EXHIBIT 4.5
PAIRING AGREEMENT
THIS PAIRING AGREEMENT (this "Agreement") is made and entered into as
of May 2, 2002, by and between ARC IV REIT, Inc., a Maryland corporation (the
"REIT"), and Affordable Residential Communities IV, LP, a Delaware limited
partnership (the "OP").
WHEREAS, concurrently with the execution of this Agreement, the REIT
will file Articles Supplementary (the "Articles Supplementary") to its charter
(as supplemented by the Articles Supplementary, the "REIT Charter") with the
State Department of Assessments and Taxation of Maryland whereby the REIT will
reclassify and designate 10,000,000 shares of its Common Stock as shares of
Special Voting Stock, par value $0.01 per share (the "Special Voting Stock");
WHEREAS, the Agreement of Limited Partnership of the OP (the "OP
Agreement") provides for the issuance by the OP from time to time of Partnership
Common Units, including, where so determined by the REIT as the General Partner,
in accordance with the terms of the OP Agreement, the issuance of Partnership
Common Units that are paired on a one-for-one basis with shares of Special
Voting Stock (the "Paired Common Units");
WHEREAS, the OP Agreement and the REIT Charter each provides that the
Paired Common Units and the shares of Special Voting Stock, respectively, are
not transferable, and shall not be transferred on the books of the OP or the
REIT, respectively, except in combination with an equal number of shares of
Special Voting Stock or Paired Common Units, respectively (subject to the
provisions of this Agreement); and
WHEREAS, the OP and the REIT wish to enter into this Agreement for the
purpose of further effectuating the pairing of shares of Special Voting Stock
and Paired Common Units (the "Pairing"), including the establishment of the
terms and conditions which will govern the issuance and the transfer of the
shares of Special Voting Stock and the Paired Common Units.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements contained herein, the parties hereto agree as follows:
1. Transfer of Shares. Commencing on the date hereof and continuing until
such time as this Agreement shall have been terminated in the manner
provided herein:
a. No share of Special Voting Stock shall be transferable, and no
such share shall be transferred on the stock transfer books of the
REIT, unless a simultaneous transfer is made by the same
transferor to the same transferee of the same number of Paired
Common Units.
b. No Paired Common Unit shall be transferable, and no Paired Com mon
Unit shall be transferred on the books of the OP, unless a simul
taneous transfer is made by the same transferor to the same
transferee of the same number of shares of Special Voting Stock.
c. Notwithstanding anything to the contrary contained herein, upon
any acquisition by the OP or the REIT of any Paired Common Units
and any shares of Special Voting Stock (whether pursuant to
Section 8.6 of the OP Agreement or otherwise), all restrictions on
transfer set forth in this Agreement with respect to such Paired
Common Units and such shares of Special Voting Stock so acquired
shall terminate, and any Paired Common Units and shares of Special
Voting Stock acquired by the OP or the REIT may be transferred
without regard to the restrictions set forth in this Agreement.
d. In the event that any shares of Special Voting Stock are
transferred to a trust pursuant to the provisions of Section
7.2(b) of the REIT Char ter, all of the Paired Common Units paired
with such shares shall be automatically transferred to such trust
concurrently therewith and shall be subject to all the provisions
of Section 7.3 of the REIT Char ter to the same extent that the
attached shares of Special Voting Stock are so subject.
2. Issuance of Securities. Commencing on the date hereof and continuing
until such time as this Agreement shall have been terminated in the
manner provided herein:
a. The REIT shall not issue or agree to issue any shares of Special
Voting Stock to any person unless effective provision has been
made for the simultaneous issuance or transfer to the same person
of the same number of Paired Common Units and for the pairing of
such shares of Special Voting Stock and Paired Common Units.
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b. The OP shall not issue or agree to issue any Paired Common Units
to any person unless effective provision has been made for the
simulta neous issuance or transfer to the same person of the same
number of shares of Special Voting Stock and for the pairing of
such Paired Common Units and shares of Special Voting Stock.
c. Nothing herein shall require that any Partnership Common Unit
hereafter issued by the OP be issued as a Paired Common Unit.
3. Stock Certificates. Commencing on the date hereof and continuing until
such time as this Agreement shall have been terminated in the manner
provided herein:
a. Each certificate which is issued representing shares of Special
Voting Stock shall be printed "back-to-back" with a certificate
evidencing the same number of Paired Common Units and shall bear a
conspicuous legend (on the face thereof) referring to the
restrictions on transfer set forth in Section 4 of the Articles
Supplementary.
b. Each certificate which is issued evidencing Paired Common Units
shall be printed "back-to-back" with a certificate representing
the same number of shares of Special Voting Stock and shall bear a
conspicuous legend (on the face thereof) in the form set forth on
Exhibit E of the Partnership Agreement, referring to the
restrictions on transfer set forth in Section 8.9 of the OP
Agreement.
4. Redemption by the OP or Acquisition by the REIT of Paired Common Units.
Commencing on the date hereof and continuing until such time as this
Agreement shall have been terminated in the manner provided herein:
a. All shares of Special Voting Stock acquired by the OP in
connection with any redemption of the attached Paired Common Units
pursuant to Section 8.6.A of the OP Agreement shall be cancelled
and shall become authorized but unissued shares of Special Voting
Stock in accordance with Section 5 of the Articles Supplementary,
and all certificates representing such shares so acquired by the
OP shall be delivered to the REIT for cancellation promptly
following the effec tiveness of such redemption.
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b. All shares of Special Voting Stock acquired by the REIT in connec
tion with any acquisition of the attached Paired Common Units
pursuant to Section 8.6.B of the OP Agreement shall be cancelled
and shall become authorized but unissued shares of Special Voting
Stock in accordance with Section 5 of the Articles Supplementary.
5. Stock Dividends, Reclassifications, etc. Commencing on the date hereof
and continuing until such time as this Agreement shall have been
terminated in the manner provided herein:
a. The REIT shall not (i) declare or pay any dividend in respect of
the outstanding shares of Special Voting Stock consisting in whole
or in part of shares of Special Voting Stock, or (ii) subdivide,
combine or otherwise reclassify the outstanding shares of Special
Voting Stock.
b. The OP shall not (i) declare or pay any dividend in respect of the
outstanding Paired Common Units consisting in whole or in part of
Paired Common Units, or (ii) subdivide, combine or otherwise
reclas sify the outstanding Paired Common Units.
6. Termination. This Agreement and the Pairing may be terminated by mutual
consent of both the REIT and the OP.
7. Amendment. This Agreement may be amended by the parties hereto by
action taken or authorized by the Board of Directors of the REIT and
the general partner of the OP. This Agreement may not be amended except
by an instru ment in writing signed on behalf of each of the parties
hereto.
8. Counterparts. This Agreement may be executed in counterparts, and each
such counterpart hereof shall be deemed to be an original instrument,
but all such counterparts together shall constitute but one agreement.
9. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
10. Entire Agreement. This Agreement contains the entire understanding and
agreement between the parties with respect to its subject matter, and
any and all conflicting or inconsistent discussions, agreements,
promises, representa tions and statements, if any, between the parties
or their representatives that are not incorporated in this Agreement
shall be merged into this Agreement.
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11. Headings. The various section headings are inserted for the purposes of
reference only and shall not affect the meaning or interpretation of
this Agreement or any provision hereof.
12. Severability. The provisions of this Agreement shall be severable, and
any invalidity, unenforceability or illegality of any provision or
provisions of this Agreement shall not affect any other provision or
provisions of this Agree ment, and each term and provision of this
Agreement shall be construed to be valid and enforceable to the full
extent permitted by law.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agree
ment to be executed on its behalf as of the date first written above.
ARC IV REIT, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
AFFORDABLE RESIDENTIAL
COMMUNITIES IV, LP
By: ARC IV REIT, Inc., its general partner
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
