Exhibit 10.1
SECOND AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
MID-AMERICA APARTMENTS, L.P.
TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINED TERMS.................................................................................... 1
ARTICLE 2
ORGANIZATIONAL MATTERS........................................................................... 9
2.1 Continuation......................................................................... 9
2.2 Application of the Act............................................................... 9
2.3 Purpose and Business................................................................. 9
2.4 Powers............................................................................... 9
2.5 Name, Office and Registered Agent.................................................... 9
2.6 Partners............................................................................. 9
2.7 Term................................................................................. 10
2.8 Filing of Certificate and Perfection of Limited Partnership......................... 10
ARTICLE 3
CAPITAL CONTRIBUTIONS AND ACCOUNTS............................................................... 10
3.1 Capital Contributions................................................................ 10
3.2 Admission of Additional Limited Partners............................................. 10
3.3 No Preemptive Rights................................................................. 11
3.4 Capital Accounts of the Partners..................................................... 11
ARTICLE 4
DISTRIBUTIONS.................................................................................... 13
4.1 Requirement and Characterization of Distributions.................................... 13
4.2 Amounts Withheld..................................................................... 13
4.3 Withholding.......................................................................... 13
4.4 Distributions Upon Liquidation....................................................... 14
4.5 REIT Distribution Requirements....................................................... 14
ARTICLE 5
ALLOCATIONS...................................................................................... 15
5.1 Allocations of Net Income and Net Loss............................................... 15
5.2 Special Allocation Rules............................................................. 16
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5.3 Allocations for Tax Purposes......................................................... 17
5.4 No Right to Distributions in Kind.................................................... 18
5.5 Limitations on Return of Capital Contributions....................................... 18
5.6 Substantial Economic Effect.......................................................... 18
ARTICLE 6
RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER............................................ 18
6.1 Management of the Partnership........................................................ 18
6.2 Restriction on General Partner's Authority........................................... 20
6.3 Delegation of Authority.............................................................. 20
6.4 Indemnification and Exculpation of Indemnitees....................................... 20
6.5 Liability of the General Partner..................................................... 21
6.6 Reimbursement of General Partner..................................................... 22
6.7 Outside Activities................................................................... 22
6.8 Employment or Retention of Affiliates................................................ 22
6.9 Loans to the Partnership............................................................. 23
6.10 Distributions........................................................................ 23
6.11 Approval of or Prohibition Against Sale of Certain Properties........................ 23
ARTICLE 7
CHANGES IN GENERAL PARTNER....................................................................... 24
7.1 Transfer of the General Partner's Partnership Interest............................... 24
7.2 Admission of a Substitute or Successor General....................................... 24
7.3 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner......... 24
7.4 Removal of a General Partner......................................................... 25
ARTICLE 8
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS................................................... 26
8.1 Management of the Partnership........................................................ 26
8.2 Power of Attorney.................................................................... 26
8.3 Limitation on Liability of Limited Partners.......................................... 26
8.4 Ownership by Limited Partner of Corporate General Partner or Affiliate.............. 26
8.5 Redemption Right..................................................................... 26
ARTICLE 9
TRANSFERS OF PARTNERSHIP INTERESTS............................................................... 27
9.1 Purchase for Investment.............................................................. 27
9.2 Restrictions on Transfer of Limited Partnership Interests........................... 27
9.3 Admission of Substitute Limited Partner.............................................. 28
9.4 Rights of Assignees of Partnership Interests......................................... 28
9.5 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner....... 29
9.6 Joint Ownership of Interests......................................................... 29
ARTICLE 10
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS....................................................... 29
10.1 Books and Records.................................................................... 29
10.2 Custody of Partnership Funds; Bank Accounts.......................................... 29
10.3 Fiscal and Taxable Year.............................................................. 30
10.4 Annual Tax Information and Report.................................................... 30
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10.5 Tax Matters Partner; Tax Elections; Special Basis Adjustments....................... 30
10.6 Reports to Limited Partners.......................................................... 30
ARTICLE 11
AMENDMENT OF AGREEMENT........................................................................... 31
ARTICLE 12
CONSOLIDATION, MERGER OR SALE OF ASSETS OF THE GENERAL PARTNER................................... 31
12.1 Triggering Events.................................................................... 31
12.2 From and After the Occurrence of a Triggering Event.................................. 31
12.3 Additional Issuer Covenants.......................................................... 35
12.4 Application to Later Transactions.................................................... 36
12.5 Waivers and Amendments............................................................... 36
ARTICLE 13
DISSOLUTION AND LIQUIDATION...................................................................... 36
13.1 Dissolution.......................................................................... 36
13.2 Winding up........................................................................... 36
13.3 Compliance with Timing Requirements of Regulations; Allowance for
Contingent or Unforeseen Liabilities or Obligations.................................. 37
13.4 Deficit Capital Account Restoration.................................................. 38
13.5 Deemed Distribution and Recontribution............................................... 38
13.6 Rights of Limited Partners........................................................... 38
13.7 Notice of Dissolution................................................................ 38
13.8 Cancellation of Certificate of Limited Partnership................................... 39
13.9 Reasonable Time for Winding-Up....................................................... 39
ARTICLE 14
GENERAL PROVISIONS............................................................................... 39
14.1 Notices.............................................................................. 39
14.2 Successors........................................................................... 39
14.3 Additional Documents................................................................. 39
14.4 Severability......................................................................... 39
14.5 Entire Agreement..................................................................... 39
14.6 Pronouns and Plurals................................................................. 39
14.7 Headings............................................................................. 39
14.8 Counterparts......................................................................... 39
14.9 Governing Law........................................................................ 39
EXHIBIT AND SCHEDULES
Exhibit A Notice of Exercise of Redemption Right
Schedule 2.4(c) List of Class A Limited Partners and Number of Class A
Common Units held by such Class A Limited Partners
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Schedule 4.2(b)(1) Description of 9.5% Series A Cumulative Preferred Units
Schedule 4.2(b)(2) Description of 8 7/8% Series B Cumulative Preferred Units
Schedule 6.11(f) List of Properties subject to Restrictions on Sale
Schedule 13.4(a) Class A Limited Partners with a Deficit Capital
Account Restoration Obligation and the Maximum Amount of
such Obligation, if any
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SECOND AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
MID-AMERICA APARTMENTS, L.P.
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
("Agreement") is made and entered into as of the ___ day of November, 1997 by
and among MID-AMERICA APARTMENT COMMUNITIES, INC., a
Tennessee corporation (the
"General Partner"), MAC II OF DELAWARE, INC., a Delaware corporation (the
"Class B Limited Partner"), and each of the Persons listed on Schedule 2.4(c)
hereof, together with all Persons who shall hereafter be admitted as Additional
Limited Partners and/or Substitute Limited Partners and who shall hereafter
execute a counterpart to this Agreement (collectively, the "Class A Limited
Partners").
RECITALS
WHEREAS, Mid-America Apartments, L.P. (the "Partnership") was formed as a
limited partnership under the laws of the State of
Tennessee by a Certificate of
Limited Partnership filed with the Secretary of State of the State of
Tennessee
on September 22, 1993; and
WHEREAS, pursuant to Article XI of the First Amended and Restated Agreement
of Limited Partnership of the Partnership (the "First Amendment"), the General
Partner desires to amend and restate the First Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, of mutual covenants
between the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend and restate the First Amendment in its entirety as follows and to
continue the operation of the Partnership on the terms and subject to the
conditions set forth herein:
ARTICLE 1
DEFINED TERMS
The following defined terms used in this Agreement shall have the meanings
specified below:
"AAA" has the meaning provided in Section 12.2(d)(i) hereof.
"ACT" means the
Tennessee Revised Uniform Limited Partnership Act, as it
may be amended from time to time.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to this Partnership as
a Limited Partner pursuant to Section 3.2 hereof.
"ADJUSTED CAPITAL ACCOUNT" means the Capital Account maintained for each
Partner as of the end of each Partnership Year (i) increased by any amounts
which such Partner is obligated to restore pursuant to any provision of this
Agreement or is deemed obligated to restore pursuant to the penultimate
sentences of Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5) and (ii)
decreased by the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner, the
deficit balance, if any, in such Partner's Adjusted Capital Account as of the
end of the relevant Partnership Year.
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"ADJUSTED PROPERTY" means any property the Carrying Value of which has been
adjusted pursuant to Section 3.4 hereof.
"AFFILIATE" means, (i) any Person that, directly or indirectly, controls or
is controlled by or is under common control with such Person, (ii) any other
Person that owns, beneficially, directly or indirectly, 5% or more of the
outstanding capital stock, shares or equity interests of such Person, or (iii)
any officer, director, employee, partner or trustee of such Person or any Person
controlling, controlled by or under common control with such Person (excluding
trustees and persons serving in similar capacities who are not otherwise an
Affiliate of such Person). For the purposes of this definition, "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities, partnership interests or other equity interests.
"AGREED VALUE" means (i) in the case of any Contributed Property, (a) the
agreed-upon value of such property at the time of its contribution to the
Partnership as set forth pursuant to an admission agreement or other agreement
between the Partnership and the contributing Partner or (b) if there is no such
admission or other agreement, the 704(c) Value of such property or other
consideration, reduced by any liabilities either assumed by the Partnership upon
such contribution or to which such property is subject when contributed; and
(ii) in the case of any property distributed to a Partner by the Partnership,
the Partnership's Carrying Value of such property at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of
distribution as determined under Section 752 of the Code and the regulations
thereunder.
"AGREEMENT" has the meaning provided in the preamble hereof.
"APPOINTMENT DATE" has the meaning provided in Section 12.2(d)(i) hereof.
"ARBITRATOR" has the meaning provided in Section 12.2(d)(i) hereof.
"AVAILABLE CASH" means with respect to any period for which such
calculation is being made:
(a) all cash revenue and funds received by the Partnership from
whatever source (excluding the proceeds of any Capital Contribution) plus
the amount of any reduction (including, without limitation, a reduction
resulting because the General Partner determines such amounts are no longer
necessary) in reserves of the Partnership, which reserves are referred to
in clause (b)(v) below;
(b) less the sum of the following (except to the extent made with the
proceeds of any Capital Contribution and except to the extent taken into
account in determining Capital Transaction Proceeds), all of which shall be
paid subject to Section 6.9:
(i) all interest, principal and other debt payments made during such
period by the Partnership,
(ii) all dividends and other distributions in respect of Preferred
Units,
(iii) all other cash expenditures (including capital expenditures)
made by the Partnership during such period,
(iv) investments in any entity (including loans made thereto) to the
extent that such investments are not otherwise described in clauses (b)(i)
through (iii), and
(v) the amount of any increase in reserves established during such
period which the General Partner determines is necessary or appropriate, in
its sole and absolute discretion.
Notwithstanding the foregoing, Available Cash shall not include any cash
received or reductions in reserves or take into account any disbursements made
or reserves established, after commencement of the dissolution and liquidation
of the Partnership.
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"AVERAGE TRADING PRICE" has the meaning provided in Section 12.2(c) hereof.
"BENEFICIAL OWNER" has the meaning provided in Section 12.1 hereof.
"BOOK-TAX DISPARITIES" means, with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Section 3.4 and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.
"BUSINESS DAY" means any day other than a Saturday, Sunday or a day on
which banking institutions in the City of New York are authorized or obligated
by law or executive order to close.
"CAPITAL ACCOUNT" shall mean an account for each Partner established and
maintained in accordance with Section 1.704-1(b)(2)(iv) of the Regulations and
Section 3.4 hereof.
"CAPITAL CONTRIBUTION" means, with respect to any Partner, any cash, cash
equivalents or the Agreed Value of Contributed Property which such Partner
contributes or is deemed to contribute to the Partnership pursuant to Section
3.1 or 3.2 hereof and which shall be treated as a contribution to the
Partnership pursuant to Section 721(a) of the Code.
"CAPITAL TRANSACTION" means a sale, exchange or other disposition (other
than in liquidation of the Partnership) of property or a financing or
refinancing by the Partnership.
"CAPITAL TRANSACTION PROCEEDS" means the net cash proceeds of a Capital
Transaction, after deducting all expenses incurred in connection therewith which
are paid out of such proceeds and after application of any proceeds, at the sole
discretion of the General Partner, toward the payment of any indebtedness of the
Partnership secured by the property that is the subject of that Capital
Transaction, the purchase, improvement or expansion of Partnership property, or
the establishment of any reserves deemed reasonably necessary by the General
Partner; provided, however, that if the Partnership obtains financing for
Partnership properties for which no permanent financing has previously been
obtained, the proceeds of such financing shall not be deemed to be Capital
Transaction Proceeds if and to the extent that the General Partner determines to
reinvest such proceeds in additional and existing real property investments of
the Partnership.
"CARRYING VALUE" means (i) with respect to a Contributed Property or
Adjusted Property, the 704(c) Value of such Property (or in the case of an
Adjusted Property, the fair market value of such property at the time of its
latest adjustment under Section 3.4(c)) reduced (but not below zero) by all
Depreciation with respect to such property charged to the Partners' Capital
Accounts and (ii) with respect to any other Partnership property, the adjusted
basis of such property for federal income tax purposes, all as of the time of
determination. The Carrying Value of any property shall be adjusted from time to
time in accordance with Section 3.4 hereof, and to reflect changes, additions or
other adjustments to the Carrying Value for dispositions and acquisitions of
Partnership properties, as deemed appropriate by the General Partner.
"CASH AMOUNT" means an amount of cash per Partnership Unit equal to the
value of the REIT Shares Amount on the date of receipt by the General Partner of
a Notice of Redemption. The value of the REIT Shares Amount shall be equal to
the REIT Shares Amount times the Average Trading Price. In the event the REIT
Shares Amount includes rights that a holder of REIT Shares would be entitled to
receive, then the value of such rights shall be determined by the General
Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.
"CERTIFICATE" means any instrument or document which is required under the
laws of the State of
Tennessee, or any other jurisdiction wherein the
Partnership conducts business, to be signed and sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner
3
in Section 8.02) and filed for recording in the appropriate public offices
within the State of
Tennessee or such other jurisdiction to perfect or maintain
the Partnership as a limited partnership, to effect the admission, withdrawal,
or substitution of any Partner of the Partnership, or to protect the limited
liability of the Limited Partners as limited partners under the laws of the
State of
Tennessee or such other jurisdiction.
"CHARTER" means the Charter of the General Partner filed with the Secretary
of State of the State of
Tennessee on September 22, 1993, as amended and
restated from time to time.
"CLASS A COMMON UNITS" means all Common Units issued to Class A Limited
Partners.
"CLASS A LIMITED PARTNERS" has the meaning provided in the preamble hereof.
"CLASS B COMMON UNITS" means all Common Units issued to the General
Partner, the Class B Limited Partner and all Affiliates.
"CLASS B LIMITED PARTNER" has the meaning provided in the preamble hereof,
and shall include any other Affiliate of the General Partner in addition thereto
who shall hereafter own Class B Common Units as a Limited Partner.
"CODE" means the Internal Revenue Code of 1986, as amended, and as
hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code at the date hereof and any
succeeding provision of the Code.
"COMMON STOCK" has the meaning provided in Section 12.2(a) hereof.
"COMMON UNITS" means all Partnership Interests that are not specifically
designated as Preferred Units pursuant to Section 3.2(c).
"CONSENT" means with respect to Limited Partners holding any class of Units
entitled to vote on any matter, the written consent of those Limited Partners
holding a majority of such Units at the time in question, except to the extent
this Agreement shall require more or less than such majority.
"CONTRIBUTED PROPERTY" means each property or other asset (but excluding
cash), in such form as may be permitted by the Act contributed or deemed
contributed to the Partnership. Once the Carrying Value of a Contributed
Property is adjusted pursuant to Section 3.4(c) hereof, such property shall no
longer constitute a Contributed Property for purposes of Section 3.4(c) hereof,
but shall be deemed an Adjusted Property for such purposes.
"CONVERSION FACTOR" shall mean the digit 1, adjusted from time to time in
an appropriate manner to take into account any REIT Capital Change, and further
adjusted after a Trigger Occurrence in the manner set forth in Section 12.2(b).
"COURT" has the meaning provided in Section 12.2(d)(i) hereof.
"CUMULATIVE UNPAID PRIORITY DISTRIBUTION ACCOUNT" means, with respect to
any Class A Limited Partner, an amount equal to (i) the aggregate of all
Priority Distribution Amounts with respect to the Class A Common Units held by
such Class A Limited Partner, less (ii) the cumulative amount of Available Cash
and the cumulative amount of any Capital Transaction Proceeds distributed with
respect to such Class A Common Units pursuant to Sections 4.1(b)(i) and (ii) and
4.1(c)(i) hereof.
"DEPRECIATION" means for any Partnership Year or other period, an amount
equal to the federal income tax depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such year or other
period, except that if the Carrying Value of an asset differs from its adjusted
basis for federal income tax purposes at the beginning of such year or other
period, Depreciation shall be an amount which bears the same ratio to such
beginning Carrying Value as the federal income tax depreciation, amortization,
or other cost recovery deduction for such year or period bears to such beginning
adjusted tax basis; PROVIDED HOWEVER, that if the federal income tax
4
depreciation, amortization, or other cost recovery for such year is zero,
Depreciation shall be determined with reference to such beginning Carrying Value
using any reasonable method selected by the General Partner, except that in the
case of a zero basis Contributed Property, such property shall be depreciated
for book purposes over a period of not more than ten years.
"DEFICIT RESTORATION OBLIGATION" has the meaning provided in Section 13.4
hereof.
"DETERMINATION" has the meaning provided in Section 12.2(d)(ii)(4) hereof.
"EVENT OF BANKRUPTCY" as to any Person means the filing of a petition for
relief as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978
or similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within 90 days); insolvency of
such Person as finally determined by a court proceeding; filing by such Person
of a petition or application to accomplish the same or for the appointment of a
receiver or a trustee for such Person or a substantial part of his assets;
commencement of any proceedings relating to such Person as a debtor under any
other reorganization, arrangement, insolvency, adjustment of debt or liquidation
law of any jurisdiction, whether now in existence or hereinafter in effect,
either by such Person or by another, provided that if such proceeding is
commenced by another, such Person indicates his approval of such proceeding,
consents thereto or acquiesces therein, or such proceeding is contested by such
Person and has not been finally dismissed within 90 days.
"EXCHANGE ACT" has the meaning provided in Section 12.1 hereof.
"GENERAL PARTNER" means Mid-America Apartment Communities, Inc., and any
Person who becomes a substitute or additional General Partner as provided
herein, and any of their successors as General Partner.
"GENERAL PARTNER INTEREST" means a Partnership Interest held by the General
Partner that is a general partnership interest.
"INDEMNITEE" means (i) any Person made a party to a proceeding by reason of
his status as (A) the General Partner, or (B) a director or officer of the
Partnership or the General Partner, and (ii) such other Persons (including
Affiliates of the General Partner or the Partnership) as the General Partner may
designate from time to time, in its sole and absolute discretion.
"ISSUER" has the meaning provided in Section 12.2(a) hereof.
"LIMITED PARTNER" means any Person who shall have been duly admitted as a
Limited Partner pursuant hereto and who becomes a Substitute or Additional
Limited Partner, in such Person's capacity as a Limited Partner in the
Partnership.
"LIMITED PARTNERSHIP INTEREST" means the ownership interest of a Limited
Partner in the Partnership at any particular time, including the right of such
Limited Partner to any and all benefits to which such Limited Partner may be
entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of such Act. A Limited Partnership Interest may be expressed as a
number of Partnership Units.
"LIQUIDATING TRANSACTION" means any sale or other disposition of all or
substantially all of the assets of the Partnership following the adoption by the
General Partner of a plan of liquidation for the Partnership.
"LIQUIDATOR" has the meaning provided in Section 13.2(a).
"MARKET CAPITALIZATION" has the meaning provided in Section 12.2(a) hereof.
"NET INCOME" and "NET LOSS" means for any taxable period an amount equal to
the Partnership's taxable income or loss for such taxable period determined in
accordance with Section 703(a) of the Code (for this purpose all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code shall be included in taxable income or loss), with
the following adjustments:
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(a) Except as otherwise provided in Regulations Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss
and deduction shall be made without regard to any election under Section
754 of the Code which may be made by the Partnership; provided, however,
that the amounts of any adjustments to the adjusted bases of assets of the
Partnership made pursuant to Section 734 of the Code as a result of the
distribution of property by the Partnership to a Partner (to the extent
that such adjustments have not previously been reflected in the Partners'
Capital Accounts) shall be reflected in the Capital Accounts of the
Partners in the manner and subject to the limitations prescribed in
Regulations Section 1.704-1(b)(2)(iv)(m).
(b) Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Net Income or Net
Loss pursuant to this definition shall be added to such Net Income or Net
Loss.
(c) The computation of all items of income, gain, loss and deduction
shall be made without regard to the fact that items described in Sections
705(a)(1)(B) or 705(a)(2)(B) of the Code are not includable in gross income
or are neither currently deductible nor capitalized for federal income tax
purposes.
(d) Any income, gain or loss attributable to the taxable disposition
of any Partnership property shall be determined as if the adjusted basis of
such property as of such date of disposition were equal in amount to the
Partnership's Carrying Value with respect to such property as of such date.
(e) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such fiscal year.
(f) In the event the Carrying Value of any Partnership asset is
adjusted pursuant to Section 3.4(c) hereof, the amount of any such
adjustment shall be taken into account as gain or loss from the disposition
of such asset.
(g) Any items specially allocated under Sections 5.1(a), 5.2 and 5.3
hereof shall not be taken into account.
"NONRECOURSE DEDUCTIONS" has the meaning provided in Regulations Section
1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(c).
"NONRECOURSE LIABILITY" has the meaning provided in Regulations Section
1.752-1(a)(2).
"NOTICE OF REDEMPTION" means the Notice of Exercise of Redemption Right
substantially in the form attached as Exhibit A hereto.
"PARTNER" means any General Partner or Limited Partner.
"PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"PARTNER NONRECOURSE DEBT" has the meaning provided in Regulations Section
1.704-2(b)(4).
"PARTNER NONRECOURSE DEDUCTIONS" has the meaning provided in Regulations
Section 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt for a Partnership Year shall be determined
in accordance with the rules of Regulations Section 1.704-2(i)(2).
"PARTNERSHIP" has the meaning provided in the first Recital hereof, and
shall include any successor thereto.
6
"PARTNERSHIP INTEREST" means an ownership interest in the Partnership held
by either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.
"PARTNERSHIP MINIMUM GAIN" has the meaning provided in Regulations Section
1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net
increase or decrease in Partnership Minimum Gain, for a Partnership Year shall
be determined in accordance with the rules of Regulations Section 1.704-2(d). A
Partner's share of Partnership Minimum Gain shall be determined in accordance
with Regulations Section 1.704-2(g)(1).
"PARTNERSHIP RECORD DATE" means the record date established by the General
Partner for the distribution of Available Cash pursuant to Section 4.1(b)
hereof, which record date shall be the same as the record date established by
the General Partner for a distribution to its shareholders of some or all of its
portion of such distribution.
"PARTNERSHIP UNIT" or "UNIT" means a Common Unit or a Preferred Unit.
"PARTNERSHIP YEAR" means the fiscal year of the Partnership, which shall be
the calendar year.
"PERCENTAGE INTEREST" means, with respect to Common Units or Preferred
Units, as the context requires, the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership Units of
such class owned by a Partner by the total number of Partnership Units of such
class then outstanding.
"PERSON" means any individual, partnership, limited liability company,
corporation, trust or other entity.
"PREFERRED UNITS" means all Partnership Interests designated as Preferred
Units and issued by the General Partner from time to time in accordance with the
provisions of Section 3.2(c).
"PREFERRED UNIT DISTRIBUTIONS" has the meaning provided in Section 4.1
hereof.
"PRIORITY DISTRIBUTION AMOUNT" means with respect to each Class A Common
Unit outstanding on a Partnership Record Date (i) the cash dividend per share of
Common Stock (including any dividend designated by the General Partner as a
capital gain dividend pursuant to Section 857(b)(3)(C) of the Code) declared by
the General Partner on the Partnership Record Date, multiplied by (ii) the
Conversion Factor in effect on such Partnership Record Date.
"PROPERTY" means any apartment community or other investment or property in
which the Partnership holds an ownership interest.
"RECAPTURE INCOME" means any gain recognized by the Partnership (computed
without regard to any adjustment required by Section 734 or Section 743 of the
Code) upon the disposition of any property or asset of the Partnership, which
gain is characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.
"RECOURSE LIABILITIES" has the meaning provided in Regulations
Section 1.752-1(a)(1).
"REDEEMING PARTNER" has the meaning provided in Section 8.5(a) hereof.
"REDEMPTION AMOUNT" means either the Cash Amount or the REIT Shares Amount.
"REDEMPTION RIGHT" has the meaning provided in Section 8.5(a) hereof.
"REDEMPTION VALUE" means the value of a Partnership Unit at the time a
Notice of Redemption is delivered by a Partner to the Partnership, as determined
by agreement between the Partner and the General Partner, or if no such
agreement can be reached, as determined by an appraiser which shall be the
corporate finance
7
department of a regional or national investment banking firm selected by the
General Partner which firm has experience in providing fairness opinions in
business transactions, or such other qualified securities appraiser having
experience in appraising securities such as the Partnership Units, as the
General Partner may, in its discretion, select.
"REGISTERED COMMON STOCK" has the meaning provided in Section 12.2(a)
hereof.
"REGULATIONS" means the Federal Income Tax Regulations issued under the
Code, as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any succeeding provision of the Regulations.
"REIT" means a real estate investment trust under Sections 856 through 860
of the Code.
"REIT CAPITAL CHANGE" means any stock split, stock dividend, reverse stock
split, recapitalization, reorganization or other transaction, the consummation
of which would result in additional REIT Shares being issued to existing holders
in respect of then-outstanding REIT Shares or the conversion of then-outstanding
REIT Shares into a lesser number of REIT Shares or securities of a different
character or nature than REIT Shares.
"REIT SHARE" means a share of the common stock of the General Partner or
any option, warrant or right to purchase or subscribe for such share.
"REIT SHARES AMOUNT" means a number of REIT Shares equal to the number of
Partnership Units offered for redemption by a Redeeming Partner; provided,
however that in the event the General Partner issues to all holders of REIT
Shares rights, options, warrants of convertible or exchangeable securities
entitling the shareholders to subscribe for or purchase REIT Shares, or any
other security or property (collectively, the "rights"), then the REIT Shares
Amount shall also include such rights that a holder of that number of REIT
Shares would be entitled to receive. The REIT Shares Amount shall be adjusted,
as appropriate, for any REIT Capital Change to the extent that an identical
capital change shall not be made in respect to the Class A Common Units
outstanding at the time of the REIT Capital Change, to equal the number of REIT
Shares arrived at by multiplying (i) the number of Partnership Units that are
the subject of such Notice of Redemption times (ii) the Conversion Factor.
"REPLACEMENT SHARES" has the meaning provided in Section 12.2(a) hereof.
"SERVICE" means the Internal Revenue Service.
"704(c) VALUE" of any Contributed Property means the fair market value of
such property or other consideration at the time of contribution determined by
the General Partner in its discretion using such reasonable method of valuation
as it may adopt. The General Partner shall use such method as it deems
reasonable and appropriate in its sole and absolute discretion to allocate the
aggregate of the 704(c) Value of Contributed Properties received in a single or
integrated transaction among each separate property on a basis proportional to
its fair market value.
"SPECIFIED REDEMPTION DATE" means the first business day that is at least
five (5) business days after the receipt by the General Partner of the Notice of
Redemption.
"SUBMISSION DATE" has the meaning provided in Section 12.2(d)(ii)(5)
hereof.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, or other entity of which a majority of
(i) the voting power of the voting equity securities or (ii) the outstanding
equity interests is owned, directly or indirectly, by such Person.
"SUBSTITUTE LIMITED PARTNER" means any Person admitted to the Partnership
as a Limited Partner pursuant to Section 9.3 hereof.
"TRADING DAY" has the meaning provided in Section 12.2(c) hereof.
"TRIGGERING EVENT" has the meaning provided in Section 12.1 hereof.
8
"TRIGGERING OCCURRENCE" has the meaning provided in Section 12.2 hereof.
"UNREALIZED GAIN" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (i) the fair market
value of such property (as determined under Section 3.4 hereof) as of such date,
over (ii) the Carrying Value of such property (prior to any adjustment to be
made pursuant to Section 3.4 hereof) as of such date.
"UNREALIZED LOSS" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (i) the Carrying Value
of such Property (prior to any adjustment to be made pursuant to Section 3.4
hereof) as of such date, over (ii) the fair market value of such Property (as
determined under Section 3.4 hereof) as of such date.
ARTICLE 1
ORGANIZATIONAL MATTERS
1.1 CONTINUATION. The Partners hereby agree to continue the Partnership
pursuant to the Act and upon the terms and conditions set forth in this
Agreement.
1.2 APPLICATION OF THE ACT. The Partnership is a limited partnership
organized and existing pursuant to the provisions of the Act and upon the terms
and conditions set forth in this Agreement. Except as expressly provided herein
to the contrary, the rights and obligations of the Partners and the
administration and termination of the Partnership shall be governed by the Act.
No Partner has any interest in any Partnership property, and the Partnership
Interest of each Partner shall be personal property for all purposes.
1.3 PURPOSE AND BUSINESS. The purpose and nature of the business to be
conducted by the Partnership is (i) to conduct any business that may be lawfully
conducted by a limited partnership organized pursuant to the Act, provided,
however, that such business shall qualify and be limited to and conducted in
such a manner as to permit the General Partner at all times to be classified as
a REIT, unless the General Partner ceases to qualify as a REIT, (ii) to enter
into any partnership, joint venture or other similar arrangement to engage in
any of the foregoing or the ownership of interests in any entity engaged in any
of the foregoing and (iii) to do anything necessary or incidental to the
foregoing.
1.4 POWERS. The Partnership shall be empowered to do any and all acts
and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and business
described herein and for the protection and benefit of the Partnership;
provided, however, that the Partnership shall not take, or refrain from taking,
any action which, in the judgment of the General Partner, (i) could adversely
affect the ability of the General Partner to continue to qualify as a REIT,
unless the General Partner provides notice to the Partnership that it intends to
cease or has ceased to qualify as a REIT, (ii) could subject the General Partner
to any additional taxes under Section 857 or Section 4981 of the Code, or (iii)
could violate any law or regulation of any governmental body or agency having
jurisdiction over the General Partner or its securities, unless such action (or
inaction) shall have been specifically consented to by the General Partner in
writing.
1.5 NAME, OFFICE AND REGISTERED AGENT. The name of the Partnership
shall be Mid-America Apartments, L.P. The specified office and place of business
of the Partnership shall be 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxx
Xxxxxx, Xxxxxxxxx 00000. The General Partner may at any time change the location
of such office, provided the General Partner gives notice to the Partners of any
such change. The name and address of the Partnership's registered agent is
Xxxxxx X. Xxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxxxxxx 00000.
The sole duty of the registered agent as such is to forward to the Partnership
any notice that is served on him as registered agent.
1.6 PARTNERS.
(a) The General Partner of the Partnership is Mid-America Apartment
Communities, Inc. Its principal place of business shall be the same as that of
the Partnership. The Partnership Interest of the General Partner consists of
171,009 Class B Common Units. Moreover, the Partnership Interest of the General
Partner shall include
9
such Preferred Units owned by the General Partner from time to time as reflected
in the ownership records of the Partnership.
(b) The sole Class B Limited Partner is MAC II of Delaware, Inc., a
Delaware corporation which is a wholly owned subsidiary of the General Partner.
The Partnership Interest of the Class B Limited Partner as of the date hereof
consists of 14,402,053 Class B Common Units.
(c) The Class A Limited Partners consist of the Persons listed on
Schedule 2.6(c) hereof, each holding the number of Class A Common Units set
forth therein, which Schedule 2.6(c) shall be amended from time to time to
reflect (i) Class A Limited Partners duly admitted as Additional Limited
Partners pursuant to Section 3.2 hereof, (ii) Class A Limited Partners duly
admitted as Substitute Limited Partners pursuant to Section 9.3 hereof, and
(iii) increases and decreases in the number of Class A Common Units owned by the
Class A Limited Partners.
1.7 TERM. The term of the Partnership shall continue in full force and
effect until December 31, 2053, unless it shall be dissolved sooner pursuant to
the provisions of Article 13 or as otherwise provided by law.
1.8 FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP. The
General Partner shall execute, acknowledge, record and file, at the expense of
the Partnership, the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.
ARTICLE 2
CAPITAL CONTRIBUTIONS AND ACCOUNTS
2.1 CAPITAL CONTRIBUTIONS. As of the date hereof, the Partners have
made Capital Contributions in exchange for the Units described in Section 2.4
above, and the General Partner has determined that all such Units are fully paid
and nonassessable. The General Partner and any Subsidiary thereof may contribute
cash and/or property to the capital of the Partnership at such times, in such
amounts and in such manner as it may from time to time to elect, and may receive
additional Class B Common Units in exchange therefor. In addition thereto, the
General Partner may make additional capital contributions in exchange for
Preferred Units designated in accordance with Section 3.2(b) hereof.
2.2 ADMISSION OF ADDITIONAL LIMITED PARTNERS.
(a) The General Partner is hereby authorized to cause the Partnership
to admit such additional Limited Partners and/or to issue such additional
Limited Partnership Interests in the form of Class A Common Units for any
Partnership purpose at any time or from time to time, to the Partners or to
other Persons for such consideration, which may include cash and/or Property,
and on such terms and conditions as shall be established by the General Partner
in its sole and absolute discretion, all without the approval of any Limited
Partner. In causing the Partnership to issue additional Limited Partnership
Interests, the General Partner shall make a good faith determination that the
Partnership will receive adequate consideration therefor. The General Partner's
determination that consideration is adequate shall be conclusive insofar as the
adequacy of consideration relates to whether the Limited Partnership Interests
are validly issued, fully paid and nonassessable. Except for any Preferred Units
issued pursuant to Section 3.2(b) hereof, any Partnership Interest acquired by
the Class B Limited Partner, the General Partner or any Affiliate of such
Partners shall be Class B Common Units or, if originally Class A Common Units,
shall be converted to Class B Common Units at the time of acquisition.
(b) The Partnership also may from time to time issue Preferred Units in
one or more classes, or one or more series of any of such classes, with such
designations, preferences and relative, participating, optional or other special
rights, powers and duties, including rights, powers and duties senior to then
existing or later issued Limited Partnership Interests, all as shall be
determined by the General Partner, subject to
Tennessee law. Without limiting
the generality of the foregoing sentence, the General Partner shall, in its sole
discretion, with respect to such Preferred Units, establish and fix, (i) the
allocations of items of Partnership income, gain, loss, deduction and credit to
each such class or series of Partnership Interest; (ii) the right of each such
class or series of Partnership Interest to share in Partnership distributions;
and (iii) the rights of each such class or series of Partnership Interest upon
10
dissolution and liquidation of the Partnership, provided that, in any event (x)
the additional Partnership Interests are issued in connection with an issuance
of shares of the General Partner, which shares have designations, preferences
and other rights, all such that the economic interests are substantially similar
to the designations, preferences and other rights of the additional Partnership
Interests issued to the General Partner in accordance with this Section 4.2(b),
and (y) the General Partner shall make a Capital Contribution to the Partnership
in an amount equal to the net proceeds raised in connection with the issuance of
such shares of the General Partner. Attached hereto as Schedules 4.2(b)(1) and
4.2(b)(2) to this Agreement are the designations of the Partnership's 9.5%
Series A Cumulative Preferred Units and 8 7/8% Series B Cumulative Preferred
Units. Subsequent designations of Preferred Units shall be reflected in
schedules attached to this Agreement in like manner.
(c) Nothing contained herein shall restrict the General Partner's right
to issue additional REIT Shares; provided, however, that in the event that REIT
Shares are issued by the General Partner to finance an investment in an
apartment community or other property by the Partnership, (i) the General
Partner shall cause the Partnership to issue to the General Partner or its
designee an equivalent number of Class B Common Units or rights, options,
warrants or convertible or exchangeable securities of the Partnership having
designations, preferences and other rights, all such that the economic interests
are substantially similar to those of the REIT Shares so issued, and (ii) the
General Partner shall contribute to the Partnership the net proceeds from the
offering of such REIT Shares and from the exercise of rights contained in such
REIT Shares.
2.3 NO PREEMPTIVE RIGHTS. No Person shall have any preemptive,
preferential or other similar right with respect to (i) additional Capital
Contributions or loans to the Partnership or (ii) issuance or sale of any
Partnership Interests.
2.4 CAPITAL ACCOUNTS OF THE PARTNERS.
(a) GENERAL. The Partnership shall maintain for each Partner a separate
Capital Account in accordance with the rules of Regulations Section
1.704-l(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions made by such Partner to the Partnership pursuant to
this Agreement and (ii) all items of Partnership income and gain (including
income and gain exempt from tax) allocated to such Partner pursuant to Sections
5.1 and 5.2 of this Agreement, and decreased by (x) the amount of cash or Agreed
Value of all actual and deemed distributions of cash or property made to such
Partner pursuant to this Agreement and (y) all items of Partnership deduction
and loss allocated to such Partner pursuant to Sections 5.1 and 5.2 of this
Agreement.
(b) TRANSFERS OF PARTNERSHIP UNITS. A transferee of a Partnership
Interest shall succeed to a pro rata portion of the Capital Account of the
transferor.
(c) UNREALIZED GAINS AND LOSSES.
(i) Consistent with the provisions of Regulations
Section 1.704-l(b)(2)(iv)(f), and as provided in Section 3.4(c)(ii), the
Carrying Values of all Partnership assets shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable to
such Partnership property, as of the times of the adjustments provided in
Section 3.4(c)(ii) hereof, as if such Unrealized Gain or Unrealized Loss
had been recognized on an actual sale of each such property and allocated
pursuant to Section 5.1 of the Agreement.
(ii) Such adjustments shall be made as of the following times:
(i) immediately prior to the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a de
minimis Capital Contribution; (ii) immediately prior to the distribution by
the Partnership to a Partner of more than a de minimis amount of Property
as consideration for an interest in the Partnership; and (iii) immediately
prior to the liquidation of the Partnership or the General Partner's
interest in the Partnership within the meaning of Regulations Section
1.704-l(b)(2)(ii)(g); PROVIDED, HOWEVER, that adjustments pursuant to
clauses (i) and (ii) above shall be made only if the General Partner
determines such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership.
11
(iii) In accordance with Regulations Section 1.704-l(b)(2)
(iv)(e), the Carrying Value of Partnership assets distributed in kind shall
be adjusted upward or downward to reflect any Unrealized Gain or Unrealized
Loss attributable to such Partnership property, as of the time any such
asset is distributed.
(iv) In determining such Unrealized Gain or Unrealized Loss the
aggregate cash amount and fair market value of all Partnership assets
(including cash or cash equivalents) shall be determined by the General
Partner using such reasonable method of valuation as it may adopt, or in
the case of a liquidating distribution pursuant to Article 13 of this
Agreement, be determined and allocated by the Liquidator using such
reasonable methods of valuation as it may adopt. The General Partner, or
the Liquidator, as the case may be, shall allocate such aggregate value
among the assets of the Partnership (in such manner as it determines to
arrive at fair market value for individual properties).
(d) MODIFICATION BY GENERAL PARTNER. The provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Regulations. In the event the General Partner shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating to liabilities which are secured by contributed or distributed
property or which are assumed by the Partnership, the General Partner, or any
Limited Partners), are computed in order to comply with such Regulations, the
General Partner may make such modification without regard to Article 11 of this
Agreement. The General Partner also shall (i) make any adjustments that are
necessary or appropriate to maintain equality between the Capital Accounts of
the Partners and the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in accordance with
Regulations Section 1.704-l(b)(2)(iv)(q), and (ii) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-l(b).
(e) ADDITIONAL CAPITAL CONTRIBUTIONS OR ASSESSMENTS. No Partner shall
be assessed or be required to contribute additional funds or other property to
the Partnership, except for any such amount which a Limited Partner may be
obligated to repay under Section 4.3 or Section 13.4. Any additional funds
required by the Partnership, as determined by the General Partner in its
reasonable business judgment, may, at the option of the General Partner and
without an obligation to do so, be contributed by the General Partner as
additional Capital Contributions. If and as the General Partner or any other
Partner makes additional Capital Contributions to the Partnership, each such
Partner shall receive Preferred Units, Class A Common Units, Class B Common
Units, or other appropriate Partnership Interests, subject to the provisions of
Section 3.2, and such Partner's Capital Account shall be adjusted as provided in
Section 3.4.
(f) RETURN OF CAPITAL CONTRIBUTIONS. Except as otherwise expressly
provided herein, the Capital Contribution of each Partner shall be returned to
that Partner only in the manner and to the extent provided in Article 4 and
Article 13 hereof, and no Partner may withdraw from the Partnership or otherwise
have any right to demand or receive the return of its Capital Contribution to
the Partnership (as such), except as specifically provided herein. Under
circumstances requiring a return of any Capital Contribution, no Partner shall
have the right to receive property other than cash, except as specifically
provided herein. No Partner shall be entitled to interest on any Capital
Contribution or Capital Account notwithstanding any disproportion therein as
between the Partners. Except as specifically provided herein, the General
Partner shall not be liable for the return of any portion of the Capital
Contribution of any Limited Partner, and the return of such Capital Contribution
shall be made solely from Partnership assets. The General Partner may, but shall
not be obligated to, make Capital Contributions for the purpose of enabling the
Partnership to make distributions of Available Cash to Limited Partners.
(g) LIABILITY OF LIMITED PARTNERS. No Limited Partner shall have any
further personal liability to contribute money to, or in respect of, the
liabilities or the obligations of the Partnership, nor shall any Limited Partner
be personally liable for any obligation of the Partnership, except as otherwise
provided herein.
12
ARTICLE 3
DISTRIBUTIONS
3.1 REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS.
(a) The General Partner shall cause the Partnership to distribute, when
and as declared by the General Partner out of funds legally available for the
payment thereof, preferential distributions ("Preferred Unit Distributions") in
respect of all series of Preferred Units of the Partnership in the aggregate
amount of dividends and other distributions in respect of the related preferred
stock (provided the net proceeds from the issuance of such preferred stock shall
have theretofore been contributed to the Partnership) paid by the General
Partner to holders of such preferred stock, contemporaneous with the payment of
such preferred stock dividends and other distributions.
(b) The General Partner shall cause the Partnership to distribute
quarterly an amount equal to 100% of Available Cash generated by the Partnership
during such quarter to the Partners who are Partners on the Partnership Record
Date with respect to such quarter as follows:
(i) First, one hundred percent (100%) to the Partners who shall
own Class A Common Units, pro rata based on the number of Class A Common
Units held by each such Partner on the applicable Partnership Record Date,
until each has received an amount equal to the Priority Distribution Amount
for the quarter for each such Unit;
(ii) Next, if any Partners holding Class A Common Units have a
positive Cumulative Unpaid Priority Distribution Account, one hundred
percent (100%) to such Partners, pro rata based on the relative amounts of
their Cumulative Unpaid Priority Distribution Accounts, until each such
Cumulative Unpaid Priority Distribution Account reaches zero; and
(iii) Thereafter, to the General Partner and any other holders of
Class B Common Units, pro rata in accordance with the relative number of
Class B Common Units held by each.
(c) The General Partner shall distribute Capital Transaction Proceeds
received by the Partnership within 30 days after the date of such Capital
Transaction provided that the General Partner has given the Limited Partners 20
days' prior written notice of the date for any such distribution, as follows:
(i) First, if any Limited Partners have a positive Cumulative
Unpaid Priority Distribution Account, one hundred percent (100%) to such
Limited Partners, pro rata based on the relative amounts of their
Cumulative Unpaid Priority Distribution Accounts, until each such
Cumulative Unpaid Priority Distribution Account reaches zero: and
(ii) Thereafter, to the General Partner and any other holders of
Class B Units, pro rata in accordance with the relative number of Class B
Units held by each.
3.2 AMOUNTS WITHHELD. All amounts withheld pursuant to the Code or any
provisions of any state or local tax law and Section 4.3 hereof with respect to
any allocation, payment or distribution to the General Partner, or any Limited
Partners or assignees shall be promptly paid, solely out of funds of the
Partnership (except as otherwise provided in Section 4.3 in connection with the
exercise by a Limited Partner of a Redemption Right), by the General Partner to
the appropriate taxing authority and treated as amounts distributed to the
General Partner or such Limited Partners or assignees pursuant to Section 4.1
for all purposes under this Agreement.
3.3 WITHHOLDING. Each Limited Partner hereby authorizes the Partnership
to withhold from or pay on behalf of or with respect to such Limited Partner any
amount of federal, state, local, or foreign taxes that the General Partner
determines that the Partnership is required to withhold or pay with respect to
any amount distributable or allocable to such Limited Partner pursuant to this
Agreement or with respect to the exercise by such Limited Partner of the
Redemption Rights set forth in Section 8.5, including, without limitation, any
taxes required to be withheld or paid by the Partnership pursuant to Section
1441, 1442, 1445, or 1446 of the Code. Any amount paid on behalf of
13
or with respect to a Limited Partner shall constitute a loan by the Partnership
to such Limited Partner, which loan shall be repaid by such Limited Partner
within 15 days after notice from the General Partner that such payment must be
made unless (i) the Partnership withholds such payment from a distribution which
would otherwise be made to the Limited Partner or (ii) the General Partner
determines, in its sole and absolute discretion, that such payment may be
satisfied out of the available funds of the Partnership which would, but for
such payment, be distributed to the Limited Partner. Any amounts withheld
pursuant to the foregoing clauses (i) or (ii) shall be treated as having been
distributed to such Limited Partner and shall be promptly paid, solely out of
funds of the Partnership, by the General Partner to the appropriate taxing
authority. Each Limited Partner hereby unconditionally and irrevocably grants to
the Partnership a security interest in such Limited Partner's Partnership
Interest as to secure such Limited Partner's obligation to pay to the
Partnership any amounts required to be paid pursuant to this Section 4.3
(together with attorney's fees and other costs in enforcing the Partnership's
rights against the collateral). In the event that a Limited Partner or Redeeming
Partner fails to pay any amounts owed to the Partnership pursuant to this
Section 4.3 when due, the General Partner may, in its sole and absolute
discretion., elect to make the payment on behalf of such defaulting Partner, and
in such event shall be deemed to have loaned such amount to such defaulting
Partner and shall succeed to all rights and remedies of the Partnership as
against such defaulting Partner (including, without limitation, in the case of a
default by other than a Redeeming Partner the right to receive distributions
from the Partnership). Any amounts payable by a Limited Partner or a Redeeming
Partner hereunder shall bear interest at the Prime Rate, plus two percentage
points (but not higher than the maximum lawful rate) from the date such amount
is due (I.E., 15 days after demand) until such amount is paid in full. In the
event that the Partnership or the General Partner is required to withhold tax
with respect to the exercise by a Limited Partner of a Redemption Right, the
Limited Partner exercising the Redemption Right shall make arrangements with the
Partnership or the General Partner, as the case may be, to provide the funds to
the Partnership necessary to effect the required withholding. In the event that,
pursuant to applicable laws and regulations, the General Partner may withhold a
reduced amount pending a determination by applicable taxing authorities as to
whether any additional withholding tax must subsequently be deposited, the
General Partner shall have the right to require the Redeeming Partner to pledge
a first priority security interest in a portion of the Redemption Amount as
collateral for the Redeeming Partner's obligation to provide the funds necessary
to effect any subsequent required holding (together with attorney's fees and
other costs in enforcing the Partnership's rights against the collateral), in an
amount in the case of a REIT Shares Amount equal to REIT Shares having an
Average Trading Price on the date of the pledge equal to 125% of the maximum
possible subsequent required withholding (or 100% of the maximum possible
subsequent required withholding if the Redemption Amount is paid in the form of
the Cash Amount) (the "WITHHOLDING COLLATERAL"). The General Partner shall be
entitled to retain possession of the Withholding Collateral until either the
Redeeming Partner provides funds to the General Partner sufficient to make any
subsequent required withholding deposit or the General Partner receives a
determination from the applicable authorities that no subsequent withholding is
required. All dividends, distributions, interest or other income on the
Withholding Collateral while subject to the pledge hereunder shall be paid to
the Redeeming Partner pledging the Withholding Collateral. If the applicable
authorities advise that subsequent withholding is required and the Redeeming
Partner does not deliver the necessary funds to the General Partner within 20
days after receipt of the General Partner's request therefor, the General
Partner shall be entitled to exercise all rights and remedies of a secured party
under the Uniform Commercial Code in the State of
Tennessee with respect to the
Withholding Collateral. Each Limited Partner and each Redeeming Partner shall
take such actions as the Partnership or the General Partner shall request in
order to perfect or enforce the security interest created hereunder.
3.4 DISTRIBUTIONS UPON LIQUIDATION. Notwithstanding anything contained
in Section 4.1 to the contrary, proceeds from a Liquidating Transaction shall be
distributed to the Partners in accordance with Section 13.2.
3.5 REIT DISTRIBUTION REQUIREMENTS. Unless the General Partner
determines that such a distribution would not be in the best interests of the
Partnership, it is the intent, but not the obligation, of the Partnership that a
cash distribution shall be made for each Partnership Year of the Partnership to
enable the General Partner (i) to meet its distribution requirement for
qualification as a REIT as set forth in Section 857(a)(1) of the Code and (ii)
to avoid the excise tax imposed by Section 4981 of the Code.
14
ARTICLE 4
ALLOCATIONS
4.1 ALLOCATIONS OF NET INCOME AND NET LOSS. For purposes of maintaining
the Capital Accounts and in determining the rights of the Partners among
themselves, the Partnership's Net Income and Net Loss shall be allocated among
the Partners for each taxable year (or portion thereof) as provided herein
below.
(a) SPECIAL ALLOCATIONS OF GROSS INCOME.
(i) GROSS INCOME ALLOCATION TO PREFERRED UNITHOLDERS. Prior to
giving effect to any other allocation in Section 5.1(a) or (b), gross
income of the Partnership shall be allocated first to the holders of
Preferred Units in an amount equal to the excess (if any) of (i) the
cumulative distributions in respect of all classes of Preferred Units made
through the end of the taxable year for which such allocation shall be made
(other than distributions which are treated as being in satisfaction of the
liquidation preference of such Preferred Units), over (ii) the cumulative
allocations of gross income to the holders of such Preferred Units pursuant
to this Section 5.1(a) prior to such allocation for such taxable year.
(ii) GROSS INCOME ALLOCATION TO CLASS A COMMON UNITHOLDERS. In
the event of a sale by the Partnership of all or substantially all of the
Property and assets of the Partnership, prior to giving effect to any other
allocation in Section 5.1(a) or (b), gross income and gain from such sale
shall be allocated to the Class A Limited Partners in an amount equal to
the excess (if any) of (x) the cumulative distributions from the
Partnership to such Class A Limited Partners pursuant to Article 4 and
Section 13.2(a)(iii), over (y) the cumulative allocations of Net Income to
such Class A Limited Partners pursuant to Section 5.1(b)(vi) and (vii), pro
rata based on the number of Class A Common Units owned by each Class A
Limited Partner over the aggregate Class A Common Units outstanding at such
time.
(b) NET INCOME. After giving effect to the special allocations set
forth in Section 5.2 below, Net Income, if any (and each item thereof), shall be
allocated among the Partners as follows:
(i) First, to the General Partner until the cumulative
allocations of Net Income under this Section 5.1(b)(i) shall equal the
cumulative Net Losses allocated to the General Partner under Section 5.1(d)
hereof;
(ii) Second, to the Limited Partners until the cumulative
allocations of Net Income under this Section 5.1(b)(ii) shall equal the
cumulative Net Losses allocated to the Limited Partners under Section
5.1(d) hereof (such allocations of Net Income being made in the same
proportions and in the reverse order in which such allocations of Net
Losses were made);
(iii) Third, to the Class A Limited Partners until the cumulative
allocations of Net Income under this Section 5.1(b)(iii) shall equal the
cumulative allocations of Net Losses to the Class A Limited Partners under
Section 5.1(c)(iii);
(iv) Fourth, to the holders of Preferred Units until the
cumulative allocations of Net Income under this Section 5.1(b)(iv) shall
equal the cumulative allocations of Net Losses to such holders under
Section 5.1(c)(ii);
(v) Fifth, to the Partners until the cumulative allocations of
Net Income under this Section 5.1(b)(v) shall equal the cumulative
allocations of Net Losses thereto under Section 5.1(c)(ii);
(vi) Sixth, to the Partners until the cumulative allocations of
Net Income under this Section 5.1(b)(vi) and Section 5.1(b)(vii) shall
equal the cumulative distributions to the Partners under Article 4 (other
than Section 4.1(a) thereof) and Section 13.2(a)(iii), with such
allocations being made in proportion to the cumulative distributions to
each Partner; and
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(vii) Seventh, to the General Partner and any other holder of
Class B Common Units in proportion to their Percentage Interests in such
Class B Common Units.
(c) NET LOSSES. After giving effect to the special allocations set
forth in Section 5.2 below, Net Losses, if any (and each item thereof), shall be
allocated as follows:
(i) First, to the Partners in proportion to and to the extent
of their positive Adjusted Capital Accounts (reduced, in the case of a
holder of Preferred Units, by the unpaid liquidation preference in respect
of such Preferred Units);
(ii) Second, to the holders of Preferred Units to the extent of
their positive Adjusted Capital Accounts; and
(iii) Third, to the Class A Limited Partners who shall have a
Deficit Restoration Obligation, in proportion to their respective
Percentage Interests in Common Units.
(d) NET LOSS LIMITATION. Notwithstanding the foregoing, Net Losses
shall not be allocated to any Limited Partner pursuant to Section 5.1(c) to the
extent that such allocation would cause such Limited Partner to have an Adjusted
Capital Account Deficit at the end of such taxable year (or increase any
existing Adjusted Capital Account Deficit). All Net Losses in excess of the
limitation set forth in the preceding sentence of this Section 5.1(d) shall be
allocated to the other Limited Partners for whom such allocation would not cause
or increase an Adjusted Capital Account Deficit (such allocation being pro rata
in proportion to such Limited Partners' respective Percentage Interests in
Common Units), and so on, until no Net Losses can be allocated under this
Section 5.1(d) to any Limited Partner, and all remaining Net Losses shall be
allocated to the General Partner.
(e) NONRECOURSE LIABILITIES. The Partners agree that excess Nonrecourse
Liabilities of the Partnership (within the meaning of Section 1.752-3(a)(3) of
the Regulations) will be allocated among the Partners for purposes of Section
752 of the Code in accordance with their respective Percentage Interests in
Common Units.
(f) GAINS. Any gain allocated to the Partners upon the sale or other
taxable disposition of any Partnership asset shall to the extent possible, after
taking into account other required allocations of gain pursuant to Section 5.2
below, be characterized as Recapture Income in the same proportions and to the
same extent as such Partners have been allocated any deductions directly or
indirectly giving rise to the treatment of such gains as Recapture Income.
4.2 SPECIAL ALLOCATION RULES. Notwithstanding any other provision of
the Agreement, the following special allocations shall be made in the following
order:
(a) MINIMUM GAIN CHARGEBACK. Notwithstanding any other provisions of
Article 5, if there is a net decrease in Partnership Minimum Gain during any
Partnership Year, each Partner shall be specially allocated items of Partnership
income and gain for such year (and, if necessary, subsequent years) in an amount
equal to such Partner's share of the net decrease in Partnership Minimum Gain,
as determined under Regulations Section 1.704-2(g). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required
to be allocated to each Partner pursuant thereto. The items to be so allocated
shall be determined in accordance with Regulations Section 1.704-2(f)(6). This
Section 5.2(a) is intended to comply with the minimum gain chargeback
requirements in Regulations Section 1.704-2(f) and for purposes of this Section
5.2(a) only, each Partner's Adjusted Capital Account Deficit shall be determined
prior to any other allocations pursuant to Section 5.1 of the Agreement with
respect to such Partnership Year and without regard to any decrease in Partner
Minimum Gain during such Partnership Year.
(b) PARTNER MINIMUM GAIN CHARGEBACK. Notwithstanding any other
provision of Article 5 (except Section 5.2(a) hereof), if there is a net
decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt
during any Partnership Year, each Partner who has a share of the Partner Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in accordance
with Regulations Section 1.704-2(i)(5), shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent years)
in an amount equal to such
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Partner's share of the net decrease in Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Regulations Section 1.701-2(i)(4). This Section 5.2(b) is intended to
comply with the minimum gain chargeback requirement in such Section of the
Regulations and shall be interpreted consistently therewith. Solely for purposes
of this Section 5.2(b), each Partner's Adjusted Capital Account Deficit shall be
determined prior to any other allocations pursuant to Article 5 of this
Agreement with respect to such Partnership Year, other than allocations pursuant
to Section 5.2(a) hereof.
(c) QUALIFIED INCOME OFFSET. In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in Regulations
Sections 1.704-l(b)(2)(ii)(d)(4), 1.701-1(b)(2)(ii)(d)(5), or
1.704-l(b)(2)(ii)(d)(6), and after giving effect to the allocations required
under Sections 5.2(a) and 5.2(b) hereof, such Partner has an Adjusted Capital
Account Deficit, items of Partnership income and gain shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate, to
the extent required by the Regulations, its Adjusted Capital Account Deficit
created by such adjustments, allocations or distributions as quickly as
possible.
(d) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any taxable
period shall be allocated to the Partners in accordance with their respective
Percentage Interests in Common Units.
(e) PARTNER NONRECOURSE DEDUCTIONS. Any Partner Nonrecourse Deductions
for any Partnership Year shall be specially allocated to the Partner who bears
the economic risk of loss with respect to the Partner Nonrecourse Debt to which
such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i)(2).
(f) CODE SECTION 754 ADJUSTMENTS. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b)
of the Code is required, pursuant to Regulations Section 1.704-l(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such item of gain or loss shall be specially
allocated to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of the
Regulations.
4.3 ALLOCATIONS FOR TAX PURPOSES.
(a) GENERAL. Except as otherwise provided in this Section 5.3, for
federal income tax purposes, each item of income, gain, loss and deduction shall
be allocated among the Partners in the same manner as its correlative item of
"book" income, gain loss or deduction is allocated pursuant to Sections 5.1 and
5.2 of this Agreement.
(b) TO ELIMINATE BOOK-TAX DISPARITIES. In an attempt to eliminate
Book-Tax Disparities attributable to a Contributed Property or Adjusted
Property, items of income, gain, loss, and deduction shall be allocated for
federal income tax purposes among the Partners as follows:
(i) To the extent that the fair market value of a Contributed
Property differed from its adjusted tax basis at the time it was originally
contributed to a partnership to which the Partnership shall have succeeded
to the assets (the "Original Book-Tax Disparity"), the allocation of tax
items with respect to such Contributed Property shall take into account any
remaining Original Book-Tax Disparity at the time such property is
contributed to the Partnership in a manner consistent with the principles
of Section 704(c) of the Code, using the "traditional method" under Section
1.704-3(b) of the Regulations, so that the Class A Limited Partners who
shall have contributed Property to the Partnership (or their
successors-in-interest) bear the tax burden (or benefit, if applicable) of
the remaining Original Book-Tax Disparity;
(ii) In the case of a Contributed Property, such items
attributable thereto shall be allocated, subject to Section 5.3(b)(i),
among the Partners consistent with the principles of Section 704(c) of the
Code that takes into account the variation between the 704(c) Value of such
property and its adjusted tax basis at the time of the contribution;
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(iii) In the case of an Adjusted Property, such items shall (A)
first, be allocated among the Partners in a manner consistent with the
principles of Section 704(c) of the Code to take into account the
Unrealized Gain or Unrealized Loss attributable to such property (prior to
any adjustments in the Carrying Value of such property under Section 3.4
hereof) and (B) second, in the event such property was originally a
Contributed Property, be allocated among the Partners consistent with
Section 5.3(b)(ii); and
(iv) All other items of income, gain, loss and deduction shall
be allocated among the Partners in the same manner as their correlative
item of "book" gain or loss is allocated pursuant to Sections 5.1 and 5.2
of this Agreement.
(c) POWER OF GENERAL PARTNER TO ELECT METHOD. The General Partner shall
elect the traditional method without curative allocations to be used by the
Partnership in eliminating Book-Tax Disparities under Section 704(c) of the Code
and the Regulations thereunder and such election shall be binding on all
Partners.
4.4 NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner shall be entitled to
demand property other than cash in connection with any distributions by the
Partnership.
4.5 LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS. Notwithstanding any
of the provisions of this Article 5, no Partner shall have the right to receive,
and the General Partner shall not have the right to make, a distribution which
includes a return of all or part of a Partner's Capital Contributions, unless
after giving effect to the return of a Capital Contribution, all Partnership
liabilities, other than the liabilities to a Partner for the return of his
Capital Contribution, do not exceed the fair market value of the Partnership's
assets.
4.6 SUBSTANTIAL ECONOMIC EFFECT. It is the intent of the Partners that
the allocations of Net Income and Net Loss under the Agreement have substantial
economic effect (or be consistent with the Partners' interests in the
Partnership in the case of the allocation of losses attributable to nonrecourse
debt) within the meaning of Section 704(b) of the Code as interpreted by the
Regulations promulgated pursuant thereto. Article 5 and other relevant
provisions of this Agreement shall be interpreted in a manner consistent with
such intent.
ARTICLE 5
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
5.1 MANAGEMENT OF THE PARTNERSHIP.
Except as otherwise expressly provided in this Agreement, the General Partner
shall have full, complete and exclusive discretion to manage and control the
business of the Partnership for the purposes herein stated, and shall make all
decisions affecting the business and assets of the Partnership. Subject to the
restrictions specifically contained in this Agreement, the powers of the General
Partner shall include, without limitation, the authority to take the following
actions on behalf of the Partnership:
(i) to acquire, purchase, own, lease and dispose of any real
property and any other property or assets that the General Partner
determines are necessary or appropriate or in the best interests of the
business of the Partnership;
(ii) to construct buildings and make other improvements on the
properties owned or leased by the Partnership;
(iii) to borrow money for the Partnership, issue evidences of
indebtedness in connection therewith, refinance, guarantee, increase the
amount of, modify, amend or change the terms of, or extend the time for the
payment of, any indebtedness or obligation to the Partnership, and secure
such indebtedness by mortgage, deed of trust, pledge or other lien on the
Partnership's assets;
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(iv) to pay, either directly or by reimbursement, for all
operating costs and general administrative expenses of the Partnership, to
third parties or, to the General Partner as set forth in this Agreement;
(v) to lease all or any portion of any of the Partnership's
assets, whether or not the terms of such leases extend beyond the
termination date of the Partnership and whether or not any portion of the
Partnership's assets so leased are to be occupied by the lessee, or, in
turn, subleased in whole or in part to others, for such consideration and
on such terms as the General Partner may determine;
(vi) to prosecute, defend, arbitrate, or compromise any and all
claims or liabilities in favor of or against the Partnership, on such terms
and in such manner as the General Partner may reasonably determine, and
similarly to prosecute, settle or defend litigation with respect to the
Partners, the Partnership, or the Partnership's assets; PROVIDED, HOWEVER,
that the General Partner may not, without the consent of all of the
Partners, confess a judgment against the Partnership;
(vii) to file applications, communicate, and otherwise deal with
any and all governmental agencies having jurisdiction over, or in any way
affecting, the Partnership's assets or any other aspect of the Partnership
business;
(viii) to make or revoke any election permitted or required of the
Partnership by any taxing authority;
(ix) to maintain such insurance coverage for public liability,
fire and casualty, and any and all other insurance for the protection of
the Partnership, for the conservation of Partnership assets, or for any
other purpose convenient or beneficial to the Partnership, in such amounts
and such types, as it shall determine from time to time;
(x) to determine whether or not to apply any insurance proceeds
for any property, to the restoration of such property or to distribute the
same;
(xi) to retain legal counsel, accountants, consultants, real
estate brokers, and such other persons, as the General Partner may deem
necessary or appropriate in connection with the Partnership business and to
pay therefor such reasonable remuneration as the General Partner may deem
reasonable and proper;
(xii) to retain other services of any kind or nature in
connection with the Partnership business, and to pay therefor such
remuneration as the General Partner may deem reasonable and proper;
(xiii) to negotiate and conclude agreements on behalf of the
Partnership with respect to any of the rights, powers and authority
conferred upon the General Partner;
(xiv) to maintain accurate accounting records and to file
promptly all federal, state and local income tax returns on behalf of the
Partnership;
(xv) to distribute Partnership cash or other Partnership assets
in accordance with this Agreement;
(xvi) to form or acquire an interest in, and contribute property
to, any further limited or general partnerships, joint ventures or other
relationships that it deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of property to, its
Subsidiaries and any other Person in which it has an equity interest from
time to time);
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(xvii) to establish Partnership working capital reserves;
(xviii) to take such other action, execute, acknowledge, swear to
or deliver such other documents and instruments, and perform any and all
other acts the General Partner deems necessary or appropriate for the
formation, continuation and conduct of the business and affairs of the
Partnership and to possess and enjoy all of the rights and powers of a
general partner as provided by the Act; and
(xix) to execute and deliver or assume any note and mortgage
securing any loan insured by the Federal Home Administration (the "FHA"),
the U.S. Department of Housing and Urban Development ("HUD") or any other
public body (individually, an "Agency" and, collectively, "Agencies") over
which the Secretary of Housing and Urban Development (the "Secretary") has
oversight responsibility, and to execute any Regulatory Agreement and other
documents required by the Secretary or any Agency in connection with any
such loan. Any successor or substitute general partner or person duly
admitted as an additional general partner of the Partnership shall, as a
condition precedent to receiving an interest as a general partner in the
Partnership, agree to be bound by the terms and conditions of any note,
mortgage and/or Regulatory Agreement and other documents and instruments
required in connection with any FHA, HUD or other Agency insured loan to
the same extent and on the same terms and conditions as all other general
partners. Upon any dissolution of the Partnership, no title or right to
possession and control of any property subject to any FHA, HUD or Agency
insured loan, and no right to collect the rents therefrom, shall pass to
any person who is not bound by any Regulatory Agreement affecting such
property in a manner satisfactory to the Secretary or the appropriate
Agency.
5.2 RESTRICTION ON GENERAL PARTNER'S AUTHORITY. Without the consent of
all the Limited Partners, the General Partner may not:
(a) Take any action that would make it impossible to carry on the
ordinary business of the Partnership, except as otherwise provided in this
Agreement;
(b) Possess Partnership property for other than a Partnership purpose;
(c) Admit a Person as a Partner, except as otherwise provided in this
Agreement; or
(d) Perform any act that would subject a Limited Partner to liability
as a general partner.
5.3 DELEGATION OF AUTHORITY. The General Partner may delegate any or
all of its powers, rights and obligations hereunder, and may appoint, employ,
contract or otherwise deal with any Person for the transaction of the business
of the Partnership, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General Partner may
approve.
5.4 INDEMNIFICATION AND EXCULPATION OF INDEMNITEES.
(a) The Partnership shall indemnify an Indemnitee from and against any
and all losses, claims, damages, liabilities, joint or several, expenses
(including reasonable legal fees and expenses), judgments, fines, settlements,
and other amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that relate to
the operations of the Partnership as set forth in this Agreement in which any
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, unless it is established that: (i) the act or omission of the
Indemnitee was material to the matter giving rise to the proceeding and either
was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the Indemnitee actually received an improper personal benefit
in money, property or services; or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 6.4(a). The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 6.4(a). Any indemnification pursuant to this Section 6.4 shall be
made only out of the assets of the Partnership.
20
(b) The Partnership may reimburse an Indemnitee for reasonable expenses
incurred by an Indemnitee who is a party to a proceeding in advance of the final
disposition of the proceeding upon receipt by the Partnership of (i) a written
affirmation by the Indemnitee of the Indemnitee's good faith belief that the
standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 6.4 has been met, and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
(c) The indemnification provided by this Section 6.4 shall be in
addition to any other rights to which an Indemnitee or any other Person may be
entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity.
(d) The Partnership may purchase and maintain insurance, on behalf of
the Indemnitees and such other Persons as the General Partner shall determine,
against any liability that may be asserted against or expenses that may be
incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 6.4, the Partnership shall be deemed
to have requested an Indemnitee to serve as fiduciary of an employee benefit
plan whenever the performance by it of its duties to the Partnership also
imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 6.4; and actions taken
or omitted by the Indemnitee with respect to an employee benefit plan in the
performance of its duties for a purpose reasonably believed by it to be in the
interest of the participants and beneficiaries of the plan shall be deemed to be
for a purpose which is not opposed to the best interests of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 6.3 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.4 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
5.5 LIABILITY OF THE GENERAL PARTNER.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary damages to the
Partnership or any Partners for losses sustained or liabilities incurred as a
result of errors in judgment or of any act or omission if the General Partner
acted in good faith.
(b) The Limited Partners expressly acknowledge that the General Partner
is acting on behalf of the Partnership and the General Partner's shareholders
collectively, that, except as otherwise expressly provided herein, the General
Partner is under no obligation to consider the separate interests of the Limited
Partners (including, without limitation, the tax consequences to Limited
Partners) in deciding whether to cause the Partnership to take (or decline to
take) any actions, and that the General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred, or benefits not derived by
Limited Partners in connection with such decisions, provided that the General
Partner has acted in good faith.
(c) Subject to its obligations and duties as General Partner set forth
in Section 6.1 hereof, the General Partner may exercise any of the powers
granted to it under this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.
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(d) Notwithstanding any other provisions of this Agreement or the Act,
any action of the General Partner on behalf of the Partnership or any decision
of the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the good faith belief that such action or omission is necessary or
advisable in order (i) to protect the ability of the General Partner to continue
to qualify as a REIT or (ii) to prevent the General Partner from incurring any
taxes under Section 857 or Section 4981 of the Code, is expressly authorized
under this Agreement and is deemed approved by all of the Limited Partners.
(e) Any amendment, modification or repeal of this Section 6.5 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 6.5 as in effect immediately prior to such
amendment, modification or repeal with respect to matters occurring, in whole or
in part, prior to such amendment, modification or repeal, regardless of when
claims relating to such matters may arise or be asserted.
5.6 REIMBURSEMENT OF GENERAL PARTNER.
(a) Except as provided in this Section 6.6 and elsewhere in this
Agreement (including the provisions of Articles 4 and 5 regarding distributions,
payments, reimbursements and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.
(b) The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole and absolute
discretion, for all expenses it incurs relating to the ownership and operation
of, or for the benefit of, the Partnership. Such reimbursements shall be in
addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 6.4 hereof.
(c) The General Partner also shall be reimbursed for all expenses it
incurs relating to the organization of the Partnership and any issuance of
additional Partnership Interests pursuant to Section 3.2.
5.7 OUTSIDE ACTIVITIES.
(a) Subject to the Charter and any agreements entered into by the
General Partner or its Affiliates with the Partnership or a Subsidiary, the
General Partner and any officer, director, employee, agent, trustee, Affiliate
or shareholder of the General Partner shall be entitled to and may have business
interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities substantially similar
or identical to those of the Partnership. Neither the Partnership nor any of the
Limited Partners shall have any rights by virtue of this Agreement in any
business ventures of the General Partner. None of the Limited Partners nor any
other Person shall have any rights by virtue of this Agreement or the
partnership relationship established hereby in any such business interests or
activities of the General Partner, and the General Partner shall have no
obligation pursuant to this Agreement to offer any interest in any such business
interests and activities to the Partnership or any Limited Partner, even if such
opportunity is of a character which, if presented to the Partnership or any
Limited Partner, could be taken by such Person. Except as set forth in a
separate agreement between such Person and the Partnership or any Affiliate of
the Partnership, any Limited Partner may have business interests and engage in
business activities in addition to those relating to the Partnership, including
business interests and activities substantially similar or identical to those of
the Partnership.
(b) In the event the General Partner exercises its rights under
Article 14 of the Charter to redeem REIT Shares, then the General Partner shall
cause the Partnership to purchase from it the same number of Partnership Units
(adjusted by the Conversion Factor) on the same terms that the General Partner
redeemed such REIT Shares.
5.8 EMPLOYMENT OR RETENTION OF AFFILIATES.
(a) Any Affiliate of the General Partner may be employed or retained by
the Partnership and may otherwise deal with the Partnership (whether as a buyer,
lessor, lessee, manager, furnisher of goods or services, broker, agent, lender
or otherwise) and may receive from the Partnership any compensation, price, or
other payment therefor which the General Partner determines to be fair and
reasonable.
22
(b) The Partnership may lend or contribute to its Subsidiaries or other
Persons in which it has an equity investment, and such Persons may borrow funds
from the Partnership, on terms and conditions established in the sole and
absolute discretion of the General Partner. The foregoing authority shall not
create any right or benefit in favor of any Subsidiary or any other Person.
(c) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions as the
General Partner deems are consistent with this Agreement and applicable law.
(d) Except as expressly permitted by this Agreement, neither the
General Partner nor any of its Affiliates shall sell, transfer or convey any
property to, or purchase any property from, the Partnership, directly or
indirectly, except pursuant to transactions that are on terms that are fair and
reasonable to the Partnership.
5.9 LOANS TO THE PARTNERSHIP. If additional funds are required by the
Partnership for any purpose relating to the business of the Partnership or for
any of its obligations, expenses, costs, or expenditures, including operating
deficits, the Partnership may borrow such funds as are needed from the General
Partner or any Affiliate of the General Partner for such period of time and on
such terms as the General Partner or its Affiliate may agree, provided that the
terms shall be substantially equivalent to the terms that could be obtained from
a third party on an arm's-length basis.
5.10 DISTRIBUTIONS. Notwithstanding anything contained in this Agreement
to the contrary, the General Partner, acting as a fiduciary, shall use its
reasonable best efforts and act in good faith to operate the Partnership's
assets and manage the Partnership's business, including its indebtedness, so as
to produce sufficient Available Cash and Capital Transaction Proceeds to pay to
the Class A Limited Partners the Priority Distribution Amount on a current basis
and any balance in the Cumulative Unpaid Priority Distribution Accounts of the
Class A Limited Partners pursuant to Section 4.1 hereof.
5.11 APPROVAL OF OR PROHIBITION AGAINST SALE OF CERTAIN PROPERTIES.
(a) CEDAR MILL APARTMENTS. The Partnership shall not sell, exchange,
mortgage, hypothecate or otherwise convey or transfer the apartment community
known as Cedar Mill Apartments without the advance written consent of each
Person who was a partner in Cedar Mill Apartments, L.P. at the time of its
merger with and into the Partnership, which consent may be withheld for any
reason whatsoever, so long as such Persons continue to hold, in the aggregate,
at least 44,282.5 Class A Common Units.
(b) GREENBROOK APARTMENTS. The Partnership shall not sell, exchange,
mortgage, hypothecate or otherwise convey or transfer the apartment community
known as Greenbrook Apartments without the advance written consent of
Xxxxxx X. Xxxxxxxx, which consent may be withheld for any reason whatsoever, so
long as Xx. Xxxxxxxx continues to hold, in the aggregate, at least 217,500 Class
A Common Units. Notwithstanding any other provision in this Agreement to the
contrary, no provision of this Agreement shall supersede, modify, terminate or
replace (i) any provision of that certain Supplemental Agreement with respect to
Transfer of Property and Delivery of Guaranty dated as of November 10, 1993 by
and among Xxxxxx X. Xxxxxxxx, the Partnership and the General Partner, or (ii)
any restriction, negative covenant or other provision in those certain Warranty
Deeds of record as instrument nos. _____________, ___________, ___________, and
_____________ in the Register's Office of Shelby County, Tennessee, which
agreement, restrictions, negative covenants and other provisions shall remain in
full force and effect from and after the execution, delivery and effectiveness
of this Agreement.
(c) XXXXXXXX XXXXX APARTMENTS. The Partnership shall not sell,
exchange, mortgage, hypothecate or otherwise convey or transfer the apartment
community known as XxXxxxxx Xxxxx Apartments without the advance written consent
of each Person who was a partner in XxXxxxxx Xxxxx Village Partnership, L.P. at
the time of its merger with and into the Partnership, which consent may be
withheld for any reason whatsoever, so long as such Persons continue to hold, in
the aggregate, at least 162,600 Class A Common Units.
(d) PARK ESTATE APARTMENTS. The Partnership shall not sell, exchange,
mortgage, hypothecate or otherwise convey or transfer the apartment community
known as Park Estate Apartments without the advance written consent of each
Person who was a partner in Park Estate Partnership, L.P. at the time of its
merger with and
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into the Partnership, which consent may be withheld for any reason whatsoever,
so long as such Persons continue to hold, in the aggregate, at least 19,238
Class A Common Units.
(e) WINCHESTER SQUARE APARTMENTS. The Partnership shall not sell,
exchange, mortgage, hypothecate or otherwise convey or transfer the apartment
community known as Winchester Square Apartments without the advance written
consent of each Person who was a partner in Winchester Square Partnership, L.P.
at the time of its merger with and into the Partnership, which consent may be
withheld for any reason whatsoever, so long as such Persons continue to hold, in
the aggregate, at least 89,159 Class A Common Units.
(f) XXXXXXXX PROPERTIES. The Partnership shall not, or shall not permit
the owners thereof to, sell, exchange or otherwise convey or transfer the
apartment communities (or interests in the partnerships owning such apartment
communities) listed on Schedule 6.11(f) hereto for a period of two (2) years
from and after the date set forth in the preamble hereof. After such period
shall have expired, then the Partnership shall use its reasonable best efforts
to effect any such sale, exchange, conveyance or transfer of such assets in a
manner that qualifies for tax deferral pursuant to Section 1031 of the Code (or
any successor provision thereto). In the event that the Partnership conveys any
such property in such a tax-deferred exchange, the property acquired by the
Partnership in such exchange shall be subject to the same limitation.
Nothing contained in this Section 6.11 shall prevent any property from being
taken by condemnation or other involuntary conversion; PROVIDED, HOWEVER, that
in such event, the General Partner shall use every reasonable effort to reinvest
the proceeds from any such condemnation or involuntary conversion in a manner
that results in deferral of taxable income from such event pursuant to Section
1033 of the Code.
ARTICLE 6
CHANGES IN GENERAL PARTNER
6.1 TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST. The General
Partner may not transfer any of its Partnership Interest or withdraw as General
Partner.
6.2 ADMISSION OF A SUBSTITUTE OR SUCCESSOR GENERAL PARTNER. A Person
shall be admitted as a substitute or successor General Partner of the
Partnership if otherwise permitted hereunder and only if the following terms and
conditions are satisfied:
(a) the Person to be admitted as a substitute or additional General
Partner shall have accepted and agreed to be bound by all the terms and
provisions of this Agreement by executing a counterpart thereof and such other
documents or instruments as may be required or appropriate in order to effect
the admission of such Person as a General Partner, and a certificate evidencing
the admission of such Person as a General Partner shall have been filed for
recordation and all other actions required by Section 2.6 in connection with
such admission shall have been performed;
(b) if the Person to be admitted as a substitute or additional General
Partner is a corporation or a partnership it shall have provided the Partnership
with evidence satisfactory to counsel for the Partnership of such Person's
authority to become a General Partner and to be bound by the terms and
provisions of this Agreement; and
(c) counsel for the Partnership shall have rendered an opinion (relying
on such opinions from other counsel and the state or any other jurisdiction as
may be necessary) that the admission of the person to be admitted as a
substitute or additional General Partner is in conformity with the Act, that
none of the actions taken in connection with the admission of such Person as a
substitute or additional General Partner will cause the termination of the
Partnership under Section 708 of the Code or will cause it to be classified
other than as a partnership for federal income tax purposes or will result in
the loss of any Limited Partner's limited liability.
6.3 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A GENERAL
PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.04(a)) or the withdrawal, removal
or dissolution of a General Partner (except that, if a General Partner is on the
date of such occurrence a partnership, the withdrawal, death, dissolution, Event
of Bankruptcy as to or
24
removal of a partner in such partnership shall be deemed not to be a dissolution
of such General Partner if the business of such General Partner is continued by
the remaining partner or partners), the Partnership shall be dissolved and
terminated unless the Partnership is continued pursuant to Section 7.3(b).
(b) Following the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.4(a)) or the withdrawal, removal
or dissolution of a General Partner (except that, if a General Partner is on the
date of such occurrence a Partnership, the withdrawal, death, dissolution, or
Event of Bankruptcy as to or removal of a partner in such partnership shall be
deemed not to be a dissolution of such General Partner if the business of such
General Partner is continued by the remaining partner or partners), the Limited
Partners, within 90 days after such occurrence, may elect to reconstitute the
Partnership and continue the business of the Partnership for the balance of the
term specified in Section 2.5 by selecting, subject to Section 7.2 and any other
provisions of this Agreement, a substitute General Partner by the affirmative
vote of a majority of the Percentage Interests of the Limited Partners. If the
Limited Partners elect to reconstitute the Partnership and admit a substitute
General Partner, the relationship with the Partners and of any Person who has
acquired an interest of a Partner in the Partnership shall be governed by this
Agreement.
6.4 REMOVAL OF A GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as to, or the
dissolution of, a General Partner, such General Partner shall be deemed to be
removed automatically; provided, however, that if a General Partner is on the
date of such occurrence a partnership, the withdrawal, death, dissolution, or
Event of Bankruptcy as to or removal of a partner in such partnership shall be
deemed not to be a dissolution of the General Partner if the business of such
General Partner is continued by the remaining partner or partners.
(b) If a General Partner has been removed pursuant to this Section 7.4
and the Partnership is continued pursuant to Section 7.3, such General Partner
shall promptly transfer and assign its General Partner Interest in the
Partnership (i) to the substitute General Partner approved by the Limited
Partners in accordance with Section 7.3(b) and otherwise admitted to the
Partnership in accordance with Section 7.2. At the time of assignment, the
removed General Partner shall be entitled to receive from the substitute General
Partner the fair market value of the General Partner Interest of such removed
General Partner as reduced by any damages caused to the Partnership by such
General Partner. Such fair market value shall be determined by an appraiser
mutually agreed upon by the General Partner and the Limited Partners within 10
days following the removal of the General Partner. In the event that the parties
are unable to agree upon an appraiser, the General Partner and the Limited
Partners each shall select an appraiser, each of which appraisers shall complete
an appraisal of the fair market value of the General Partner's General Partner
Interest within 30 days of the General Partner's removal, and the fair market
value of the General Partner's General Partner Interest shall be the average of
the two appraisals; PROVIDED, HOWEVER, that if the higher appraisal exceeds the
lower appraisal by more than 20% of the amount of the lower appraisal, the two
appraisers, no later than 40 days after the removal of the General Partner,
shall select a third appraiser who shall complete an appraisal of the fair
market value of the General Partner's General Partner Interest no later than 60
days after the removal of the General Partner. In such case, the fair market
value of the General Partner's General Partner Interest shall be the average of
the two appraisals closest in value.
(c) The General Partner Interest of a removed General Partner, during
the time after default until transfer, shall be converted to that of a special
Limited Partner; provided, however, such removed General Partner shall not have
any rights to participate in the management and affairs of the Partnership, and
shall not be entitled to any portion of the income, expenses, profit, gain or
loss, Distributable Cash or allocations, as the case may be, payable or
allocable to the Limited Partners as such. Instead, such removed General Partner
shall retain the right to receive income, expenses, profit, gains or losses
which would be payable or allocable to its General Partner Interest, as the case
may be, if he were still a General Partner and such other items which it may
hold or receive in its capacity as General Partner, until the transfer is
effective pursuant to Section 7.4(b).
(d) All Partners shall have given and hereby do give such consents,
shall take such actions and shall execute such documents as shall be legally
necessary and sufficient to effect all the foregoing provisions of this Section.
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ARTICLE 7
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS
7.1 MANAGEMENT OF THE PARTNERSHIP. The Limited Partners shall not
participate in the management or control of Partnership business nor shall they
transact any business for the Partnership, nor shall they have the power to sign
for or bind the Partnership, such powers being vested solely and exclusively in
the General Partner.
7.2 POWER OF ATTORNEY. Each Limited Partner hereby irrevocably appoints
the General Partner his true and lawful attorney-in-fact, who may act for each
Limited Partner and in his name, place and xxxxx, and for his use and benefit,
to sign, acknowledge, swear to, deliver, file and record, at the appropriate
public offices, any and all documents (including, without limitation, amendments
to and restatements of this Agreement, to the extent permitted hereunder),
certificates, and instruments as may be deemed necessary or desirable by the
General Partner to carry out fully the provisions of this Agreement and the Act
in accordance with their terms, which power of attorney is coupled with an
interest and shall survive the death, dissolution or legal incapacity of the
Limited Partner, or the transfer by the Limited Partner of any part or all of
his Partnership Interest.
7.3 LIMITATION ON LIABILITY OF LIMITED PARTNERS. No Limited Partner
shall be liable for any debts, liabilities, contracts or obligations of the
Partnership. A Limited Partner shall be liable to the Partnership only to make
payments of his Capital Contribution and any amounts required to be contributed
pursuant to Deficit Restoration Obligations as defined in Section 13.4 below, if
any, as and when due hereunder. Other than such payments, no Limited Partner
shall, except as otherwise required by the Act or any contract, be required to
make any further Capital Contributions or other payments or lend any funds to
the Partnership.
7.4 OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER OR
AFFILIATE. No Limited Partner shall at any time, either directly or indirectly,
own any stock or other interest in the General Partner or in any Affiliate
thereof, if such ownership by itself or in conjunction with other stock or other
interests owned by other Limited Partners would, in the opinion of counsel for
the Partnership, jeopardize the classification of the Partnership as a
partnership for federal income tax purposes. The General Partner shall be
entitled to make such reasonable inquiry of the Limited Partners as is required
to establish compliance by the Limited Partners with the provisions of this
Section.
7.5 REDEMPTION RIGHT.
(a) Subject to Section 8.5(c) and the provisions of Article 12 hereof,
each Limited Partner, other than the General Partner, shall have the right (the
"Redemption Right") to require the Partnership to redeem on (or, in the General
Partner's sole discretion, before) a 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. The Redemption Right shall be
exercised pursuant to a Notice of Redemption delivered to the General Partner by
the Limited Partner who is exercising the Redemption Right (the "Redeeming
Partner"); PROVIDED, HOWEVER, that unless the General Partner, in its sole
discretion, shall waive this clause in writing, a Specified Redemption Date with
respect to any Class A Limited Partner who shall acquire Class A Common Units on
or after the date set forth in the preamble hereof shall not occur until after
six (6) months and one (1) day following the date in the preamble, or, if later,
until six (6) months and one (1) day following the issuance of Partnership Units
to a Limited Partner. 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 Partnership
Units held by such Partner. The Redeeming Partner shall have no right, with
respect to any Partnership Units so redeemed, to receive any distributions paid
with respect to Partnership Units where the Partnership Record Date for such
distribution shall be after the date of redemption of the Partnership Units.
(b) Notwithstanding the provisions of Section 8.5(a), the General
Partner may, in its sole and absolute discretion, assume directly and satisfy a
Redemption Right by paying to the Redeeming Partner the Redemption Amount on or
before 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; PROVIDED, HOWEVER, that such Partnership Units shall
thereupon be converted into Class B Common Units. In the event the General
Partner shall exercise its right to satisfy the Redemption Right in
26
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 and the Redeeming Partner 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 General
Partner may reasonably require in connection with the exercise of the Redemption
Right.
(c) The Partnership or the General Partner, as the case may be, may
elect to pay the Cash Amount to a Redeeming Partner as the Redemption Amount for
such Partner. Such determination shall be made by the General Partner in its
sole discretion.
ARTICLE 8
TRANSFERS OF PARTNERSHIP INTERESTS
8.1 PURCHASE FOR INVESTMENT.
(a) Each Limited Partner hereby represents and warrants to the General
Partner and to the Partnership that the acquisition of his Partnership Interest
is made as a principal for his account for investment purposes only and not with
a view to the resale or distribution of such Partnership Interest.
(b) Each Limited Partner agrees that he will not sell, assign or
otherwise transfer his Partnership Interest or any fraction thereof, whether
voluntarily or by operation of law or at judicial sale or otherwise, to any
Person who does not make the representations and warranties to the General
Partner set forth in Section 9.1(a) above and similarly agrees not to sell,
assign or transfer such Partnership Interest or fraction thereof to any Person
who does not similarly represent, warrant and agree.
8.2 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS.
(a) Except as otherwise provided in this Article 9, no Limited Partner
may offer, sell, assign, hypothecate, pledge or otherwise transfer his Limited
Partnership Interest, in whole or in part, whether voluntarily or by operation
of law or at judicial sale or otherwise (collectively, a "Transfer") without the
written consent of the General Partner, which consent may be withheld in the
sole discretion of the General Partner. The General Partner may require, as a
condition of any Transfer, that the transferor assume all costs incurred by the
Partnership in connection therewith.
(b) No Limited Partner may effect a Transfer of his Limited Partnership
Interest, in whole or in part, if, in the opinion of legal counsel for the
Partnership, such proposed Transfer would require the registration of the
Limited Partnership Interest under the Securities Act of 1933, as amended, or
would otherwise violate any applicable federal or state securities or "Blue Sky"
law (including investment suitability standards).
(c) No transfer by a Limited Partner of his Partnership Units, in whole
or in part, may be made to any Person if in the opinion of legal counsel for the
Partnership, the transfer would result in the Partnership's being treated as an
association taxable as a corporation (other than a qualified REIT subsidiary
within the meaning of Section 856(i) of the Code).
(d) Section 9.2(a) shall not apply to the following transactions,
except that the General Partner may require that the transferor assume all costs
incurred by the Partnership in connection therewith:
(i) any Transfer by a Limited Partner pursuant to the exercise
of its Redemption Right under Section 8.5;
(ii) any Transfer by a Limited Partner that is a corporation or
other business entity to any of its Affiliates or subsidiaries or to any
successor in interest of such Limited Partner;
27
(iii) any donative Transfer by an individual Limited Partner to
his Immediate Family Members or any trust in which the individual or his
Immediate Family Members own, collectively, 100% of the beneficial
interests. For purposes of this Section 9.2(c)(iii), the term "Immediate
Family Member" shall be deemed to include only an individual Limited
Partner's brothers, sisters, nieces, nephews, spouse, parents, children,
grandchildren, and other descendants; or
(iv) any Transfer to a lender, where such Units are pledged to
secure a bona fide obligation of the Limited Partner and any transfer in
accordance with the rights of such lender under the instruments evidencing
such obligation (provided that the General Partner receives 10 days prior
written notice of any transfer pursuant to this subparagraph (iv)).
(e) Any Transfer in contravention of any of the provisions of this
Article 9 shall be void and ineffectual and shall not be binding upon, or
recognized by, the Partnership.
8.3 ADMISSION OF SUBSTITUTE LIMITED PARTNER.
(a) Subject to the other provisions of this Article 9, an assignee of
the Limited Partnership Interest of a Limited Partner (which shall be understood
to include any purchaser, transferee, donee, or other recipient of any
disposition of such Limited Partnership Interest) shall be deemed admitted as a
Limited Partner of the Partnership only upon the satisfactory completion of the
following:
(i) The assignee shall have accepted and agreed to be bound by
the terms and provisions of this Agreement by executing a counterpart or an
amendment thereof, and such other documents or instruments as the General
Partner may require in order to effect the admission of such Person as a
Limited Partner.
(ii) The assignee shall have delivered a letter containing the
representation set forth in Section 9.1(a) and the agreement set forth in
Section 9.1(b).
(iii) If the assignee is a corporation, partnership or trust, the
assignee shall have provided the General Partner with evidence satisfactory
to counsel for the Partnership of the assignee's authority to become a
Limited Partner under the terms and provisions of this Agreement.
(iv) The assignee shall have executed a power of attorney
containing the terms and provisions set forth in Section 8.2.
(v) The assignee shall have paid all reasonable legal fees of
the Partnership and the General Partner and filing and publication costs in
connection with his substitution as a Limited Partner.
(b) For the purpose of allocating profits and losses and distributing
cash received by the Partnership, a Substitute Limited Partner shall be treated
as having become, and appearing in the records of the Partnership as, a Partner
upon the date specified in the transfer documents or the date on which the
General Partner has received all necessary instruments of transfer and
substitution.
(c) The General Partner shall cooperate with the Person seeking to
become a Substitute Limited Partner by preparing the documentation required by
this Section and making all official filings and publications. The Partnership
shall take all such action as promptly as practicable after the satisfaction of
the conditions in this Article 9 to the admission of such Person as a Limited
Partner of the Partnership.
8.4 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.
(a) Subject to the provisions of Sections 9.1 and 9.2 hereof, except as
required by operation of law, the Partnership shall not be obligated for any
purposes whatsoever to recognize the assignment by any Limited Partner of his
Partnership Interest until the Partnership has received notice thereof.
28
(b) Any Person who is the assignee of all or any portion of a Limited
Partner's Limited Partnership Interest, but does not become a Substitute Limited
Partner and desires to make a further assignment of such Limited Partnership
Interest, shall be subject to all the provisions of this Article 9 to the same
extent and in the same manner as any Limited Partner desiring to make an
assignment of his Limited Partnership Interest.
8.5 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A
LIMITED PARTNER. The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death of a Limited Partner or a final adjudication that a Limited
Partner is incompetent (which term shall include, but not be limited to,
insanity) shall not cause the termination or dissolution of the Partnership, and
the business of the Partnership shall continue and if an order for relief in a
bankruptcy proceeding is entered against a Limited Partner, the trustee or
receiver of his estate or, if he dies, his executor, administrator or trustee,
or, if he is finally adjudicated incompetent, his committee, guardian or
conservator, shall have the rights of such Limited Partner for the purpose of
settling or managing his estate property and such power as the bankrupt,
deceased or incompetent Limited Partner possessed to assign all or any part of
his Partnership Interest and to join with the assignee in satisfying conditions
precedent to the admission of the assignee as a Substitute Limited Partner.
8.6 JOINT OWNERSHIP OF INTERESTS. A Partnership Interest may be
acquired by two individuals as joint tenants with right of survivorship,
provided that such individuals either are married or are related and share the
same home as tenants in common. The written consent or vote of both owners of
any such jointly held Partnership Interest shall be required to constitute the
action of the owners of such Partnership Interest; provided, however, that the
written consent of only one joint owner will be required if the Partnership has
been provided with evidence satisfactory to the counsel for the Partnership that
the actions of a single joint owner can bind both owners under the applicable
laws of the state of residence of such joint owners. Upon the death of one owner
of a Partnership Interest held in a joint tenancy with a right of survivorship,
the Partnership Interest shall become owned solely by the survivor as a Limited
Partner and not as an assignee. The Partnership need not recognize the death of
one of the owners of a jointly-held Partnership Interest until it shall have
received notice of such death. Upon notice to the General Partner from either
owner, the General Partner shall cause the Partnership Interest to be divided
into two equal Partnership Interests, which shall thereafter be owned separately
by each of the former owners.
ARTICLE 9
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
9.1 BOOKS AND RECORDS. At all times during the continuance of the
Partnership, the General Partner shall keep or cause to be kept at the
Partnership's specified office true and complete books of account in accordance
with generally accepted accounting principles as well as in accordance with the
accounting method followed by the Partnership for federal income tax purposes,
including: (a) a current list of the full name and last known business address
of each Partner, (b) a copy of the Certificate of Limited Partnership and all
certificates of amendment thereto, (c) copies of the Partnership's federal,
state and local income tax returns and reports, (d) copies of the Agreement and
any financial statements of the Partnership for the three most recent years and
(e) all documents and information required under the Act. Any Partner or his
duly authorized representative, upon paying the costs of collection, duplication
and mailing, shall be entitled to inspect or copy such records during ordinary
business hours.
9.2 CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS.
(a) All funds of the Partnership not otherwise invested shall be
deposited in one or more accounts maintained in such banking or brokerage
institutions as the General Partner shall determine, and withdrawals shall be
made only on such signature or signatures as the General Partner may, from time
to time, determine.
(b) All deposits and other funds not needed in the operation of the
business of the Partnership may be invested by the General Partner in investment
grade instruments (or investment companies whose portfolio consists primarily
thereof), government obligations, certificates of deposit, bankers' acceptances
and municipal notes and bonds. The funds of the Partnership shall not be
commingled with the funds of any other Person except for such commingling as may
necessarily result from an investment in those investment companies permitted by
this Section 10.2(b).
29
9.3 FISCAL AND TAXABLE YEAR. The fiscal and taxable year of the
Partnership shall be the calendar year.
9.4 ANNUAL TAX INFORMATION AND REPORT. Within 75 days after the end of
each fiscal year of the Partnership, the General Partner shall furnish to each
person who was a Limited Partner at any time during such year the tax
information necessary to file such Limited Partner's individual tax returns as
shall be reasonably required by law.
9.5 TAX MATTERS PARTNER; TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS.
(a) The General Partner shall be the Tax Matters Partner of the
Partnership within the meaning of Section 6231(a)(7) of the Code. As Tax Matters
Partner, the General Partner shall have the right and obligation to take all
actions authorized and required, respectively, by the Code for the Tax Matters
Partner. The General Partner shall have the right to retain professional
assistance in respect of any audit of the Partnership by the Service and all
out-of-pocket expenses and fees incurred by the General Partner on behalf of the
Partnership as Tax Matters Partner shall constitute Partnership expenses. In the
event the General Partner receives notice of a final Partnership adjustment
under Section 6223(a)(2) of the Code, the General Partner shall either (i) file
a court petition for judicial review of such final adjustment within the period
provided under Section 6226(a) of the Code, a copy of which petition shall be
mailed to all Limited Partners on the date such petition is filed, or (ii) mail
a written notice to all Limited Partners, within such period, that describes the
General Partner's reasons for determining not to file such a petition.
(b) All elections required or permitted to be made by the Partnership
under the Code shall be made by the General Partner in its sole discretion.
(c) In the event of a transfer of all or any part of the Partnership
Interest of any Partner, the Partnership, at the option of the General Partner,
may elect pursuant to Section 754 of the Code to adjust the basis of the
Properties. Notwithstanding anything contained in Article 5 of this Agreement,
any adjustments made pursuant to Section 754 shall affect only the successor in
interest to the transferring Partner and in no event shall be taken into account
in establishing, maintaining or computing Capital Accounts for the other
Partners for any purpose under this Agreement. Each Partner will furnish the
Partnership with all information necessary to give effect to such election.
9.6 REPORTS TO LIMITED PARTNERS.
(a) The books of the Partnership shall be examined annually as of the
end of each fiscal year of the Partnership by accountants selected by the
General Partner, who shall be the same accountants responsible for the
examination of the General Partner's books. The General Partner shall determine
and prepare a statement of assets and liabilities and partners' capital as of
the end of such year, as well as statements of revenue and expenses
(collectively, the "Financial Statements"). As a note to such Financial
Statements, the General Partner shall prepare a schedule of all loans to the
Partnership. Such schedule shall demonstrate that loans have been made, used,
carried on the books of the Partnership (and repaid, if applicable) in
accordance with the provisions of this Agreement. Within 90 days after the end
of each fiscal year, the General Partner shall transmit the Financial Statements
to the Limited Partners. The General Partner also shall prepare quarterly
unreviewed Financial Statements and shall transmit such statements to the
Limited Partners within 45 days of the end of each fiscal quarter of the
Partnership.
(b) Any Partner shall further have the right to a private audit of the
books and records of the Partnership, provided such audit is made for
Partnership purposes, at the expense of the Partner desiring it and is made
during normal business hours.
(c) The General Partner shall deliver to each Limited Partner in a
timely manner all communications transmitted from time to time by the General
Partner to its shareholders.
30
ARTICLE 10
AMENDMENT OF AGREEMENT
The General Partner, without the consent of the Limited Partners, may amend
this Agreement in any respect; provided, however, that the following amendments
shall require the consent of the Class A Limited Partners holding more than 66
2/3% of the Percentage Interests then held by all Class A Limited Partners:
(a) any amendment that would adversely affect the rights of the Class A
Limited Partners to receive the distributions payable to them hereunder;
(b) any amendment that would alter the Partnership's allocations of Net
Income and Net Losses in a manner adverse to the Class A Limited Partners;
(c) any amendment that would impose on the Limited Partners any
obligation to make additional Capital Contributions to the Partnership; or
(d) any amendment that would adversely affect the rights granted to the
Class A Limited Partners in Sections 3.2(a), 3.3, 3.4, 6.2, 6.10, 6.11, 8.5, 9.2
or Article 12 hereof.
ARTICLE 11
CONSOLIDATION, MERGER OR SALE OF ASSETS OF THE GENERAL PARTNER
11.1 TRIGGERING EVENTS. For the purposes of this Article 12, each of the
following events shall be deemed to be a "Triggering Event": (a) if the General
Partner consolidates with, or merges into, any other Person, and the General
Partner is not the continuing or surviving corporation of such consolidation or
merger, (b) if any Person consolidates with, or merges into, the General
Partner, and the General Partner is the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding REIT Shares are converted into or
exchanged for stock or other securities of any other Person or cash or any other
property, (c) if any Person becomes the Beneficial Owner (as hereinafter
defined) of 33.3% or more of the outstanding REIT Shares or (d) if the General
Partner sells or otherwise transfers (or one or more of its Subsidiaries,
including the Partnership, sells or otherwise transfers) to any Person or
Persons, in one or more transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the General Partner or the
Partnership. "Beneficial Owner" means any Person who, together with such
Person's affiliates (as defined in Rule 12b-2 of the Securities Exchange Act of
1934 as in effect on the date this Article 12 shall be adopted (including any
rules and regulations thereunder)) (the "Exchange Act") and associates (as
defined in Rule 12b-2 of the Exchange Act), (i) would be considered a
"beneficial owner" under Rule 13d-3 of the Exchange Act, other than (A) as a
result of a revocable proxy given in response to a proxy or consent solicitation
made pursuant to, and in accordance with, the Exchange Act or (B) as would not
be reportable by such Person on Schedule 13D under the Exchange Act, (ii) has
entered into any agreement, arrangement or understanding (whether or not in
writing), for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy or consent solicitation made pursuant to, and in accordance
with, the Exchange Act) or disposing of REIT Shares or (iii) has the right to
acquire (whether such right is exercisable immediately or only after the passage
of time or upon the satisfaction of conditions) REIT Shares pursuant to any
agreement, arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants or options or
otherwise.
11.2 FROM AND AFTER THE OCCURRENCE OF A TRIGGERING EVENT. Effective on
the date of each Triggering Event, the Redemption Right shall be adjusted as
provided in this Section 12.2.
(a) From and after the occurrence of a Triggering Event (each such
occurrence, a "Trigger Occurrence") and until the occurrence, if any, of a
subsequent Triggering Event (in which case a further adjustment shall be made
pursuant to this Section 12.2 with respect to each such Triggering Event), each
and every reference contained in this Agreement to a "REIT Share" or "REIT
Shares" shall be deemed to be a reference to a share or shares, respectively
(each, a "Replacement Share"; collectively, "Replacement Shares"), of: (i) if,
as a result of any Triggering Event, all of the REIT Shares are converted solely
into Registered Common Stock (as hereinafter defined), such Registered Common
Stock and (ii) in all other cases, the common stock, or, if such Person shall
have no common stock, the equity securities or other equity interest having
power to control or direct the management
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(the "Common Stock") of (a) in the event of a Triggering Event described in
clause (a) or (b) of the first sentence of Section 12.1, (1) the Person that is
the issuer of any securities into which the REIT Shares are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
who has the highest Market Capitalization (as hereinafter defined) and (2) if no
securities are so issued, the Person that is the other party to such merger or
consolidation, or if there is more than one such Person, the Person who has the
highest Market Capitalization or (b) in the event of a Triggering Event
described in clause (c) or (d) of the first sentence of Section 12.1, the Person
that is the party becoming the Beneficial Owner of the largest percentage of the
outstanding REIT Shares or receiving the largest portion of the assets or
earning power transferred pursuant to such transaction or transactions, or, if
each Person that is a party to such transaction or transactions or if the Person
becoming the Beneficial Owner of the largest portion of the REIT Shares or
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person has the highest Market Capitalization; PROVIDED,
HOWEVER, that in any such case, (1) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding twelve-month period
registered ("Registered Common Stock") under Section 12 of the Exchange Act, or
such Person is not a corporation, and such Person is a direct or indirect
Subsidiary of another Person that has Registered Common Stock outstanding,
"Replacement Shares" shall mean shares of the Common Stock of such other Person;
(2) if the Common Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is a direct or indirect Subsidiary
of another Person but is not a direct or indirect Subsidiary of another Person
which has Registered Common Stock outstanding, "Replacement Shares" shall mean
shares of the Common Stock of the ultimate parent entity of such first-mentioned
Person; (3) if the Common Stock of such Person is not Registered Common Stock or
such Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and one of such other Persons has Registered
Common Stock outstanding, "Replacement Shares" shall mean shares of the Common
Stock of whichever of such other Persons is the issuer having the highest Market
Capitalization; and (4) if the Common Stock of such Person is not Registered
Common Stock or such Person is not a corporation, and such Person is directly or
indirectly controlled by more than one Person, and none of such other Persons
have Registered Common Stock outstanding, "Replacement Shares" shall mean shares
of the Common Stock of whichever ultimate parent entity is the corporation
having the highest aggregate shareholders' equity or, if no such ultimate parent
entity is a corporation, shall be deemed to refer to shares of the Common Stock
of whichever ultimate parent entity is the entity having the greatest net
assets. Any issuer of "Replacement Shares" shall be referred to as an "Issuer".
"Market Capitalization" means the dollar figure equal to the product of the
number of shares of Common Stock issued and outstanding on the date of the
Trigger Occurrence in question, on a fully diluted basis, not held by Affiliates
(as defined under the Exchange Act) multiplied by the Average Trading Price (as
hereinafter defined). The holders of a majority of the issued and outstanding
Class A Common Units may, within 90 days after the occurrence of a Triggering
Event described in clause (c) of the first sentence of Section 12.1, waive, in
writing, the adjustment to the Redemption Right provided for in this Section
12.2; PROVIDED, that (i) the Redemption Right shall remain in full force and
effect as provided in Section 8.5, (ii) such election shall be binding on all of
the Limited Partners and (iii) if the adjustment to the Redemption Right has
previously been waived pursuant to this sentence, a new Triggering Event shall
be deemed to occur each time a Person who is the Beneficial Owner of at least
33.3% of the outstanding REIT Shares becomes the Beneficial Owner of an
additional 2% or more of the outstanding REIT Shares.
(b) From and after a Trigger Occurrence, the "Conversion Factor" shall
be adjusted by multiplying the "Conversion Factor" existing on the day
immediately prior to such Trigger Occurrence as follows: (i) if the REIT Shares,
as a result of the Trigger Occurrence, have been converted solely into the right
to receive Registered Common Stock, by the number of shares of Registered Common
Stock which the holder of a single REIT Share was entitled to receive as a
result of the Trigger Occurrence or (ii) in all other cases, by a fraction, the
numerator of which shall be the Average Trading Price of a REIT Share as of such
Trigger Occurrence and the denominator of which shall be the Average Trading
Price of a Replacement Share as of such Trigger Occurrence. Following a Trigger
Occurrence, the Conversion Factor shall be further adjusted as provided in this
Section 12.2.
(c) For the purpose of any computation hereunder, the "Average Trading
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such shares for the ten consecutive
trading days immediately prior to the third trading day prior to such date;
PROVIDED, HOWEVER, in the event the Triggering Event occurs as part of a series
of related transactions which also includes a tender offer, the ten trading day
period shall be the ten consecutive trading day period immediately prior to the
day REIT Shares are accepted for payment pursuant to such tender offer;
PROVIDED, HOWEVER, FURTHER, if prior to the expiration of such requisite ten
trading day period the issuer announces either (i) a dividend or distribution on
such shares payable in
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such shares or securities convertible into such shares or (ii) any subdivision,
combination or reclassification of such shares, then, following the ex-dividend
date for such dividend or the record date for such subdivision, as the case may
be, the "Average Trading Price" shall be properly adjusted to take into account
such event. The closing price for each day shall be, if the shares are listed
and admitted to trading on a national securities exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such shares are
listed or admitted to trading or, if such shares are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the high bid price in the over-the-counter market, as reported by the
Nasdaq Stock Market's National Market or such other system then in use, or, if
on any such date such shares are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in such shares selected by the holders of a
majority of the issued and outstanding Class A Common Units. If such shares are
not publicly held or not so listed or traded or if, for the ten days prior to
such date, no market maker is making a market in such shares, the Average
Trading Price of such shares on such date shall be deemed to be the fair value
of such shares as determined as set forth in Section 12.2(d). The term "trading
day" shall mean, if such shares are listed or admitted to trading on any
national securities exchange, a day on which the principal national securities
exchange on which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or admitted, a
Business Day.
(d) In the event that on the date of a Trigger Occurrence, the shares
of a Person are not publicly held or not so listed or traded or if, for the ten
days prior to such date, no market maker is making a market in the shares of a
Person, the Average Trading Price of the shares of such Person shall be the fair
value of the shares as determined in good faith by the holders of a majority of
the issued and outstanding Class A Common Units and the General Partner, which
determination shall be binding on all of the Limited Partners. If the holders of
a majority of the issued and outstanding Class A Common Units and the General
Partner have not agreed on the fair value of the shares and executed and
delivered between them an agreement setting forth the same within twenty (20)
days after the Trigger Occurrence in question, then either the General Partner
or the holders of a majority of the issued and outstanding Class A Common Units
may notify the other that they or it desire to invoke the following arbitration
procedure:
(i) Notice of the holders of a majority of the issued and
outstanding Class A Common Units or the General Partner of such parties'
intention to seek arbitration shall be delivered to the other parties
within ten (10) days after which all parties shall, in good faith, attempt
to agree on a single arbitrator to determine the fair value of the shares
(the "Arbitrator"). If the holders of a majority of the issued and
outstanding Class A Common Units and the General Partner have not agreed on
the Arbitrator within ten (10) days after the giving of the Arbitration
Notice, then either, on behalf of both, may apply to the local office of
the American Arbitration Association or any organization which is the
successor thereof (the "AAA") for appointment of the Arbitrator, or, if the
AAA shall not then exist or shall fail, refuse or be unable to act such
that the Arbitrator is not appointed by the AAA within ten (10) days after
application therefor, then either party may apply to any court of competent
jurisdiction in the County of Shelby in the State of Tennessee (the
"Court") for the appointment of the Arbitrator and the other party shall
not raise any question as to the Court's full power and jurisdiction to
entertain the application and make the appointment. The date on which the
Arbitrator is appointed, by the agreement of the parties, by appointment by
the AAA or by appointment by the Court, is referred to herein as the
"Appointment Date". If any Arbitrator appointed hereunder shall be
unwilling or unable, for any reason, to serve, or continue to serve, a
replacement arbitrator shall be appointed in the same manner as the
original Arbitrator.
(ii) The arbitration shall be conducted in accordance with the
then prevailing commercial arbitration rules of the AAA, modified as
follows:
(1) To the extent that any statute imposes requirements
different than those of the AAA in order for the decision of the
Arbitrator to be enforceable in the courts of the State of
Tennessee, such requirements shall be complied with in the
arbitration.
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(2) The Arbitrator shall be disinterested and
impartial, shall not be affiliated with the Limited Partners or the
General Partner and shall have at least ten (10) years experience
in the market, industry and/or sector in which the applicable
Person transacts the majority of its business.
(3) Before hearing any testimony or receiving any
evidence, the Arbitrator shall be sworn to hear and decide the
controversy faithfully and fairly by an officer authorized to
administer an oath and a written copy thereof shall be delivered to
each of the Limited Partners and the General Partner.
(4) Within twenty (20) days after the Appointment Date,
the holders of a majority of the issued and outstanding Class A
Common Units and the General Partner shall deliver to the
Arbitrator two (2) copies of their respective written
determinations of the fair value of the shares (each, a
"Determination") together with such affidavits, appraisals, reports
and other written evidence relating thereto as the submitting party
deems appropriate. After the submission of any Determination, the
submitting party may not make any additions to or deletions from,
or otherwise change, such Determination or the affidavits,
appraisals, reports and other written evidence delivered therewith.
If either party fails to so deliver its Determination within such
time period, time being of the essence with respect thereto, such
party shall be deemed to have irrevocably waived its right to
deliver a Determination and the Arbitrator, without holding a
hearing, shall accept the Determination of the submitting party as
the fair value of the shares. If each party submits a Determination
with respect to the fair value of the shares within the twenty (20)
day period described above, the Arbitrator shall, promptly after
its receipt of the second Determination, deliver a copy of each
party's Determination to the other party.
(5) Not less than ten (10) days nor more than twenty
(20) days after the earlier to occur of (A) the expiration of the
twenty (20) day period provided for in clause (4) of this
subparagraph or (B) the Arbitrator's receipt of both of the
Determinations from the parties (such earlier date is referred to
herein as the "Submission Date") and upon not less than five (5)
days notice to the parties, the Arbitrator shall hold one or more
hearings with respect to the determination of the fair value of the
shares. The hearings shall be held in the Memphis metropolitan area
of Tennessee at such location and time as shall be specified by the
Arbitrator. Each of the parties shall be entitled to present all
relevant evidence and to cross-examine witnesses at the hearings.
The Arbitrator shall have the authority to adjourn any hearing to
such later date as the Arbitrator shall specify, provided that in
all events all hearings with respect to the determination of the
fair value of the shares shall be concluded not later than thirty
(30) days after the Submission Date.
(6) The Arbitrator shall be instructed, and shall be
empowered only, to select as the fair value of the shares that one
of the Determinations which the Arbitrator believes is the more
accurate determination of the Average Trading Price of the shares.
Without limiting the generality of the foregoing, in rendering his
or her decision, the Arbitrator shall not add to, subtract from or
otherwise modify the provisions of this Agreement or either of the
Determinations.
(7) The Arbitrator shall render his or her
determination as to the selection of a Determination in a signed
and acknowledged written instrument, original counterparts of which
shall be sent simultaneously to Limited Partners and the General
Partner, within ten (10) days after the conclusion of the
hearing(s) required by clause (5) of this Section.
(iii) This provision shall constitute a written agreement to
submit any dispute regarding the determination of the Average Trading Price
of the shares of a Person to arbitration.
(iv) The arbitration decision, determined as provided in this
Article, shall be conclusive and binding on the parties, shall constitute
an "award" by the Arbitrator within the meaning of the AAA rules and
applicable law, and judgment may be entered thereon in any court of
competent jurisdiction.
34
(v) The Partnership shall pay all fees and expenses relating to
the arbitration (including, without limitation, the fees and expenses of
one counsel (including local counsel, if required) chosen by the holders of
a majority of the issued and outstanding Class A Common Units and of
experts and witnesses retained or called by the Limited Partners). The
Limited Partners' counsel chosen as set forth in the preceding sentence
shall represent the interests of all of the Limited Partners and the choice
of counsel shall be binding on all of the Limited Partners.
(e) From and after a Trigger Occurrence, each and every reference to
the "General Partner" in Section 8.5 shall be deemed to be a reference to the
Issuer of the Replacement Shares. From and after a Trigger Occurrence, the
Issuer shall assume or unconditionally guarantee the performance of the General
Partner's obligations, including the issuance of Replacement Shares upon any
redemption pursuant to Section 8.5, under this Agreement pursuant to an
instrument in form and substance satisfactory to the holders of a majority of
the issued and outstanding Class A Common Units. In the event that a Triggering
Event shall be a transaction wherein the Issuer of the Replacement Shares shall
not, by operation of law, assume the obligations of the General Partner in
respect of the redemption of Units pursuant to Section 8.5 hereunder, the
General Partner shall use its best efforts to obtain from such Issuer a written
instrument pursuant to which the obligations referred to in the second sentence
of this paragraph (e) shall be assumed and unconditionally guaranteed. In the
event that such assumption and/or guaranty shall not be obtained by the General
Partner, then the Redemption Amount defined herein shall be the Cash Amount,
adjusted as provided in this Article 12, increased by a factor equal to 1
divided by 1 minus the tax rate on long-term capital gains at the time of the
Triggering Event; provided, however, that at such time as the Issuer shall
execute and deliver the written instrument of assumption and/or guaranty
described above, the foregoing definition shall revert to that otherwise
described in this Agreement, as modified by this Article 12 (except this
sentence). From and after a Trigger Occurrence, the "Average Trading Price" of a
REIT Share or a Replacement Share, as applicable shall be substituted for the
"Value" of the same for the purposes of determining the Cash Amount.
11.3 ADDITIONAL ISSUER COVENANTS. The General Partner shall (i) not
enter in an agreement with any Person which would result in a Triggering Event
unless such agreement provides for each of the following and (ii) from and after
any Trigger Occurrence, comply with each of the following:
(a) Substantially contemporaneously with any Trigger Occurrence, the
General Partner, the Issuer and its Affiliates shall enter into, and, if
appropriate, cause the Partnership to enter into, such mergers, combinations,
conveyances or other transactions as shall be required to cause substantially
all of the assets of the General Partner (including those owned by the
Partnership and its Affiliates) and the Issuer and its Affiliates to be owned,
leased or held directly or indirectly by a single operating partnership in which
the Limited Partners shall hold partnership units having the rights specified by
this Agreement. The agreement governing the resulting operating partnership
shall be in a form substantially no less favorable to each of the Limited
Partners than is this Agreement.
(b) From and after a Trigger Occurrence, the General Partner shall not
take any action (including, without limitation, the prepayment of debt or the
selling of properties), other than a dividend or distribution in respect of all
of the Class A Common Units complying with Articles 4 and 13, or fail to take
any action, if such action, or failure to take action, would result in any
Limited Partner realizing a taxable gain, without the prior written consent of
the holders of a majority of the issued and outstanding Class A Common.
Notwithstanding the previous sentence, if the Issuer or the General Partner or
both, at the election of the holders of a majority of the issued and outstanding
Class A Common, shall agree, in writing, to indemnify each of the Limited
Partners against any taxes that the Limited Partners might incur a result of an
action, or failure to take action, on the part of the General Partner, such
action, or failure to take action, shall not require the consent of any of the
Limited Partners. Further, if the General Partner is a REIT, the General Partner
shall be permitted to take any action required by the Code or the Service to
allow the General Partner to remain a REIT without the consent of any of the
Limited Partners.
(c) From and after a Trigger Occurrence, in the event a dividend or
distribution consisting of cash or property (other than Replacement Shares) or
both is paid by the Issuer in respect of the Replacement Shares, the General
Partner shall cause the Partnership to distribute, in respect of each
Partnership Unit, the same amount of cash or property the holder of a
Partnership Unit would have received had such holder exercised its Redemption
Right and received Replacement Shares prior to such dividend or distribution.
35
11.4 APPLICATION TO LATER TRANSACTIONS. This Article 12 shall apply to
the initial Triggering Event and shall continue to apply to each subsequent
Triggering Event.
11.5 WAIVERS AND AMENDMENTS
(a) The provisions of this Article 12 may be waived only upon the
written consent of the holders of a majority of the issued and outstanding Class
A Common Units.
(b) This Article 12 shall only be amended as provided in Section 11(d)
of this Agreement and shall be deemed included in such section for all purposes.
ARTICLE 12
DISSOLUTION AND LIQUIDATION
12.1 DISSOLUTION. The Partnership shall not be dissolved by the
admission of Substituted Limited Partners or Additional Limited Partners or by
the admission of a successor General Partner in accordance with the terms of
this Agreement. Upon the withdrawal of the General Partner, any successor
General Partner shall continue the business of the Partnership. Notwithstanding
anything contained herein to the contrary, except as provided below in this
Section 13.1, the General Partner and the Partnership shall not dissolve the
Partnership, adopt a plan of liquidation for the Partnership or sell all or
substantially all of the assets of the Partnership in a Liquidating Transaction
or otherwise without the consent of the Limited Partners holding a majority of
the issued and outstanding Class A Common Units. The Partnership shall dissolve,
and its affairs shall be wound up, upon the first to occur of any of the
following (each an "EVENT OF DISSOLUTION"):
(a) EXPIRATION OF TERM--the expiration of its term as provided in
Section 2.5 hereof;
(b) WITHDRAWAL OF GENERAL PARTNER--an event of withdrawal of the last
remaining General Partner, as defined in the Act (other than an event of
bankruptcy), unless, within 90 days after the withdrawal, remaining Class A
Limited Partners holding in the aggregate a majority of the issued and
outstanding Class A Common Units agree in writing to continue the business of
the Partnership and to the appointment, effective as of the date of withdrawal,
of a substitute General Partner;
(c) JUDICIAL DISSOLUTION DECREE-- the entry of a decree of judicial
dissolution of the Partnership pursuant to the provisions of the Act; or
(d) BANKRUPTCY OR INSOLVENCY OF GENERAL PARTNER--the last remaining
General Partner shall be incapacitated by reason of its bankruptcy unless,
within 90 days after the withdrawal, remaining Limited Partners holding in the
aggregate a majority of the issued and outstanding Class A Common Units agree in
writing to continue the business of the Partnership and to the appointment,
effective as of the date of withdrawal, of a substitute General Partner.
12.2 WINDING UP.
(a) GENERAL. The General Partner shall provide written notice to the
Limited Partners of the occurrence of an Event of Dissolution, giving them at
least 20 days in which to exercise their Redemption Right prior to the
distribution of any proceeds from the liquidation of the Partnership pursuant to
this Section 13.2(a). Upon the occurrence of an Event of Dissolution, the
Partnership shall continue solely for the purposes of winding up its affairs in
an orderly manner, liquidating its assets, and satisfying the claims of its
creditors and Partners. No Partner shall take any action that is inconsistent
with, or not necessary to or appropriate for, the winding up of the
Partnership's business and affairs. The General Partner (or, in the event there
is no remaining General Partner, any Person elected by a majority in interest of
the Limited Partners (the "LIQUIDATOR")) shall be responsible for overseeing the
winding up and dissolution of the Partnership and shall take full account of the
Partnership's liabilities and property and the Partnership property (subject to
Sections 13.2(b) and l 3.2(c)) shall be liquidated as promptly as is consistent
with obtaining the fair value thereof, and the proceeds therefrom shall be
applied and distributed in the following order:
36
(i) First, to the payment and discharge of all of the
Partnership's debts and liabilities to creditors other than the Partners;
(ii) Second, to the payment and discharge of all of the
Partnership's debts and liabilities to the Partners, pro rata in accordance
with amounts owed to each such Partner, unless the General Partner elects
to treat such debts and liabilities on parity with the debts and
liabilities described in (i) above;
(iii) Third, one hundred percent ( 100%) to the Class A Limited
Partners, pro rata based on the number of Class A Common Units held by such
Class A Limited Partners, until each such Class A Limited Partner has
received an amount equal to the aggregate Priority Distribution Amounts for
each Partnership Record Date (if any) occurring subsequent to the Event of
Dissolution; and
(iv) The balance, if any, to the General Partner and Limited
Partners in accordance with their Capital Accounts, after giving effect to
all contributions, distributions, and allocations for all periods.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.
(b) DEFERRED LIQUIDATION. Notwithstanding the provisions of
Section 13.2(a) hereof which require liquidation of the assets of the
Partnership, but subject to the order of priorities set forth therein, and
further subject to Section 13 2(c) hereof, if prior to or upon dissolution of
the Partnership the Liquidator determines that an immediate sale of part or all
of the Partnership's assets would be impractical or would cause undue loss to
the Partners, the Liquidator may, in its sole and absolute discretion, defer for
a reasonable time the liquidation of any assets except those necessary to
satisfy liabilities of the Partnership (including to those Partners as
creditors) and/or distribute to the Partners, in lieu of cash, as tenants in
common and in accordance with the provisions of Section 13.2(a) and Section
13.2(c) hereof, undivided interests in such Partnership assets as the Liquidator
deems not suitable for liquidation. Any such distributions in kind shall be made
only if, in the good faith judgment of the Liquidator, such distributions in
kind are in the best interest of the Partners, and shall be subject to such
conditions relating to the disposition and management of such properties as the
Liquidator deems reasonable and equitable and to any agreements governing the
operation of such properties at such time. The Liquidator shall determine the
fair market value of any property distributed in kind using such reasonable
method of valuation as it may adopt.
12.3 COMPLIANCE WITH TIMING REQUIREMENTS OF REGULATIONS; ALLOWANCE FOR
CONTINGENT OR UNFORESEEN LIABILITIES OR OBLIGATIONS. Notwithstanding anything to
the contrary in this Agreement, in the event the Partnership is "liquidated"
within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g), distributions
shall be made pursuant to this Article 13 to the General Partner and Limited
Partners who have positive Capital Accounts in compliance with Regulations
Section 1.704-1(b)(2)(ii)(b)(2) (including any tuning requirements therein).
Except as provided in Section 13.4, if any Limited Partner has a deficit balance
in his Capital Account (after giving effect to all contributions, distributions
and allocations for all taxable years, including the year during which such
liquidation occurs), such Partner shall have no obligation to make any
contribution to the capital of the Partnership with respect to such deficit, and
such deficit shall not be considered a debt owed to the Partnership or to any
other Person for any purpose whatsoever. In the sole and absolute discretion of
the General Partner, a pro rata portion of the distributions that would
otherwise be made to the General Partner and Limited Partners pursuant to this
Article 13 may be: (i) distributed to a liquidating trust established for the
benefit of the General Partner and Limited Partners for the purposes of
liquidating Partnership assets, collecting amounts owed to the Partnership, and
paving any contingent or unforeseen liabilities or obligations of the
Partnership or of the General Partner arising out of or in connection with the
Partnership (the assets of any such trust shall be distributed to the General
Partner and Limited Partners from time to time, un the reasonable discretion of
the General Partner, in the same proportions as the amount distributed to such
trust by the Partnership would otherwise have been distributed to the General
Partner and Limited Partners pursuant to this Agreement); or (ii) withheld to
provide a reasonable reserve for Partnership liabilities (contingent or
otherwise) and to reflect the unrealized portion of any installment obligations
owed to the Partnership; PROVIDED, that such withheld amount shall be
distributed to the General Partner and Limited Partners as soon as practicable.
37
12.4 DEFICIT CAPITAL ACCOUNT RESTORATION.
(a) Subject to Section 13.4(b), if a Class A Limited Partner listed on
Schedule 13.4(a) (an "Electing Partner") has a negative balance in his Capital
Account on the date of the "liquidation" of his interest in the Partnership
(within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g) but excluding a
constructive liquidation resulting from a tax termination of the Partnership
under Section 708(b)(1)(B) of the Code)), then such Electing Partner shall
contribute in cash to the capital of the Partnership the lesser of (i) the
maximum amount (if any such maximum amount is stated) listed beside such
Electing Partner's name on Schedule 13.4(a) or (ii) the amount required to
increase his Capital Account as of such date to zero. Any such contribution
required of a Partner hereunder shall be made on or before the later of (i) the
end of the Partnership Year in which the interest of such Partner is liquidated
or (ii) the ninetieth (90th) day following the date of such liquidation.
Notwithstanding any provision hereof to the contrary, all amounts so contributed
by a Partner to the capital of the Partnership shall, upon the liquidation of
the Partnership under this Article 13, be first paid to any then creditors of
the Partnership, including Partners that are Partnership creditors (in the order
provided in Section 1 3.2(a)), and any remaining amount shall be distributed to
the other Partners then having positive balances in their respective Capital
Accounts in proportion to such positive balances.
(b) After the death of an Electing Partner, the executor of the estate
of such an Electing Partner may elect to reduce (or eliminate) the deficit
Capital Account restoration obligation of such an Electing Partner. Such
election may be made by such executor by delivering to the General Partner
within two hundred seventy (270) days of the death of such an Electing Partner a
written notice setting forth the maximum deficit balance in his Capital Account
that such executor agrees to restore under Section 13.4(a), if any. If such
executor does not make a timely election pursuant to this Section 13.4(b)
(whether or not the balance in his Capital Account is negative at such time),
then such Electing Partner's estate (and the beneficiaries thereof who receive
distributions of Partnership Units therefrom) shall be deemed to have a deficit
Capital Account restoration obligation as set forth under Section 13.4(a).
(c) If the General Partner, on the date of the "liquidation" of its
interest in the Partnership, within the meaning of Regulations Section 1.704-1
(b)(2)(ii)(g) (but excluding a constructive liquidation resulting from a tax
termination of the Partnership under Section 708(b)(1)(B) of the Code), has a
negative balance in its Capital Account, then the General Partner shall
contribute in cash to the capital of the Partnership the amount needed to
restore its Capital Account balance to zero. Any such contribution shall be made
by the General Partner on or before the later of (i) the end of the Partnership
Year in which the General Partner's interest is liquidated, or (ii) the
ninetieth (90th) calendar day following the date of such liquidation.
Notwithstanding any provision of this Agreement to the contrary, all amounts so
contributed to the capital of the Partnership in accordance with this Section
13.4 shall be distributed in accordance with Section 13.2(a).
12.5 DEEMED DISTRIBUTION AND RECONTRIBUTION. Notwithstanding any other
provision of this Article 13 (but subject to Section 13.3), in the event the
Partnership is liquidated within the meaning of Regulations Section
1.704-l(b)(2)(ii)(g) but no Event of Dissolution has occurred, the Partnership's
property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged, and the Partnership's affairs shall not be wound up.
Instead, the Partnership shall be deemed to have distributed the Property in
kind to the General Partner and Limited Partners, who shall be deemed to have
assumed and taken such property subject to all Partnership liabilities, all in
accordance with their respective Capital Accounts. Immediately thereafter, the
General Partner and Limited Partners shall be deemed to have recontributed the
Partnership property in kind to the Partnership, which shall be deemed to have
assumed and taken such property subject to all such liabilities.
12.6 RIGHTS OF LIMITED PARTNERS. Except as specifically provided in this
Agreement, each Limited Partner shall look solely to the assets of the
Partnership for the return of his Capital Contribution and shall have no right
or power to demand or receive property other than cash from the Partnership
Except as specifically provided in this Agreement, no Limited Partner shall have
priority over any other Limited Partner as to the return of his Capital
Contributions, distributions, or allocations.
12.7 NOTICE OF DISSOLUTION. In the event an Event of Dissolution or an
event occurs that would, but for the provisions of Section 13.1, result in a
dissolution of the Partnership, the General Partner shall within 30 days
thereafter, provide written notice thereof to each of the Partners and to all
other parties with whom the Partnership
38
regularly conducts business (as determined in the sole and absolute discretion
of the General Partner) and shall publish notice thereof in a newspaper of
general circulation in each place in which the Partnership regularly conducts
business (as determined in the sole and absolute discretion of the General
Partner).
12.8 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP. Upon the
completion of the liquidation of the Partnership as provided in Section 13.2
hereof, the Partnership shall be terminated and the Certificate and all
qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the State of Tennessee shall be canceled and such other
actions as may be necessary to terminate the Partnership shall be taken.
12.9 REASONABLE TIME FOR WINDING-UP. A reasonable time shall be allowed
for the orderly winding-up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 13.2 hereof, in order to
minimize any losses otherwise attendant upon such winding-up, and the provisions
of this Agreement shall remain in effect between the Partners during the period
of liquidation.
ARTICLE 13
GENERAL PROVISIONS
13.1 NOTICES. All communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or upon deposit in the United States mail, registered,
postage prepaid return receipt requested, to the Partners at the addresses set
forth in the transfer records of the Partnership, and with respect to the
General Partner, at 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxx, 00000;
provided, however, that any Partner may specify a different address by notifying
the General Partner in writing of such different address. Notices to the
Partnership shall be delivered at or mailed to its specified office.
13.2 SUCCESSORS. Subject to the provisions hereof limiting transfers,
this Agreement shall be binding upon and inure to the benefit of the Partners
and the Partnership and their respective legal representatives, successors,
transferees and assigns.
13.3 ADDITIONAL DOCUMENTS. Each Partner agrees to perform all further
acts and execute, swear to, acknowledge and deliver all further documents which
may be reasonable, necessary, appropriate or desirable to carry out the
provisions of this Agreement or the Act.
13.4 SEVERABILITY. If any provision of this Agreement shall be declared
illegal, invalid, or unenforceable in any jurisdiction, then such provision
shall be deemed to be severable from this Agreement (to the extent permitted by
law) and in any event such illegality, invalidity or unenforceability shall not
affect the remainder hereof.
13.5 ENTIRE AGREEMENT. This Agreement and exhibits attached hereto
constitute the entire Agreement of the Partners and supersede all prior written
agreements and prior and contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.
13.6 PRONOUNS AND PLURALS. When the context in which words are used in
the Agreement indicates that such is the intent, words in the singular number
shall include the plural and the masculine gender shall include the neuter or
female gender as the context may require.
13.7 HEADINGS. The Article headings or sections in this Agreement are
for convenience only and shall not be used in construing the scope of this
Agreement or any particular Article.
13.8 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original copy and all of
which together shall constitute one and the same instrument binding on all
parties hereto, notwithstanding that all parties shall not have signed the same
counterpart.
13.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.
39
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures, as of the ___ day of November, 1997.
GENERAL PARTNER:
MID-AMERICA APARTMENT COMMUNITIES, INC., a
Tennessee corporation
By:
----------------------------------------
President
40
MID-AMERICA APARTMENTS, L.P.
EXHIBIT A TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
NOTICE OF EXERCISE OF REDEMPTION RIGHT
The undersigned hereby irrevocably (i) presents for redemption ________
Partnership Units in Mid-America Apartments, L.P. in accordance with the terms
of the Limited Partnership Agreement of Mid-America Apartments, L.P. and the
Redemption Right referred to in Section 8.05 thereof, (ii) represents that the
undersigned owns the Units so presented free and clear of all liens, claims and
encumbrances whatsoever, (iii) represents that the undersigned possess the
necessary capacity, power and authority to present the Units for redemption
hereunder and to transfer the Units, (iv) surrenders such Units and all right,
title and interest therein and to any and all proceeds therefrom (other than the
Redemption Amount attributable to the Units, as defined in the Partnership
Agreement, and (v) directs that the Redemption Amount, as determined pursuant to
the Partnership Agreement, deliverable upon exercise of the Redemption Right be
delivered to the address specified below.
Dated:
-------------
Name of Limited Partner:
---------------------------------------
(Signature of Limited Partner)
---------------------------------------
(Mailing Address)
---------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
---------------------------------------
ACCEPTED:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Exhibit A - 1
MID-AMERICA APARTMENTS, L.P.
SCHEDULE 4.2(b)(1) TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
DESIGNATION OF 9.5% SERIES A CUMULATIVE PREFERRED UNITS
(i) DESIGNATION AND NUMBER. A series of Preferred Units, designated the
"9.5% Series A Cumulative Preferred Units" (the "Series A Preferred
Units"), is hereby established. The number of Series A Preferred
Units shall be 2,000,000.
(ii) MATURITY. The Series A Preferred Units have no stated maturity and
will not be subject to any sinking fund or mandatory redemption.
(iii) RANK. The Series A Preferred Units will, with respect to
distribution rights and rights upon liquidation, dissolution or
winding up of the Partnership, rank (A) senior to all classes or
series of Common Units of the Partnership, and to all Partnership
Interests ranking junior to the Series A Preferred Units with
respect to distribution rights or rights upon liquidation,
dissolution or winding up of the Partnership; (B) on a parity with
all Partnership Interests issued by the Partnership the terms of
which specifically provide that such Partnership Interests rank on
a parity with the Series A Preferred Units with respect to
distribution rights or rights upon liquidation, dissolution or
winding up of the Partnership; and (C) junior to all existing and
future indebtedness of the Partnership. The term "Partnership
Interests" does not include convertible debt securities, which will
rank senior to the Series A Preferred Units prior to conversion.
(iv) DISTRIBUTIONS
(A) Holders of the Series A Preferred Units are entitled to receive, when
and as declared by the General Partner out of funds legally available for the
payment of distributions, preferential cumulative cash distributions at the rate
of 9.5% per annum of the Liquidation Preference (as defined below) per Series A
Preferred Unit (equivalent to a fixed annual amount of $2.375 per Series A
Preferred Unit). Distributions on the Series A Preferred Units shall be
cumulative from the date of original issue and shall be payable monthly in
arrears on or before the 15th day of each month, or, if not a business day, the
next succeeding business day (each, a "Distribution Payment Date"). The first
distribution, which will be paid on November 15, 1996, will be for less than a
full month. Such distribution and any distribution payable on the Series A
Preferred Units for any partial distribution period will be computed on the
basis of a 360-day year consisting of twelve 30-day months. Distributions will
be payable to holders of record as they appear in the ownership records of the
Partnership at the close of business on the applicable record date, which shall
be the first day of the calendar month in which the applicable Distribution
Payment Date falls or on such other date designated by the General Partner of
the Partnership for the payment of distributions that is not more than 30 nor
less than 10 days prior to such Distribution Payment Date (each, a "Distribution
Record Date").
(B) No distribution on Series A Preferred Units shall be 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 Partnership, including any
agreement relating to its indebtedness, prohibits such declaration, payment or
setting apart for payment or provides that such declaration, payment or setting
apart for payment would constitute a breach thereof or a default thereunder, or
if such declaration or payment shall be restricted or prohibited by law.
(C) Notwithstanding the foregoing, distributions on the Series A Preferred
Units will accrue whether or not the Partnership has earnings, whether or not
there are funds legally available for the payment of such distributions and
whether or not such distributions are declared. Accrued but unpaid distributions
on the Series A Preferred Units will not bear interest and holders of the Series
A Preferred Units will not be entitled to any distribution in excess of full
cumulative distributions described above. Except as set forth in the next
sentence, no distribution will be declared or paid or set apart for payment on
any Partnership Interest or any other series of Preferred Units ranking, as to
distributions, on a parity with or junior to the Series A Preferred Units (other
than a distribution of the Partnership's Common Units or any other class of
Partnership Interests ranking junior to the Series A Preferred Units as to
distributions and upon liquidation) for any period unless full cumulative
distributions have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof is set apart for such payment on
the Series A Preferred Units for all past distribution periods and the then
current distribution
Schedule 4.2(b)(1) - 1
period. When distributions are not paid in full (or a sum sufficient for such
full payment is not so set apart) upon the Series A Preferred Units and any
other series of Preferred Units ranking on a parity as to distributions with the
Series A Preferred Units, all distributions declared upon the Series A Preferred
Units and any other series of Preferred Units ranking on a parity as to
distributions with the Series A Preferred Units shall be declared pro rata so
that the amount of distributions declared per Series A Preferred Unit and such
other series of Preferred Units shall in all cases bear to each other the same
ratio that accrued distributions per Series A Preferred Unit and such other
series of Preferred Units (which shall not include any accrual in respect of
unpaid distributions for prior distribution periods if such Preferred Units does
not have a cumulative distribution) bear to each other.
(D) Except as provided in the immediately preceding paragraph, unless full
cumulative distributions on the Series A Preferred Units have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for payment for all past distribution periods and
the then current distribution period, no distribution (other than in Common
Units or other Partnership Interests ranking junior to the Series A Preferred
Units as to distributions and upon liquidation) shall be declared or paid or set
aside for payment nor shall any other distribution be declared or made upon the
Common Units, or any other Partnership Interest in the Partnership ranking
junior to or on a parity with the Series A Preferred Units as to distributions
or upon liquidation, nor shall any Common Unit, or any other Partnership
Interest in the Partnership ranking junior to or on a parity with the Series A
Preferred Units as to distributions or upon liquidation be redeemed, purchased
or otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such shares) by the
Partnership. Holders of Series A Preferred Units shall not be entitled to any
distribution, whether payable in cash, property or securities, in excess of full
cumulative distributions on the Series A Preferred Units as provided above. Any
distribution payment made on Series A Preferred Units shall first be credited
against the earliest accrued but unpaid distribution due with respect to such
Series A Preferred Units which remains payable.
(v) LIQUIDATION PREFERENCE. Upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Partnership, the holders of Series A Preferred Units are entitled
to be paid out of the assets of the Partnership legally available
for distribution to its partners a liquidation preference of $25
per Series A Preferred Unit (the "Liquidation Preference"), plus an
amount equal to any accrued and unpaid distribution to the date of
payment, but without interest, before any distribution of assets is
made to holders of Common Units or any other class or series of
Partnership Interests in the Partnership that ranks junior to the
Series A Preferred Units as to liquidation rights. The Partnership
will promptly provide to the holders of Series A Preferred Units
written notice of any event triggering the right to receive such
Liquidation Preference. After payment of the full amount of the
Liquidation Preference, plus any accrued and unpaid distributions
to which they are entitled, the holders of Series A Preferred Units
will have no right or claim to any of the remaining assets of the
Partnership. The consolidation or merger of the Partnership with or
into any other partnership, corporation, trust or entity or of any
other partnership or corporation with or into the Partnership, or
the sale, lease or conveyance of all or substantially all of the
property or business of the Partnership, shall not be deemed to
constitute a liquidation, dissolution or winding up of the
Partnership.
(vi) REDEMPTION.
(A) The Series A Preferred Units are not redeemable prior to November 1,
2001. On and after November 1, 2001, the Partnership, at its option upon not
less than 30 nor more than 60 days' written notice, may redeem the Series A
Preferred Units, in whole or in part, at any time or from time to time, for cash
at a redemption price of $25 per Series A Preferred Unit, plus all accrued and
unpaid distributions thereon to the date fixed for redemption, without interest.
Holders of Series A Preferred Units to be redeemed shall surrender such Series A
Preferred Units at the place designated in such notice and shall be entitled to
the redemption price and all accrued and unpaid distributions payable upon such
redemption following such surrender. If notice of redemption of any Series A
Preferred Unit has been given and if the funds necessary for such redemption
have been set aside by the Partnership in trust for the benefit of the holders
of any Series A Preferred Unit so called for redemption, then from and after the
redemption date distributions will cease to accrue on such Series A Preferred
Units, such Series A Preferred Units shall no longer be deemed outstanding and
all rights of the holders of such series A Preferred Units will terminate,
except the right to receive the redemption price. If less than all of the
outstanding Series A Preferred Units are to be redeemed, the Series A Preferred
Units to be redeemed shall be selected pro rata (as nearly as may be practicable
Schedule 4.2(b)(1) - 2
without creating fractional Series A Preferred Units) or by any other equitable
method determined by the General Partner.
(B) Unless full cumulative distributions on all Series A Preferred Units
shall have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for all past
distribution periods and the then current distribution period, no Series A
Preferred Units shall be redeemed unless all outstanding Series A Preferred
Units are simultaneously redeemed and the Partnership shall not purchase or
otherwise acquire directly or indirectly any Series A Preferred Units (except by
exchange for Partnership Interests of the Partnership ranking junior to the
Series A Preferred Units as to distributions and upon liquidation); provided,
however, that the foregoing shall not prevent the purchase or acquisition of
Series A Preferred Units pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Series A Preferred Units.
(C) Notice of redemption will be given by publication in a newspaper of
general circulation in the City of New York, such publication to be made once a
week for two successive weeks commencing not less than 30 nor more than 60 days
prior to the redemption date. A similar notice will be mailed by the
Partnership, postage prepaid, not less than 30 nor more than 60 days prior to
the redemption date, addressed to the respective holders of record of the Series
A Preferred Units to be redeemed at their respective addresses as they appear on
the stock transfer records of the Partnership. No failure to give such notice or
any defect therein or in the mailing thereof shall affect the validity of the
proceedings for the redemption of any Series A Preferred Units except as to the
holder to whom notice was defective or not given. Each notice shall state: (i)
the redemption date; (ii) the redemption price; (iii) the number of Series A
Preferred Units to be redeemed; (iv) the place or places where the Series A
Preferred Units are to be surrendered for payment of the redemption price; and
(v) that distributions on the shares to be redeemed will cease to accrue on such
redemption date. If less than all of the Series A Preferred Units held by any
holder are to be redeemed, the notice mailed to such holder shall also specify
the number of Series A Preferred Units held by such holder to be redeemed.
(D) Immediately prior to any redemption of Series A Preferred Units, the
Partnership shall pay, in cash, any accumulated and unpaid distributions through
the redemption date, unless a redemption date falls after a Distribution Record
Date and prior to the corresponding Distribution Payment Date, in which case
each holder of Series A Preferred Units at the close of business on such
Distribution Record Date shall be entitled to the distribution payable on such
shares on the corresponding Distribution Payment Date notwithstanding the
redemption of such shares before such Distribution Payment Date.
(vii) VOTING RIGHTS. Holders of the Series A Preferred Units will not
have any voting rights.
(viii) CONVERSION. The Series A Preferred Units are not redeemable for,
convertible into or exchangeable for any other property or securities of the
Partnership.
Schedule 4.2(b)(1) - 3
MID-AMERICA APARTMENTS, L.P.
SCHEDULE 4.2(b)(2) TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
DESIGNATION OF 8 7/8% SERIES B CUMULATIVE PREFERRED UNITS
(i) DESIGNATION AND NUMBER. A series of Preferred Units, designated the
"8 7/8% Series B Cumulative Preferred Units" (the "Series B
Preferred Units"), is hereby established. The number of Series B
Preferred Units shall be up 1,938,830
(ii) MATURITY. The Series B Preferred Units have no stated maturity and
will not be subject to any sinking fund or mandatory redemption.
(iii) RANK. The Series B Preferred Units, with respect to distribution
rights and rights upon liquidation, dissolution or winding up of
the Partnership, will rank (i) senior to all classes or series of
Common Units of the Partnership, and to all Partnership Interests
ranking junior to the Series B Preferred Units with respect to
distribution rights or rights upon liquidation, dissolution or
winding up of the Partnership; (ii) on a parity with all
Partnership Interests issued by the Partnership the terms of which
specifically provide that such Partnership Interests rank on a
parity with the Series B Preferred Units with respect to
distribution rights or rights upon liquidation, dissolution or
winding up of the Partnership (the "Parity Preferred Units"); and
(iii) junior to all existing and future indebtedness of the
Partnership. The term "Parity Preferred Units" does not include
convertible debt securities, which will rank senior to the Series B
Preferred Units prior to conversion.
(iv) DISTRIBUTIONS
(A) Holders of the Series B Preferred Units are entitled to receive,
when and as declared by the General Partner out of funds legally available for
the payment of distributions, preferential cumulative cash distributions at the
rate of 8?% per annum of the Liquidation Preference (as defined below) per
Series B Preferred Unit (equivalent to a fixed annual amount of $2.21875 per
Series B Preferred Unit). Distributions on the Series B Preferred Units shall be
cumulative from the date of original issue and shall be payable monthly in
arrears on or before the 15th day of each month, or, if not a business day, the
next succeeding business day (each, a "Distribution Payment Date"). The first
distribution, which will be payable on December 15, 1997, will be for less than
a full month. Such distribution and any distribution payable on the Series B
Preferred Units for any partial distribution period will be computed on the
basis of a 360-day year consisting of twelve 30-day months. Distributions will
be payable to holders of record as they appear in the ownership records of the
Partnership at the close of business on the applicable record date, which shall
be the first day of the calendar month in which the applicable Distribution
Payment Date falls or on such other date designated by the General Partner of
the Partnership for the payment of distributions that is not more than 30 nor
less than 10 days prior to such Distribution Payment Date (each, a "Distribution
Record Date").
(B) No distributions on Series B Preferred Units shall be 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 Partnership, including
any agreement relating to its indebtedness, prohibits such declaration, payment
or setting apart for payment or provides that such declaration, payment or
setting apart for payment would constitute a breach thereof or a default
thereunder, or if such declaration or payment shall be restricted or prohibited
by law.
(C) Notwithstanding the foregoing, distributions on the Series B
Preferred Units will accrue whether or not the Partnership has earnings, whether
or not there are funds legally available for the payment of such distributions
and whether or not such distributions are declared. Accrued but unpaid
distributions on the Series B Preferred Units will not bear interest and holders
of the Series B Preferred Units will not be entitled to any distributions in
excess of full cumulative distributions described above. Except as set forth in
the next sentence, no distributions will be declared or paid or set apart for
payment on any Partnership Interests or any other series of Parity Preferred
Units or any series or class of equity securities ranking junior to the Series B
Preferred Units (other
Schedule 4.2(b)(2) - 1
than a distribution of the Partnership's Common Units or any other class of
Partnership Interests ranking junior to the Series B Preferred Units as to
distributions and upon liquidation) for any period unless full cumulative
distributions have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof is set apart for such payment on
the Series B Preferred Units for all past distribution periods and the then
current distribution period. When distributions are not paid in full (or a sum
sufficient for such full payment is not so set apart) upon the Series B
Preferred Units and any other series of Parity Preferred Units, all
distributions declared upon the Series B Preferred Units and any other series of
Parity Preferred Units shall be declared pro rata so that the amount of
distributions declared per Series B Preferred Unit and such other series of
Parity Preferred Units shall in all cases bear to each other the same ratio that
accrued distributions per Series B Preferred Unit and such other series of
Parity Preferred Units (which shall not include any accrual in respect of unpaid
distributions for prior distribution periods if such Parity Preferred Units does
not have a cumulative distribution) bear to each other.
(D) Except as provided in the immediately preceding paragraph, unless
full cumulative distributions on the Series B Preferred Units have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for payment for all past distribution periods and
the then current distribution period, no distributions (other than in Common
Units or other Partnership Interests ranking junior to the Series B Preferred
Units as to distributions and upon liquidation) shall be declared or paid or set
aside for payment nor shall any other distribution be declared or made upon the
Common Units, or any other Partnership Interests in the Partnership ranking
junior to or on a parity with the Series B Preferred Units as to distributions
or upon liquidation, nor shall any Common Units, or any other Partnership
Interests in the Partnership ranking junior to or on a parity with the Series B
Preferred Units as to distributions or upon liquidation be redeemed, purchased
or otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such shares) by the
Partnership. Holders of Series B Preferred Units shall not be entitled to any
distribution, whether payable in cash, property or securities, in excess of full
cumulative distributions on the Series B Preferred Units as provided above. Any
distribution payment made on Series B Preferred Units shall first be credited
against the earliest accrued but unpaid distribution due with respect to such
Series B Preferred Units which remains payable.
(v) LIQUIDATION PREFERENCE. Upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Partnership, the holders of Series B Preferred Units are entitled
to be paid out of the assets of the Partnership legally available
for distribution to its partners a liquidation preference of $25
per Series B Preferred Unit (the "Liquidation Preference"), plus an
amount equal to any accrued and unpaid distributions to the date of
payment, but without interest, before any distribution of assets is
made to holders of Common Units or any other class or series of
Partnership Interests in the Partnership that ranks junior to the
Series B Preferred Units as to liquidation rights. The Partnership
will promptly provide to the holders of Series B Preferred Units
written notice of any event triggering the right to receive such
Liquidation Preference. After payment of the full amount of the
Liquidation Preference, plus any accrued and unpaid distributions
to which they are entitled, the holders of Series B Preferred Units
will have no right or claim to any of the remaining assets of the
Partnership. The consolidation or merger of the Partnership with or
into any other partnership, corporation, trust or entity or of any
other partnership or corporation with or into the Partnership, or
the sale, lease or conveyance of all or substantially all of the
property or business of the Partnership, shall not be deemed to
constitute a liquidation, dissolution or winding up of the
Partnership.
(vi) REDEMPTION.
(A) The Series B Preferred Units are not redeemable prior to
December 1, 2002. On and after December 1, 2002, the Partnership, at its option
upon not less than 30 nor more than 60 days' written notice, may redeem the
Series B Preferred Units, in whole or in part, at any time or from time to time,
for cash at a redemption price of $25 per Series B Preferred Unit, plus all
accrued and unpaid distributions thereon to the date fixed for redemption,
without interest. Holders of Series B Preferred Units to be redeemed shall
surrender such Series B Preferred Units at the place designated in such notice
and upon such surrender shall be entitled to the redemption price and any
accrued and unpaid distributions payable upon such redemption. If notice of
redemption of any Series B Preferred Units has been given and if the funds
necessary for such redemption have been set aside by the Partnership in trust
for the benefit of the holders of any Series B Preferred Units so called for
redemption, then from
Schedule 4.2(b)(2) - 2
and after the redemption date distributions will cease to accrue on such
Series B Preferred Units, such Series B Preferred Units shall no longer be
deemed outstanding and all rights of the holders of such series B Preferred
Units will terminate, except the right to receive the redemption price. If less
than all of the outstanding Series B Preferred Units are to be redeemed, the
Series B Preferred Units to be redeemed shall be selected pro rata (as nearly as
may be practicable without creating fractional Series B Preferred Units) or by
any other equitable method determined by the General Partner.
(B) Unless full cumulative distributions on all Series B Preferred
Units shall have been or contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof set apart for payment for all past
distribution periods and the then current distribution period, no Series B
Preferred Units shall be redeemed unless all outstanding Series B Preferred
Units are simultaneously redeemed and the Partnership shall not purchase or
otherwise acquire directly or indirectly any Series B Preferred Units (except by
exchange for Partnership Interests of the Partnership ranking junior to the
Series B Preferred Units as to distributions and upon liquidation); provided,
however, that the foregoing shall not prevent the purchase or acquisition of
Series B Preferred Units pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Series B Preferred Units.
(C) Notice of redemption will be given by publication in a newspaper of
general circulation in the City of New York, such publication to be made once a
week for two successive weeks commencing not less than 30 nor more than 60 days
prior to the redemption date. A similar notice will be mailed by the
Partnership, postage prepaid, not less than 30 nor more than 60 days prior to
the redemption date, addressed to the respective holders of record of the
Series B Preferred Units to be redeemed at their respective addresses as they
appear on the transfer records of the Partnership. No failure to give such
notice or any defect therein or in the mailing thereof shall affect the validity
of the proceedings for the redemption of any Series B Preferred Units except as
to the holder to whom notice was defective or not given. Each notice shall
state: (i) the redemption date; (ii) the redemption price; (iii) the number of
Series B Preferred Units to be redeemed; (iv) the place or places where the
Series B Preferred Units are to be surrendered for payment of the redemption
price; and (v) that distributions on the shares to be redeemed will cease to
accrue on such redemption date. If less than all of the Series B Preferred Units
held by any holder are to be redeemed, the notice mailed to such holder shall
also specify the number of Series B Preferred Units held by such holder to be
redeemed.
(D) Immediately prior to any redemption of Series B Preferred Units,
the Partnership shall pay, in cash, any accumulated and unpaid distributions
through the redemption date, unless a redemption date falls after a Distribution
Record Date and prior to the corresponding Distribution Payment Date, in which
case each holder of Series B Preferred Units at the close of business on such
Distribution Record Date shall be entitled to the distribution payable on such
shares on the corresponding Distribution Payment Date notwithstanding the
redemption of such shares before such Distribution Payment Date.
(vii) VOTING RIGHTS. Holders of the Series B Preferred Units will not
have any voting rights.
(viii) CONVERSION. The Series B Preferred Units are not redeemable for,
convertible into or exchangeable for any other property or securities of the
Partnership.
Schedule 4.2(b)(2) - 3
MID-AMERICA APARTMENTS, L.P.
SCHEDULE 6.11(f) TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
LIST OF XXXXXXXX PROPERTIES SUBJECT TO RESTRICTIONS ON SALE
All of the "Properties" described in that certain Agreement and Plan of
Reorganization, dated September 17, 1997, by and among the Partnership, the
General partner and Xxxxxxxx Development Company, a Georgia corporation, as
amended by that certain First Amendment to Agreement and Plan of Reorganization
of even date herewith (the "
Reorganization Agreement"), excluding the "Sole
Properties" and "Surviving Cash-Out Properties" described in the
Reorganization
Agreement.
Schedule 6.11(f) - 1
MID-AMERICA APARTMENTS, L.P.
SCHEDULE 13.4(a) TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
CLASS A LIMITED PARTNERS WITH DEFICIT CAPITAL
ACCOUNT RESTORATION OBLIGATIONS AND MAXIMUM
AMOUNT OF OBLIGATION, IF ANY
PARTNER LIMITATION
------- -----------
Xxxxx, Xxxxxxxx $ 139,429
Xxxxxx, Xxxx 70,102
Xxxxx, Armour 10,000
Xxxxx, Xxxxxx 10,000
Xxxxxxxx, Xxxxxxxx 25,000
Xxxxx, Xxxxxx X. 418,899
Xxxxxxxxx, Xxxxx and Xxxxx 46,371
Xxxxxxx, Xxxxxx 270,272
Xxxxxxx, Xxxxx X. 110,772
Xxxxxxxx, Xxxxxxx 269,788
Xxxx X. Xxxxxxxx 5,000,000
Xxxxxxxx, Xxxxxx X. 10,000
Xxxxxxxx, Dr. Xxxxxx 70,127
Xxxxx, Xxxxx 159,729
Xxxxxxx, Xxxxx X. 118,827
Xxxxxx, Xxxxxx 269,786
Xxxxx, Xxxxx Xx. 70,127
Xxxxxxxx, Xxxxx X. 70,127
W. Xxxxxxx Xxxxx 250,000
Xxxxxxxxx, Xxxxxx 47,625
Xxxxxxx, Xxxxx X. 10,000
Xxx, Xxxxxxx 158,654
Markus, Xx. Xxxxx X. 25,000
Xxxxxxx, Xxxx X. 422,357
XxXxxxxx, Xxxxx 621,666
XxXxxxxx, J. Xxx 621,666
XxXxxxxxx, Xxxxxxx 944,980
Xxxxxxx, Xx. Xxxxxxx 125,468
Xxxxxxxxxxx, X.X. 810,330
Xxxxxx, Xxxx 158,654
Xxxxxx, X'Xxxxxx 1,600,000
Park, Xxxxxx 10,000
Xxxxxx, Xxxxxx X. 10,000
Xxxxxxx, Xx. Xxxxx X. 10,000
Xxxxx, Xxxx X. 10,000
Xxxxxxx, Xxxxxx 325,938
Xxxxxxxx, Xxxxxxxxx X. 30,000
Xxxxxxx, Xxxxx X. 10,000
Xxxxxx, Xxxxx 269,786
Xxxxxxxxx, Xx. Xxxxxxx 50,000
Xxxxxx, Xx. Xxxxx X. 47,626
Xxxxxxxx, Xxxxxx 25,000
Xxxxxx, Xxxxxx 527,407
Xxxxxx, Xxxxxxx X. 46,371
Xxxxxx, Xxxxxx X. 1,293,687
Xxxxxx, Xxxxxx X. Xx. 96,373
Xxxxxx, G.B. 62,501
-----------
$15,760,443
Schedule 13.4(a) - 1
