital
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Account does not equal at least the Class A Preferred Capital after taking into
account the allocations set forth in Section 6.1.A and Section 6.1.B, then the
General Partner shall be specially allocated items of gross income in an amount
that causes the General Partner's Capital Account to be equal to the Class A
Preferred Capital.
2. The Partnership Agreement is hereby amended by
attaching thereto as Exhibit H the Exhibit H attached hereto.
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3. Pursuant to Section 7.1.A of the Partnership
Agreement, the General Partner hereby amends and restates Exhibit A to the
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Partnership Agreement as set forth in Exhibit A attached hereto to reflect the
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issuance of 4,000,000 Class A Preferred Units to the General Partner in
connection with the Securities Offering effective as of August 3, 1999.
4. Certain Capitalized Terms. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned in the
Partnership Agreement. Except as modified herein, all covenants, terms and
conditions of the Partnership Agreement shall remain in full force and effect,
which covenants, terms and conditions the General Partner hereby ratifies and
affirms.
[SIGNATURE PAGE APPEARS ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the undersigned has executed this Eleventh
Amendment as of the 3rd day of August, 1999.
HOST MARRIOTT CORPORATION, as
General Partner of Host Marriott, L.P.
By:
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Xxxxxxxxxxx X. Xxxxxxxx, Senior Vice
President, General Counsel and Secretary
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EXHIBIT H
DESIGNATION OF THE PREFERENCES, CONVERSION
AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS AND LIMITATIONS AS
TO CLASS A PREFERRED UNITS
The Class A Preferred Units ("Class A Preferred Units") shall
have the following designations, preferences, rights, powers, restrictions and
limitations:
(1) Certain Defined Terms. Capitalized terms used but not defined
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herein shall have the meanings ascribed thereto in the Partnership Agreement.
The following capitalized terms used in this Designation of Class A Preferred
Units shall have the respective meanings set forth below:
"Business Day" means any day, other than a Saturday or Sunday,
that is not a day on which banking institutions in The City of New York are
authorized or required by law, regulation or executive order to be closed.
"Class A Preferred Stock" means the 10% Class A Cumulative
Redeemable Preferred Stock, par value $.01 per share, liquidation preference
$25.00 per share of the General Partner.
"Distribution Junior Units" means Class A Units, Class B
Units, the Series TS Preferred Units, the Series A Junior Participating
Preferred Units and any other class or series of Units now or hereafter issued
and outstanding the terms of which do not expressly provide that such class or
series of Units ranks senior to or on a parity with the Class A Preferred Units
in the distribution of assets on any liquidation, dissolution or winding up of
the Partnership.
"Distribution Parity Units" means any class or series of Units
hereafter issued and outstanding which by its express terms rank on a parity
with the Class A Preferred Units in the distribution of assets on any
liquidation, dissolution or winding up of the Partnership.
"Distribution Period" means a quarterly period of each
calendar year that ends on January 15, April 15, July 15 and October 15 in which
any Class A Preferred Units are outstanding, commencing with the Original Issue
Date, except that the Distribution Period during which any Class A Preferred
Units shall be redeemed pursuant to Section 4 shall end on and include such date
of redemption.
"Dividend Junior Units" means the Class A Units, Class B
Units, the Series TS Preferred Units, the Series A Junior Participating
Preferred Units, and any other class or series of Units the terms of which do
not expressly provide that such class or series of Units ranks senior to or on a
parity with the Class A Preferred Units in the payment of distributions.
"Dividend Parity Units" means any class or series of Units
hereafter issued and outstanding which by its express terms rank on a parity
with the Class A Preferred Units in the payment of distributions.
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"Fully Junior Units" means the Class A Units, the Class B
Units, the Series TS Preferred Units, the Series A Junior Participating
Preferred Units and any other class or series of Units now or hereafter issued
and outstanding which are both Distribution Junior Units and Dividend Junior
Units.
"Junior Units" means the Class A Units, Class B Units, the
Series TS Preferred Units, the Series A Junior Participating Preferred Units and
any other class or series of Units now or hereafter issued and outstanding which
are either Distribution Junior Units or Dividend Junior Units or both. All
references to "Junior Units" shall include, without limitation, all Fully Junior
Units.
"Original Issue Date" means August 3, 1999.
"Parity Units" means any Units hereafter issued and
outstanding which are either Distribution Parity Units or Dividend Parity Units
or both.
"set apart for payment" shall be deemed to include, without
any action other than the following, the recording by the Partnership in its
accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to a declaration of distribution by the Partnership, the allocation of
funds to be so paid on any class of series of Units; provided, however, that if
any funds for any class or series of Junior Units or any class or series of
Parity Units are placed in a separate account of the Partnership or delivered to
a disbursing, paying or other similar agent, then "set apart for payment" with
respect to the Class A Preferred Units shall mean placing such funds in a
separate account for the Class A Preferred Units or delivering such funds to a
disbursing, paying or other similar agent for the Class A Preferred Units.
"Subject Date" means (a) any date on which any distributions
are authorized, declared or paid or set apart for payment or made upon on any
Junior Units or Parity Units and (b) any date on which any Junior Units or
Parity Units are redeemed, purchased or otherwise acquired for any consideration
or any money paid to or made available for a sinking fund for the redemption of
any such Units by the Partnership.
(2) Distributions.
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(A) Each holder of Class A Preferred Units shall be
entitled to receive out of Available Cash, when, as and if declared by the
General Partner, cumulative cash distributions at the rate of 10% per annum of
the $25.00 liquidation preference per Class A Preferred Unit (equivalent to an
annual rate of $2.50 per Class A Preferred Unit). Distributions (i) shall accrue
daily and shall begin to accrue and shall be fully cumulative from the Original
Issue Date and (ii) shall be payable quarterly, when, as and if declared by the
General Partner, in arrears in cash on the last day of each Distribution Period,
commencing on October 15, 1999 or if such day is not a Business Day, such
distribution may be paid on the next succeeding Business Day. If the last day of
a Distribution Period is not a Business Day, the payment of such distribution on
the next succeeding Business Day shall have the same force and effect as if made
on the last day of such Distribution Period, and no additional sum shall accrue
on the amount so payable for the period
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from and after the last day of the Distribution Period to the next succeeding
Business Day. Accrued and unpaid distributions for any past Distribution Period
may be declared and paid at any time and for such interim periods, without
reference to any regular distribution date, to the holders of the Class A
Preferred Units on such date as may be fixed by the General Partner. Any
distribution made on the Class A Preferred Units shall first be credited against
the earliest accrued but unpaid distribution due with respect to the Class A
Preferred Units which remain payable.
(B) The amount of distributions on the Class A Preferred
Units for any Distribution Period or portion thereof will be computed on the
basis of a 360-day year consisting of twelve 30-day months (it being understood
that the distribution payable on October 15, 1999 shall be for less than a full
quarter). No interest, or sum of money in lieu of interest, shall be payable in
respect of any distribution payment or payments on the Class A Preferred Units
that may be in arrears, in excess of the full cumulative distributions described
above in Section 2(A).
(C) So long as any Class A Preferred Units are
outstanding, no full distributions shall be authorized, declared or paid or set
apart for payment on any class or series of Dividend Parity Units or Dividend
Junior Units for any period unless full cumulative distributions have been or
contemporaneously are authorized, declared and paid or authorized, declared and
a sum sufficient for the payment thereof set apart for such payment on the Class
A Preferred Units for all past Distribution Periods (including, without
limitation, any Distribution Period that terminates on a Subject Date). When
such cumulative distributions are not paid in full or a sum sufficient for such
full payment is not set apart on the Class A Preferred Units and any class or
series of Dividend Parity Units, all distributions authorized and declared upon
the Class A Preferred Units and any other class or series of Dividend Parity
Units will be authorized and declared pro rata so that the amount of
distributions authorized and declared with respect to the Class A Preferred
Units and such other class or series of Dividend Parity Units will in all cases
bear to each other the same ratio that accrued and unpaid distributions on the
Class A Preferred Units and such other class or series of Dividend Parity Units
bear to each other.
(D) Except as provided in the immediately preceding
paragraph, so long as any Class A Preferred Units are outstanding, unless full
cumulative distributions on all outstanding Class A Preferred Units have been or
contemporaneously are authorized, declared and paid or authorized, declared and
a sum sufficient for the payment thereof set apart for such payment on the Class
A Preferred Units for all past Distribution Periods (including without
limitation, any Distribution Period that terminates on a Subject Date) no
distributions (other than distributions paid solely in Fully Junior Units) shall
be authorized, declared or paid or set apart for payment on any Junior Units or
Parity Units, nor shall any Junior Units or any Parity Units be redeemed,
purchased or otherwise acquired for any consideration or any monies paid to or
made available for a sinking fund for the redemption of any such Junior Units or
Parity Units by the Partnership except (i) by redemption or exchange of such
Units for Fully Junior Units, (ii) by redemption or exchange of such Units by
the General Partner for Shares ranking junior to the Shares of Class A Preferred
Stock as to dividends and as to distributions of assets upon the General
Partner's liquidation, dissolution and winding up and (iii) to preserve the
General Partner's status as a REIT or to preserve the Partnership's status as a
"partnership" for federal income tax purposes.
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(E) No distributions on the Class A Preferred Units shall
be authorized or declared by the General Partner or paid or set apart for
payment by the Partnership at such time as the terms and provisions of any
agreement of the General Partner or the Partnership, including any
organizational document or agreement relating to indebtedness of either of them,
prohibits such authorization, declaration, payment or setting apart for payment
or provides that such authorization, declaration, payment or setting apart for
payment would constitute a breach thereof or a default thereunder, or if such
authorization, declaration or payment shall be restricted or prohibited by law.
Notwithstanding the foregoing, distributions on the Class A Preferred Units will
accrue and be cumulative whether or not the terms and provisions of any
agreement of the Partnership or the General Partner prohibits the payment of
distributions, whether or not the Partnership has earnings, whether or not there
is Available Cash or funds legally available for the payment of such
distributions and whether or not such distributions are authorized.
(F) All references to "accrued" or "accrued and unpaid"
distributions on the Class A Preferred Units (and all references of like import)
include, unless otherwise expressly stated or the context otherwise requires,
accumulated distributions, if any, on the Class A Preferred Units; and all
references to "accrued" or "accrued and unpaid" distributions on any class or
series of Units other than the Class A Preferred Units include, if, and only if,
such other class or series of Units provides for cumulative distributions and
unless otherwise expressly stated or the context otherwise requires, accumulated
distributions, if any, thereon.
3. Liquidation Preference.
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(A) In the event of any liquidation, dissolution or
winding up of the Partnership, whether voluntary or involuntary, before any
payment or distribution of the assets of the Partnership shall be made to or set
apart for the holders of any Distribution Junior Units, the holders of the Class
A Preferred Units shall be entitled to receive $25.00 per Class A Preferred
Unit, plus an amount equal to all distributions (whether or not earned or
declared) accumulated, accrued and unpaid thereon to, but not including, the
date of payment (such aggregate amount the "Class A Liquidation Preference").
Until the holders of the Class A Preferred Units have been paid the Class A
Liquidation Preference in full, no payment or distribution will be made to any
holder of any Distribution Junior Units upon the liquidation, dissolution or
winding up of the Partnership. If, upon any such liquidation, dissolution or
winding up of the Partnership, the assets of the Partnership, or the proceeds
thereof, distributable to the holders of the Class A Preferred Units shall be
insufficient to pay in full the Class A Liquidation Preference and liquidating
payments on any other class or series of Distribution Parity Units, then such
assets, or the proceeds thereof, shall be distributed among the holders of the
Class A Preferred Units and the holders of such Distribution Parity Units
ratably in proportion to the full liquidating distributions (including, if
applicable, accumulated, accrued and unpaid distributions) to which they would
otherwise respectively be entitled.
(B) Subject to the rights of the holders of Distribution
Parity Units upon any liquidation, dissolution or winding up, whether voluntary
or involuntary, of the Partnership, after payment in full of the Class A
Liquidation Preference for all outstanding Class A Preferred Units shall have
been made to the holders of the Class A Preferred Units, as provided in Section
3(A),
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any other class or series of Distribution Junior Units shall, subject to any
respective terms and provisions applying thereto, be entitled to receive any and
all assets, or the proceeds thereof, remaining to be paid or distributed, and
the holders of the Class A Preferred Units, as such, shall not be entitled to
share therewith. After payment of the full amount of the Class A Liquidation
Preference for each outstanding Class A Preferred Unit, the holders of the Class
A Preferred Units, as such, will have no right or claim to any of the remaining
assets of the Partnership. The preceding sentence shall not affect the right of
the General Partner or any other holder of Class A Preferred Units to share in
any distribution or payment of the assets of the Partnership upon any
liquidation, dissolution or winding up, whether voluntary or involuntary, of the
Partnership as a result of its holding another class or series of Units.
(C) None of a consolidation or merger of the Partnership
with or into another entity, or a sale, lease, transfer or conveyance of all or
substantially all of the Partnership's property or business, shall be considered
a liquidation, dissolution or winding up of the Partnership.
(4) Redemption. If, and only if, shares of Class A Preferred Stock
are redeemed (whether automatically or at the option of the General Partner or
otherwise), the Partnership shall, on the date set for redemption of such shares
of Class A Preferred Stock, redeem an equal number of Class A Preferred Units at
a redemption price equal to the product of (i) the number of Class A Preferred
Units being redeemed and (ii) the sum of $25.00 and all distributions (whether
or not earned or declared) accumulated, accrued and unpaid thereon to, but not
including, the date fixed for redemption of such Units.
(5) Ranking. Any class or series of Units shall be deemed to rank:
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(A) prior to the Class A Preferred Units, as to the
payment of distributions and as to distributions of assets upon liquidation,
dissolution or winding up of the Partnership, if the express terms of such class
or series of Units provides that the holders of such class or series of Units
shall be entitled to the payment of distributions or the distribution of assets
upon liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of the Class A Preferred Units;
(B) on a parity with the Class A Preferred Units as to
the payment of distributions and as to distributions of assets upon liquidation,
dissolution or winding up of the Partnership, whether or not the distribution
rates, distribution payment dates or redemption or liquidation prices per Unit
are different from those of the Class A Preferred Units, if the express terms of
such class or series of Units provide that the holders of such class or series
of Units and the Class A Preferred Units shall be entitled to the payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued, accumulated (if
applicable) and unpaid distributions per Unit or liquidation preferences, as the
case may be, without preference or priority one over the other;
(C) junior to the Class A Preferred Units, as to the
payment of distributions or as to the distributions of assets upon liquidation,
dissolution and winding up of the Partnership, as the case may be, if such class
or series of Units shall be Junior Units; and
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(D) junior to the Class A Preferred Units, as to the payment
of distributions and as to the distribution of assets upon liquidation,
dissolution and winding up of the Partnership if such class or series of Units
shall be Fully Junior Units.
(6) Allocations. For purposes of maintaining the Capital Accounts
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and in determining the rights of the General Partner, as holder of the Class A
Preferred Units, the Partnership's items of income, gain, loss and deduction
shall be allocated to the General Partner, as holder of the Class A Preferred
Units, and the other Partners in each taxable year (or portion thereof) in
accordance with Article VI of the Partnership Agreement as amended by this
Eleventh Amendment.
(7) Voting Rights. The holders of the Class A Preferred Units
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shall not have any voting or consent rights in respect of their partnership
interest represented by the Class A Preferred Units.
(8) Transfer Restrictions. Except as set forth in Section 11.2 of
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the Partnership Agreement, the Class A Preferred Units shall not be
transferable.
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