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EXHIBIT 10.1
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
THE LIMITED PARTNERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN
REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, THE MICHIGAN UNIFORM
SECURITIES ACT OR THE SECURITIES LAWS OF ANY OTHER STATE. SUCH INTERESTS MAY
NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OR EXEMPTION THEREFROM.
TRANSFER OF SUCH INTERESTS IS RESTRICTED BY THE PROVISIONS OF THIS AGREEMENT.
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TABLE OF CONTENTS
Page
1. Continuation of Partnership 1
2. Purposes 2
3. OP Units; Partners; Capital 2
3.1 OP Units 2
3.2 Common OP Units 2
3.3 Preferred OP Units 2
3.4 Partners 7
3.5 Capital Contributions 7
3.6 Issuance of OP Units 8
3.7 Exchange of Common OP Units 9
3.8 Adjustment of OP Units 10
3.9 Withdrawals 10
3.10 Borrowings 10
4. Capital Accounts; Profits and Losses; Distributions 10
4.1 Capital Accounts 10
4.2 Profits and Losses 11
4.3 Distributions 11
5. Rights and Obligations of Partners 12
5.1 Limited Partners 12
5.2 General Partner 12
5.3 Additional Partners 13
6. Administrative Powers, Obligations, Compensation,
Etc., of General Partner 13
6.1 Powers 13
6.2 Self-Dealing 14
6.3 Services; Compensation 14
6.4 Limitation of General Partner's Liability 14
6.5 Tax Matters Partner 15
6.6 Power of Attorney 15
6.7 Other Activities of General Partner 15
7. Term of Partnership 16
7.1 Commencement 16
7.2 Termination 16
8. Liquidation 16
8.1 Liquidation of Partnership 16
8.2 Liquidating Distributions; Restoration of Capital
Account Deficits 17
(i)
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9. Transferability of Interests 18
9.1 In General 18
9.2 Rights of Transferees 18
9.3 Restrictions on Transfers 18
10. Investment Representation 19
11. Amendments 19
12. Tax Allocations 19
12.1 General Rule 19
12.2 Book/Tax Differentials 19
12.3 Qualified Income Offset 20
12.4 Minimum Gain Chargeback 20
12.5 Section 754 Elections 20
12.6 Tax Credits 20
12.7 Depreciation Recapture 21
13. Miscellaneous Provisions 21
13.1 Books of Account; Reports 21
13.2 Bank Accounts and Investment of Funds 22
13.3 Accounting Decisions 22
13.4 Federal Income Tax Elections 22
13.5 Meetings of Partnership 22
13.6 Entire Agreement 22
13.7 Notices, Etc 22
13.8 Consent of Limited Partners 23
13.9 Further Execution 23
13.10 Submission to Michigan Jurisdiction 23
13.11 Benefits 23
13.12 Severability 24
13.13 Captions 24
13.14 Gender 24
13.15 Counterparts 24
13.16 Michigan Law to Control 24
14. Definitions 24
EXHIBIT A Schedule of Partners and OP Units A-1
EXHIBIT B Schedule of Additional OP Units 28
(ii)
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SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
------------------------------
THIS AGREEMENT is made at Farmington Hills, Michigan, as of April 30,
1996, among SUN COMMUNITIES, INC., a Maryland corporation, as General Partner,
and the persons designated as Limited Partners in Exhibit A, as Limited
Partners, who hereby agree as set forth herein. Certain terms used in this
Agreement are defined in Section 14.
PRELIMINARY STATEMENT
The Partnership is a limited partnership presently existing under Michigan
law and governed by a First Amended and Restated Limited Partnership Agreement
dated December 15, 1993, as amended by Amendments numbered One through
Twenty-Eight, inclusive. Said First Amended and Restated Limited Partnership
Agreement, as heretofore amended, is referred to herein as the "Former
Partnership Agreement." The Partners wish to amend and restate the Former
Partnership Agreement to provide, inter alia, for the creation of a new class
of OP Units, for the admission of additional Partners to the Partnership and
for the issuance of OP units to such additional Partners.
The Former Partnership Agreement provides that a majority in interest of
the Partners may amend the same. This Amendment has been executed and
delivered by a majority in interest of the Partners. Accordingly, the Former
Partnership Agreement is amended in its entirety and is restated to read as set
forth herein.
AGREEMENT
1. CONTINUATION OF PARTNERSHIP
The Partnership presently existing under the provisions of the Michigan
Revised Uniform Limited Partnership Act shall continue pursuant to the
provisions of this Agreement. The name of the Partnership is SUN COMMUNITIES
OPERATING LIMITED PARTNERSHIP, and its office shall be located at 00000
Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000, or such other
place as the General Partner may determine from time to time.
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2. PURPOSES
The Partnership is organized for the purpose of investing in real property
by acquiring, owning and operating manufactured housing communities and related
properties and assets; acquiring interests in other entities which own and
operate such properties; conducting businesses related to, associated with or
augmenting the Partnership's business of operating manufactured housing
communities, and owing interests in other entities which conduct such
businesses; holding its assets for investment, income and appreciation and
selling or otherwise disposing of the same; and doing all things incidental
thereto. In addition, the Partnership may engage in any and all activities
which could be conducted by a REIT, within the meaning of Section 856 of the
Internal Revenue Code.
3. OP UNITS; PARTNERS; CAPITAL
3.1 OP UNITS
The Partners' interests in the Partnership are expressed in terms of OP
Units, and each Partner has been issued OP Units corresponding to the agreed
value of its capital contribution. OP Units consist of Common OP Units and
Preferred OP Units.
3.2 COMMON OP UNITS
The holders of the Common OP Units shall be entitled to receive
distributions in accordance with Section 4.3, after payment of all accrued
Preferred Dividends. No distribution shall be made in respect of Common OP
Units while any accrued Preferred Dividends remain unpaid unless all such
accrued Preferred Dividends are paid simultaneously with such distribution.
3.3 PREFERRED OP UNITS
(a) Dividends. The holders of the Preferred OP Units shall be entitled to
receive, from funds which the General Partner determines to be available for
distribution as provided in Section 4.3, dividends ("Preferred Dividends") at
the rate of $1.89 per Preferred OP Unit annually. Preferred Dividends for each
year shall accrue in equal installments, on each record date for the payment of
quarterly distributions to holders of Common OP Units, and shall be paid when
such quarterly distributions are paid to Common OP Units holders of record as
of the accrual date; provided, however, that (i) if the payment date for
distributions to Common OP Unit holders is more than twenty (20) days after the
record date, the Preferred Dividends shall be paid on or before the twentieth
(20th) day following the record date, (ii) if distributions to holders of
Common OP Units are made less frequently than quarterly, then Preferred
Dividends shall accrue on each March 31, June 30, September 30 and December 31
and shall be paid within ten (10) days thereafter to holders of record as of
the accrual date, and (iii) if distributions to holders of Common OP Units
are made more frequently than quarterly, the Preferred Dividends shall accrue
at the same frequency that distributions are made to holders of Common OP Xxxxx,
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and (iv) the Preferred Dividend installment payable on the first Preferred
Dividend Accrual Date after issuance of a Preferred OP Unit shall be a prorated
portion of the regular dividend based on the number of
days elapsed from the date of issuance to the Preferred Dividend Accrual Date.
Each date upon which Preferred Dividends accrue is referred to as a "Preferred
Dividend Accrual Date." Each date upon which Preferred Dividends become
payable is referred to as a "Preferred Dividend Payment Date."
(b) Conversion Rights. The holders of the Preferred OP Units shall be
entitled to convert part or all of such OP Units into Common OP Units by
delivering written notice of such conversion ("Conversion Notice") to the
General Partner after April 30, 2002 and on or before 5:00 P.M. E.S.T. or
E.D.T. (as appropriate), May 31, 2002 (the "Conversion Period"). The terms of
the conversion shall be as follows:
(1) Preferred OP Units may be converted only in multiples of One
Hundred (100) unless the holder elects to convert all its Preferred OP
Units.
(2) The conversion shall be effective as of the close of business on
the day the Conversion Notice is delivered (the "Conversion Date"). The
holder of the converted OP Units shall be deemed to have surrendered the
same to the Partnership, and the Partnership shall be deemed to have
issued Common OP Units to such holder, at the close of business on the
Conversion Date.
(3) If the Issue Price of each Common OP Unit issued upon the
conversion is $31.50 or less, the holder shall be entitled to receive one
(1) Common OP Unit for each Preferred OP Unit surrendered. If the Issue
Price of each such Common OP Unit is more than that amount, the holder
shall be entitled to receive, for each Preferred OP Unit surrendered, a
fraction of a full Common OP Unit of which (i) the numerator is (A)
$31.50 plus (B) twenty-five per cent (25%) of the amount (if any) by
which the per-unit Issue Price of the Common OP Units exceeds $36.00, and
(ii) the denominator is the per-unit Issue Price of the Common OP Units.
(4) On the next Preferred Dividend Accrual Date, the holder shall be
entitled to a Preferred Dividend in an amount equal to a prorated portion
of the regular Preferred Dividend based on the number of days elapsed
from the prior Preferred Dividend Accrual Date to the Conversion Date.
(5) In the event that the holders of Common OP Units receive or
surrender any Common OP Units or other securities of or interests in the
Partnership pursuant to any Common OP Unit split, combination, dividend
or exchange, or pursuant to any recapitalization, merger, consolidation,
combination, exchange of shares or other similar capital change, then
upon the conversion each holder of Preferred OP Units shall be entitled
to receive, in lieu of or in addition to receiving Common OP Units, the
number and class of securities which it would have held on the Conversion
Date if it had
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originally acquired a number of Common OP Units equal to the number of
Preferred OP Units to be converted, instead of such Preferred OP Units.
(c) Consensual Redemption. The Partnership may redeem any part or all of
the Preferred OP Units from time to time as determined by the General Partner,
with the written consent of the holder of the Preferred OP Units to be
redeemed, provided that no such consensual redemption of fewer than all of the
Preferred OP Units shall be made while any accrued Preferred Dividends remain
unpaid unless all such accrued dividends are paid simultaneously with such
redemption.
(d) Mandatory Redemption. The Partnership shall redeem Preferred OP Units
five (5) Business Days after written demand of the holder during the existence
of any POPU Default provided that the POPU Default is not cured within such
period. The Partnership shall redeem all Preferred OP Units with respect to
which a Conversion Notice was not received during the Conversion Period, within
forty-five (45) days after the expiration of the Conversion Period.
(e) Redemption Payment. Upon redemption of a Preferred OP Unit the holder
shall be entitled to receive a redemption payment equal to the Issue Price of
such Preferred OP Unit plus all unpaid Preferred Dividends thereon accrued and
prorated to the time that the redemption payment is made as if such date were a
Preferred Dividend Accrual Date.
(f) POPU Credit Enhancement. The Partnership shall use diligent efforts
to secure its redemption obligation as set forth in Section 3.3(d) by a form of
security in favor of the holders of the Preferred OP Units which satisfies the
following requirements (the "POPU Credit Enhancement"):
(1) The POPU Credit Enhancement shall consist of a letter of credit,
surety bond, insurance, or other form of security satisfactory to the
holders of a majority of the Preferred OP Units.
(2) The provider of the POPU Credit Enhancement shall be a bank,
insurance company or other financial institution (i) which has senior
long-term unsecured debt outstanding with a credit rating, at the time
when the POPU Credit Enhancement is provided, which is equal to or better
than the higher of (A) the lowest credit rating for such debt of any of
the following financial institutions which is rated by a nationally
recognized rating agency: NBD Bank, Comerica Bank, First Michigan Bank,
Old Kent Bank, First of America Bank, or Michigan National Bank, or (B) a
Standard & Poors rating of A- or a comparable rating from another
nationally recognized rating agency, or (ii) which is approved in writing
by the holders of a majority of the Preferred OP Units.
(3) The POPU Credit Enhancement (i) shall be in an amount not less
than $38,287,810.00, (ii) shall be maintained for a continuous period
commencing when the same is obtained and ending not earlier than
September 13, 2002 or the earlier
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conversion or redemption of all the Preferred OP Units, (iii) may not be
terminated, cancelled or not renewed except upon at least sixty (60) days
prior written notice to the holders of the Preferred OP Units or an
agent selected by the holders of a majority of the Preferred OP Units,
and (iv) shall entitle the holder of a Preferred OP Unit, upon demand, to
payment of an amount equal to any mandatory redemption payment which is
not made when required by Section 3.3(d).
(4) The form of the POPU Credit Enhancement may be changed from time
to time with the written consent of the General Partner and the holders
of a majority of the Preferred OP Units, provided that the replacement
form of POPU Credit Enhancement is consistent with the requirements of
this Section 3.3(f).
The Partnership and the holders of the Preferred OP Units shall share the costs
of obtaining the POPU Credit Enhancement in equal shares, provided that neither
shall be required to pay more than $190,000.00 per year in that regard. If
such costs exceed that amount, then (i) the Partnership may nevertheless obtain
and maintain the POPU Credit Enhancement if it agrees to pay the excess cost,
(ii) the Partnership shall obtain and maintain the POPU Credit Enhancement if
the holders of a majority of the Preferred OP Units agree in writing that the
excess costs shall be paid by the holders of the Preferred OP Units, which
election shall be binding upon all the holders of Preferred OP Units, and
(iii) except as provided in Section 3.3(g) the Partnership shall not be
required to obtain or maintain the POPU Credit Enhancement if the excess cost
is not so provided for.
The Partnership shall withhold the POPU Credit Enhancement costs payable
by the holders of the Preferred OP Units from the Preferred Dividends otherwise
payable hereunder and shall apply the same to the payment of the costs of the
POPU Credit Enhancement. The Partnership shall use diligent efforts to obtain
the POPU Credit Enhancement as soon as reasonably possible.
(g) Loss of Credit Rating. If during the time that the POPU Credit
Enhancement is not in effect: (i) the Company's existing unsecured debt (or
unsecured debt comparable thereto) is outstanding and the Company fails to
maintain a credit rating for such debt of Standard & Poors Grade BBB- or
better, or a comparable investment grade rating of one or more nationally
recognized credit agencies, or (ii) such debt is not outstanding and the
Company fails to demonstrate to the reasonable satisfaction of the holders of a
majority of the Preferred OP Units that an issue of comparable unsecured debt
would receive such a credit rating, then within sixty (60) days after the
written request of the holders of a majority of the Preferred OP Units, the
Partnership shall (A) restore such credit rating, (B) obtain the POPU Credit
Enhancement in which event it shall be obligated to pay any excess cost
referred to in Section 3.3(f), or (C) provide other collateral, satisfactory to
the holders of a majority of the Preferred OP Units in the exercise of their
reasonable business judgement, to secure the Partnership's redemption
obligation as set forth in Section 3.3(d), and if the Partnership fails to do
so, such event shall constitute a POPU Default.
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(h) Method of Payment. All payments in respect of the Preferred OP Units
shall be made in good United States funds by ordinary bank check mailed to the
holder at its address as set forth in the Partnership's records. Payment shall
be effective upon deposit of the check in the mail with postage prepaid, for
all purposes of this Agreement, and the holders of the Preferred OP Units
hereby assume the risk of non-delivery. If a check is lost in the mail or in
any other manner, the holder shall be entitled to a replacement check upon
execution and delivery of an indemnity agreement, in form satisfactory to the
General Partner, whereby the holder indemnifies the Partnership against any
claim for payment of the replaced check.
(i) Restrictions on Subordination. During any period that the POPU Credit
Enhancement is not in effect, the Partnership shall not permit to be outstanding
any OP Units or other equity securities which are not junior to the Preferred OP
Units, without the written consent of the holders of a majority of the Preferred
OP Units. During any period that the POPU Credit Enhancement is in effect, the
Partnership shall not permit to be outstanding any OP Units or other equity
securities which are senior to the Preferred OP Units or which have any
preference over the Preferred OP Units as to dividends or redemption payments,
without the written consent of the holders of a majority of the Preferred OP
Units, although the Partnership may issue additional Preferred OP Units or other
classes of OP Units which have rights equal to those of the Preferred OP Units.
Notwithstanding the foregoing, the POPU Credit Enhancement shall secure only the
payments to the members of the Aspen Group in respect of those Preferred OP
Units issued upon execution of this Agreement or pursuant to Contribution
Agreements between the Partnership and such persons, and any credit enhancement
provided to holders of other OP Units shall be provided independent of the POPU
Credit Enhancement.
(j) Default Provisions. The following default provisions shall apply in
respect of the Preferred OP Units:
(1) If the Partnership fails to pay any Preferred Dividend
installment upon the Preferred Dividend Payment Date, the holders shall
be entitled to a late payment premium equal to two per cent (2%) of the
defaulted payment. If the Partnership fails to pay any Preferred
Dividend installment within ten (10) days after the Preferred Dividend
Payment Date, Preferred Dividends shall accrue at the rate of $2.70 per
Preferred OP Unit annually, retroactively from the Preferred Dividend
Payment Date until such installment is paid.
(2) The occurrence of any of the following shall constitute a "POPU
Default":
(i) The Partnership's failure to pay any Preferred Dividend
installment within twenty (20) days after the applicable Preferred
Dividend Payment Date;
(ii) The Partnership's failure to pay any redemption payment
when due;
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(iii) If the POPU Credit Enhancement is in effect, the
termination, cancellation or non-renewal of the POPU Credit
Enhancement, or notice of termination,
cancellation or non-renewal of the POPU Credit Enhancement, prior
to the conversion or redemption of all Preferred OP Units, unless
the Partnership complies with the provisions of Section 3.3(g);
(iv) If the POPU Credit Enhancement is in effect, the
insolvency or loss of creditworthiness of the provider of the POPU
Credit Enhancement unless the Partnership complies with the
provisions of Section 3.3(g);
(v) If the POPU Credit Enhancement is not in effect, the
Partnership's failure to provide the POPU Credit Enhancement or
other collateral as provided in Section 3.3(g) upon the occurrence
of the event specified therein; or
(vi) Any other default in the performance of the Partnership's
or the General Partner's obligations to the holders of the
Preferred OP Units under this Section 3.3 which is not cured within
thirty (30) days after written demand by any holder of Preferred OP
Units.
Upon the occurrence of a POPU Default the holders of the Preferred OP Units
shall have the rights provided for in Sections 3.3(d) and 3.3(f)(3) in addition
to any other rights provided by this Agreement or by applicable law. During
the existence of the POPU Default, Preferred Dividends shall accrue at the rate
of $2.70 per Preferred OP Unit annually. If any holder of Preferred OP Units
commences any legal action against the Partnership or the General Partner to
enforce its rights under this Section 3.3, the prevailing party shall be
entitled to recover the costs incurred in connection therewith, including
reasonable attorney fees.
3.4 PARTNERS
The names and addresses of the Partners, and their respective OP Units,
are set forth in Exhibit A. Additional OP Units may be issued from time to
time as permitted by this Agreement.
3.5 CAPITAL CONTRIBUTIONS
(a) The General Partner has contributed to the capital of the Partnership
an amount of cash equal to the number of OP Units issued to the General Partner
multiplied by the Issue Price
of such OP Units, and shall contribute certain other items of personal
property.
(b) The Limited Partners have made or shall make the capital contributions
to the Partnership provided for in the respective Contribution Agreements to
which they are parties.
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(c) The Partners shall not be required to make any additional capital
contributions to the Partnership, except that the General Partner shall apply
the proceeds realized from the sale of stock or securities issued by it (net of
offering expenses) to the purchase of additional OP Units in accordance with
this Agreement.
3.6 ISSUANCE OF OP UNITS
(a) The General Partner may cause the Partnership to issue additional OP
Units for value from time to time (i) to existing Partners (including itself),
(ii) to new Partners, or (iii) to itself in connection with the issuance of
additional stock or securities by it, at the Issue Price set forth in Section
(b) below. The Issue Price shall be paid to the Partnership in cash, or in
such other form as may be acceptable to the General Partner; provided, however,
that if the General Partner issues shares of stock to its employees pursuant to
any stock option, restricted stock or other employee benefit plan, the Issue
Price of the OP Units purchased as a consequence thereof shall be paid in cash
or property only to the extent of the cash or property received by the General
Partner in exchange for such stock, and the Partnership shall be deemed to have
received other value equal to the remainder of the Issue Price.
(b) Upon execution of this Agreement, the General Partner's interest in
the Partnership comprises substantially all of its assets, and the number of OP
Units held by the General Partner equals the number of shares of its
outstanding common stock. It is expected that this circumstance will continue
to exist, since the General Partner intends to distribute substantially all of
its income on a current basis, has agreed to apply the net proceeds of the sale
of additional stock or securities to the purchase of additional OP Units, and
has no plans to issue any securities other than its existing single class of
common stock. The Issue Price shall be determined as follows:
(1) If the Issue Price of an OP Unit is specified in a Contribution
Agreement, the Issue Price shall be as so specified.
(2) If the Issue Price of an OP Unit is not specified in a
Contribution Agreement, then the Issue Price shall be the market value of
one share of the General Partner's common stock, which shall be:
(i) Subject to Section (ii) below, the market value shall be
the average of the last reported sale price per share of the
General Partner's common stock on the New York Stock Exchange, or
if there is no reported sale the mean between the last reported bid
and asked price, on each of the most recent ten (10) trading days
preceding the date of issuance of the OP Units, as reported in the
Wall Street Journal (Midwest Edition) or another reputable
publication or reporting service selected by the General Partner;
or
(ii) If the General Partner issues additional shares of its
common stock and applies all the proceeds thereof (net of offering
expenses) to the
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purchase of additional OP Units, the per-share market value of the
General Partner's Common Stock shall be the per-share net proceeds
realized by the General Partner upon such issuance.
(c) The Partnership is obligated to issue additional OP Units to Water
Oak, Ltd., as described in Exhibit B.
3.7 EXCHANGE OF COMMON OP UNITS
(a) The General Partner hereby grants to each Limited Partner the right to
exchange any or all of the Common OP Units held by such Limited Partner for
shares of the General Partner's common stock. Each Common OP Unit shall be
exchangeable for one (1) share of the General Partner's common stock. Such
right may be exercised by a Limited Partner at any time and from time to time
upon not less than ten (10) days prior written notice to the General Partner.
The General Partner shall at all times reserve and keep available a sufficient
number of authorized but unissued shares of common stock to permit the exchange
of all the Limited Partners' Common OP Units pursuant to this Section 3.7.
(b) Notwithstanding Section 3.7(a), upon tender of any Common OP Units
pursuant to that Section:
(1) The General Partner may issue cash in lieu of fractional shares.
(2) The General Partner may issue cash in lieu of stock to the
extent necessary to prevent the recipient from violating the Ownership
Limitations of Section 2 of Article VII of the General Partner's Articles
of Amendment and Restatement, or corresponding provisions of any amended
or restated Articles.
(c) No Limited Partner shall be deemed to be a shareholder of or have any
other interest in the General Partner, by virtue of being the holder of one or
more OP Units.
(d) Notwithstanding Section 3.7(a), a Limited Partner shall not have the
right to exchange OP Units for the General Partner's common stock if (i) in the
opinion of counsel for the General Partner, the General Partner would no longer
qualify or its status would be seriously compromised as a real estate
investment trust under the Internal Revenue Code as a result of such exchange;
or (ii) such exchange would, in the opinion of counsel for the General Partner,
constitute or be likely to constitute a violation of applicable securities
laws. In the event of either such occurrence, the General Partner shall
purchase such Limited Partner's OP Units for cash in an amount equal to the
Issue Price of a Common OP Unit on the date on which the exchange would
otherwise occur.
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3.8 ADJUSTMENT OF OP UNITS
Notwithstanding the foregoing provisions of this Section 3:
(a) Subject to Section 3.8(b), if the number of outstanding shares of
the General Partner's common stock is changed by reason of any stock dividend,
split or combination, or any recapitalization, merger, consolidation,
combination, exchange of shares or other similar capital change, the number of
OP Units held by all the Partners shall be proportionately adjusted so that the
number of OP Units held by the General Partner equals the number of shares of
its outstanding common stock, and the number of OP Units held by the Limited
Partners shall bear the same relation to the number of shares held by the
General Partner after such capital change as the number of OP Units held by the
Limited Partners bore to the number of shares held by the General Partner before
such capital change.
(b) If any stock or securities of the General Partner should be
outstanding at any time, other than the existing class of common stock, then the
provisions of Sections 3.6, 3.7 and 3.8(a) shall be applied with reference to
all the General Partner's stock and securities in such equitable manner as the
General Partner may determine, in order to reflect the fact that the value of
the OP Units held by the General Partner is equal to the aggregate value of the
General Partner's outstanding stock and securities.
3.9 WITHDRAWALS
No Partner shall be entitled to withdraw any portion of its capital
account, except by way of distributions pursuant to Section 4.3, until
termination of the Partnership.
3.10 BORROWINGS
The Partnership may borrow sums for any purpose which the General Partner
deems beneficial to the Partnership or the Partners from any source, including
a Partner, upon such terms as the General Partner deems appropriate.
4. CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
4.1 CAPITAL ACCOUNTS
A capital account shall be maintained for each Partner, to which
contributions and profits shall be credited and against which distributions and
losses shall be charged. Capital accounts shall be maintained in accordance
with the accounting principles prescribed by the Allocation Regulations, so
that the tax allocations provided in this Agreement shall, to the extent
possible, have "substantial economic effect" within the meaning of the
Allocation Regulations, or, if such allocations cannot have substantial
economic effect, so that they may be deemed to be "in accordance with the
Partners' interests in the Partnership" within the meaning of the Allocation
Regulations.
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4.2 PROFITS AND LOSSES
(a) The profits and losses of the Partnership shall be
determined as of the end of each fiscal year of the Partnership and shall be
allocated among the Partners as follows:
(1) Subject to Section 4.2(a)(2), the profits and losses
shall be allocated among Partners in proportion to their respective OP
Units (Common and Preferred), provided, however, that the profits
allocated to any Preferred OP Units for any calendar year shall not exceed
the amount of the Preferred Dividends thereon for that calendar year, and
any such excess profits remaining after the application of such limitation
shall be allocated to the holders of the Common OP Units, pro rata.
(2) To the extent that an allocation of losses in
accordance with Section 4.2(a)(1) would cause a Limited Partner to have an
adjusted capital account deficit within the meaning of the Allocation
Regulations, such portion of the losses shall be allocated to the General
Partner instead of that Limited Partner, and the profits which would
otherwise be allocated to that Limited Partner in the future shall instead
be allocated to the General Partner to the extent of such portion of the
losses.
(b) If there is a change in the interest of any Partner during
the period covered by an allocation, due to the addition, withdrawal or
substitution of a Partner, or otherwise, the profits and losses for the period
shall be allocated among the varying interests, as determined by the General
Partner in its discretion in a manner consistent with applicable provisions of
the Internal Revenue Code and the regulations thereunder.
4.3 DISTRIBUTIONS
(a) The Partnership shall distribute to the Partners from time to
time such cash as the General Partner determines to be available for
distribution and not to be required to provide for the Partnership's cash needs,
including reasonable reserves for contingencies and provision for redemption of
Preferred OP Units. Distributions may be made from any source and regardless of
whether the same constitutes a return of part or all of the Partners' capital
contributions. The General Partner shall make such determination in the
exercise of its reasonable business judgment. Subject to the provisions of
Section 8.2, all distributions shall be made as follows:
(1) Distributions in respect of Preferred Dividends shall
be made at the times and in the amounts provided in Section 3.3(a).
(2) All remaining distributions shall be made to the
Partners in proportion to their respective Common OP Units on record dates
established by the General Partner for each distribution; provided,
however, that the distribution as of any record date in respect of a
Common OP Unit issued after the prior record date shall be
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a prorated portion of the full distribution, based on the proportion
of the interval between record dates that the Common OP Unit was
outstanding.
(b) The Limited Partners acknowledge that the General Partner is
required to distribute to its shareholders a specified percentage of its share
of the Partnership's taxable income for federal income tax purposes, in order to
maintain its status as a Real Estate Investment Trust under the Internal Revenue
Code. If the Partnership does not have sufficient funds on hand to fund a
distribution to the Partners which will provide the General Partner with
sufficient funds to make the required distribution to its shareholders in a
timely manner, as estimated by the General Partner, the General Partner may
cause the Partnership to take such action as it deems appropriate in order to
raise the necessary funds, including (but not limited to) borrowing money and
disposing of assets, which funds shall be distributed as provided in Section
4.3(a)(2).
5. RIGHTS AND OBLIGATIONS OF PARTNERS
5.1 LIMITED PARTNERS
The Limited Partners shall be limited partners within the meaning of the
Partnership Act. The Limited Partners as such shall not be bound by the
obligations of the Partnership and shall not be obligated to make contributions
to the Partnership in excess of the amounts provided for in this Agreement.
The Limited Partners shall not be entitled to participate in the management and
control of the Partnership and shall have no authority to act for or bind the
Partnership.
5.2 GENERAL PARTNER
(a) The General Partner shall be the sole general partner within
the meaning of the Partnership Act. Subject to the other provisions of this
Agreement, the General Partner shall have all the rights, powers, liabilities
and restrictions of a partner in a partnership without limited partners.
(b) The General Partner shall not voluntarily withdraw from the
Partnership or voluntarily dissolve or terminate its existence, prior to
termination of the Partnership. The voluntary dissolution or termination of
existence of the General Partner shall be deemed to be a withdrawal from the
Partnership in violation of this Agreement. If the General Partner ceases to be
a General Partner by reason of the occurrence of an event of withdrawal within
the meaning of Section 402 of the Partnership Act, the General Partner shall not
be entitled to receive the value of its interest in the Partnership, but it (or
its successor in interest) shall receive those allocations and distributions to
which it would have been entitled had the event of withdrawal not occurred,
whether or not the Partnership is reconstituted and continued as provided in
Section 7.2, subject, however, to the provisions of Section 602 of the
Partnership Act.
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5.3 ADDITIONAL PARTNERS
Additional Partners may be admitted to the Partnership from time to time
if they acquire additional OP Units issued pursuant to Section 3.4. Assignees
of Partnership interests may be admitted to the Partnership as substitute
Partners pursuant to Section 9 of this Agreement.
6. ADMINISTRATIVE POWERS, OBLIGATIONS, COMPENSATION, ETC., OF
GENERAL PARTNER
6.1 POWERS
(a) Subject to the other provisions of this Section 6, the
General Partner shall manage and have complete control over the conduct of
Partnership affairs, shall have full power to act for and to bind the
Partnership to the extent provided by applicable law, and shall have the
authority, on behalf of the Partnership, to do all things appropriate to the
accomplishment of the purposes of the Partnership, including (but not limited
to):
(1) filing the Certificate of Limited Partnership with the
Michigan Department of Commerce and any amendments thereto which it may
deem appropriate in order to reflect any action by the Partnership or the
Partners which has been taken as permitted by this Agreement;
(2) managing, operating and leasing the manufactured
housing properties owned by the Partnership and conducting any business
activities associated therewith;
(3) acquiring, holding and selling or otherwise disposing
of real and personal property;
(4) organizing and acquiring an interest in corporations,
partnerships or other entities which own manufactured housing properties
and related assets directly or through one or more other entities and
exercising all rights and powers, and performing all obligations, incident
thereto;
(5) obtaining financing and refinancing and borrowing
money for Partnership purposes, guaranteeing the obligations of entities
in which the Partnership has an interest, giving security for such
borrowings and guaranties, and mortgaging or granting a security interest
in any Partnership property;
(6) employing managers, leasing representatives,
maintenance personnel, consultants, attorneys, accountants and other
employees, independent contractors and agents;
(7) investing and reinvesting Partnership funds;
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(8) executing contracts, leases, notes, mortgages,
security agreements, loan documents, deeds and other writings, upon such
terms as it deems appropriate;
(9) in general, managing the business and affairs of the
Partnership; and
(10) doing such other acts as may facilitate the General
Partner's exercise of its powers hereunder or as the General Partner may
deem appropriate to the accomplishment of the purposes of the Partnership.
(b) Every contract, note, mortgage, lease, deed or other
instrument executed by the General Partner appearing to be such from the
Certificate of Limited Partnership, shall be conclusive evidence that at the
time of execution, this Partnership was then in existence, that this Agreement
had not theretofore been terminated or amended in any manner not disclosed in
the Certificate of Limited Partnership and that the execution and delivery of
such instrument was duly authorized by the Partners.
6.2 SELF-DEALING
Any Partner and any affiliate of a Partner may deal with the Partnership,
directly or indirectly, as vendor, purchaser, employee, agent or otherwise;
provided, however, that the terms of such arrangement are not less favorable to
the Partnership than independent third party arrangements. No contract or
other act of the Partnership shall be voidable or affected in any manner by the
fact that a Partner or its affiliate is directly or indirectly interested in
such contract or other act apart from its interest as a Partner, nor shall any
Partner or its affiliate be accountable to the Partnership or the other
Partners in respect of any profits directly or indirectly realized by him by
reason of such contract or other act, and such interested Partner shall be
eligible to vote or take any other action as a Partner in respect of such
contract or other act as it would be entitled were it or its affiliate not
interested therein.
6.3 SERVICES; COMPENSATION
The General Partner shall receive no compensation for acting as General
Partner, but it or its affiliates may receive reasonable and competitive
compensation for any specific services rendered to the Partnership and may be
reimbursed for any Partnership expenses paid or advanced by them.
6.4 LIMITATION OF GENERAL PARTNER'S LIABILITY
(a) The General Partner and its directors and officers shall have
no liability to the Partnership or to any Partner for any act or omission,
except for its own fraud, intentional breach of fiduciary duty of this
Agreement, or gross negligence.
(b) The Partnership (i) shall indemnify the General Partner and
its directors and officers against any losses, judgments, liabilities, expenses
and amounts paid in settlement of
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claims, which are incurred or paid in connection with the Partnership or its
business or affairs, unless the same results from the fraud, intentional breach
of fiduciary duty of this Agreement, or gross negligence of the party claiming
indemnification, and (ii) shall pay or reimburse the General Partner for any
reimbursement obligation relating to the Partnership or its business or
affairs, which is owed by the General Partner to its directors, officers or
employees pursuant to its Articles of Incorporation or By-Laws or by contract.
The provisions of this Section (b) are in addition to any other right of
indemnification which any party may otherwise have.
(c) The General Partner shall not be personally liable to return any
Limited Partner's capital contribution.
6.5 TAX MATTERS PARTNER
The General Partner shall serve as the Partnership's Tax Matters Partner
for purposes of Chapter 63C of Subtitle F of the Internal Revenue Code and
shall have the powers and duties provided for therein and in the regulations
thereunder.
6.6 POWER OF ATTORNEY
Each Limited Partner irrevocably appoints the General Partner and any
corporate officer of the General Partner as such Limited Partner's
attorney-in-fact, with full power of substitution, on its behalf and in its
stead to execute, swear to and file the Certificate of Limited Partnership, any
amendment or cancellation thereof and any other instrument which may be
appropriate to effect any action by or on behalf of the Partnership or the
Partners which has been taken as provided in this Agreement, including, but not
limited to, amending Exhibit A hereto to reflect any changes in the number of
OP Units held by such Limited Partner. This power of attorney is coupled with
an interest and shall be irrevocable. This power of attorney is coupled with
an interest and shall be irrevocable.
6.7 OTHER ACTIVITIES OF GENERAL PARTNER
The General Partner shall devote its full time and attention to the
affairs of the Partnership and entities in which the Partnership has an
interest, and shall not engage in any active business activity other than the
business of the Partnership. This provision shall not preclude the General
Partner from investing its funds in passive investments. The restrictions of
this Section 6.7 shall not apply to any Limited Partner or any director,
officer, employee or shareholder of the General Partner, or any of their
affiliates, who (subject to any other restrictions which may be applicable to
them) shall be free to engage in any business activity, whether or not
competitive with the business of the Partnership.
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7. TERM OF PARTNERSHIP
7.1 COMMENCEMENT
The term of the Partnership shall commence upon the filing of the
Certificate of Limited Partnership with the Michigan Department of Commerce.
7.2 TERMINATION
The term of the Partnership shall end, and the Partnership shall be
terminated, solely on the first to occur of the following:
(a) December 31, 2043;
(b) 120 days after the sale or other disposition of substantially
all of the Partnership's operating assets and the distribution by the
Partnership of the net proceeds thereof and all remaining Partnership property;
or
(c) An event of withdrawal of the General Partner unless within
90 days thereafter all the Partners elect to reconstitute and continue the
Partnership with a successor General Partner.
None of the following shall cause a termination of the Partnership: the
retirement, dissolution or insolvency of a Limited Partner, the substitution of
a General or Limited Partner, or the admission of a new General or Limited
Partner.
8. LIQUIDATION
8.1 LIQUIDATION OF PARTNERSHIP
(a) Upon termination of the Partnership, the General Partner
shall conclude the affairs of the Partnership. If there is no General Partner,
the Partnership affairs shall be concluded by a trustee selected in writing by
the holders of a majority of the OP Units. The assets of the Partnership may be
liquidated or distributed in kind, as determined by the General Partner or the
trustee, and the same shall be applied as provided in Section 4.3, subject,
however, to the provisions of Section 8.2.
(b) To the extent that Partnership assets cannot either be sold
without undue loss or be readily divided for distribution in kind to the
Partners, then the Partnership may, as determined by the General Partner or
Trustee, convey those assets to a trust or other suitable holding entity
established for the benefit of the Partners in order to permit the assets to be
sold without undue loss and the proceeds thereof distributed to the Partners at
a future date. The legal form of the holding entity, the identity of the trustee
or other fiduciary, and the terms of its
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governing instrument shall be determined by the General Partner, or if there is
no General Partner, by the holders of a majority of the OP Units.
(c) If any Partnership assets are sold on the installment basis,
any principal or interest distributable by the Partnership from such sale shall
be distributed to the Partners as if undivided interests in the instrument
evidencing such installment obligation had been distributed to the Partners in
kind, as provided in Section (b) above.
8.2 LIQUIDATING DISTRIBUTIONS; RESTORATION OF CAPITAL ACCOUNT DEFICITS
Upon the liquidation of the Partnership or any Partner's interest in the
Partnership, within the meaning of the Allocation Regulations:
(a) The capital accounts of the holders of the Common OP Units
shall be adjusted to reflect the manner in which any unrealized income, gain,
loss and deduction inherent in the Partnership's property, which has not
previously been reflected in the Partners' capital accounts, would be allocated
among the Partners if there were a taxable disposition of such property at fair
market value on the date of distribution. Any resulting increase in the
Partners' capital accounts shall be allocated first to the holders of the
Preferred OP Units in proportions and amounts sufficient to bring their
respective capital account balances up to the amount of the Issue Prices of
their respective Preferred OP Units plus accrued and unpaid Preferred Dividends
thereon, and the balance shall be allocated to the Common OP Units. Any
resulting decrease in the Partners' capital accounts shall first be allocated to
the holders of the Common OP Units in proportions and amounts sufficient to
reduce their respective capital account balances to zero, then to the holders of
the Preferred OP Units in proportions and amounts sufficient to reduce their
respective capital account balances to zero, and the balance (if any) to the
General Partner. Liquidating distributions shall be made in accordance with the
positive capital account balances of the Partners, after giving effect to such
adjustment and other capital account adjustments for the current year, as
provided in the Allocation Regulations.
(b) If the General Partner has a deficit balance in its capital
account following the liquidation of the Partnership or its interest in the
Partnership, as determined after taking into account all capital account
adjustments for the current year (other than those made pursuant to this Section
8.2), the General Partner shall be unconditionally obligated to restore the
amount of such deficit balance to the Partnership within 90 days after the date
of such liquidation, or by the end of the Partnership's taxable year in which
the liquidation occurs, whichever is later. The amount restored shall, upon
liquidation of the Partnership, be paid to creditors of the Partnership or
distributed to other Partners in accordance with their positive capital account
balances. No Limited Partner shall be obligated to restore a deficit in its
capital account upon liquidation of the Partnership or its interest in the
Partnership, although this sentence shall not be construed as limiting a Limited
Partner's obligation to make capital contributions as provided elsewhere in this
Agreement.
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9. TRANSFERABILITY OF INTERESTS
9.1 IN GENERAL
Subject to Section 9.3, a Limited Partner may transfer any part or all of
its interest in the Partnership, but such transfer shall not entitle the
transferee to be substituted as a Partner, and the transferor shall remain a
Partner and shall remain liable to the Partnership and the Partners as if such
transfer had not occurred. The General Partner may not transfer its interest
in the Partnership.
9.2 RIGHTS OF TRANSFEREES
A transferee of a Partnership interest shall not be admitted as a General
Partner unless the holders of a majority of the OP Units consent in writing. A
transferee shall not be admitted as a Limited Partner unless the General
Partner consents in writing. If the General Partner does consent, then the
transferor shall no longer be treated as a Partner. Any such consent may be
given or withheld at the sole discretion of those Partners whose consent is
required. As a condition of such consent, the General Partner may require a
substitute Partner to pay the legal and other costs incurred by the Partnership
in effecting its admission. A transferee who does not become a substitute
Partner shall have no rights hereunder except to receive any allocations and
distributions which (but for the transfer) would have been made to the
transferor. No transfer of a Partnership interest shall be effective with
respect to the Partnership until written notice thereof to the Partnership.
9.3 RESTRICTIONS ON TRANSFERS
(a) Notwithstanding the other provisions of this Section 9:
(1) No Partner shall transfer its interest in the
Partnership unless the transferee agrees, in a writing delivered to and
enforceable by the Partnership, to be bound by the provisions of this
Section 9 as if it were a Partner.
(2) No Partner shall transfer its interest in the
Partnership without the prior written consent of the General Partner if
the effect of the transfer would be to terminate the Partnership within
the meaning of Section 708(b) of the Internal Revenue Code.
(3) No Partner shall transfer its interest in the
Partnership if such transfer would violate any applicable state or federal
securities law.
(4) No Partner shall transfer its interest in the
Partnership without an opinion of counsel in form and substance
satisfactory to counsel for the Partnership that registration is not
required under the Securities Act of 1933 or any applicable state
securities law, unless the General Partner in its sole discretion waives
such requirement.
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(b) The Partners acknowledge that their interests in the
Partnership have not been registered under any state or federal securities laws
or regulations and agree that such interests will not be transferred without
registration under such laws or regulations or exemption therefrom.
10. INVESTMENT REPRESENTATION
The Partners represent to each other and to the Partnership that they are
holding their respective interests in the Partnership for their own personal
accounts, and without a view to transferring or distributing their interests.
11. AMENDMENTS
This Agreement may be amended by the holders of a majority of the OP
Units. In addition, Exhibit A may be amended from time to time by the General
Partner to reflect the issuance, redemption or transfer of OP Units or any
other change in the Partners or the OP Units. Any amendment made pursuant to
this Section may be made effective as of any prospective date.
12. TAX ALLOCATIONS
12.1 GENERAL RULE
Each item of income, gain, deduction, loss and credit for federal income
tax purposes shall be allocated among the Partners in the same proportions that
the corresponding book item which gave rise to the tax item was allocated, or
if there is no corresponding book item the tax item shall be allocated in
accordance with their respective OP Units; provided, however, if the Allocation
Regulations or other Treasury Regulations require that such item be allocated
in a different manner, then the allocation shall be governed by the Allocation
Regulations or such other Regulations. In the latter event, if the allocation
may be made in more than one manner, it shall be made in such manner as the
General Partner may determine.
12.2 BOOK/TAX DIFFERENTIALS
Whenever the book value of Partnership property differs from its adjusted
basis for federal income tax purposes, the allocation of depreciation,
depletion, amortization, and gain and loss with respect to such property, as
determined for federal income tax purposes, shall be made in a manner which
takes account of the variation between book value and adjusted tax basis in the
same manner as variations between fair market value and adjusted tax basis of
property contributed to the Partnership are taken into account under Section
704(c) of the Internal Revenue Code. With respect to the property contributed
by any Partner, the Partnership shall use the traditional method, as described
in Proposed Treasury Regulations Section 1.704-3(b).
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12.3 QUALIFIED INCOME OFFSET
Since the Partners are not obligated to restore a deficit capital account
balance upon liquidation of the Partnership or upon liquidation of their
interest in the Partnership, or are obligated to restore only a limited amount
of such deficit, if any Partner unexpectedly receives a distribution which is
not offset by prior increases to its capital account, or a capital account
adjustment or allocation of loss or deduction described in paragraph
(b)(2)(ii)(d) of the Allocation Regulations (dealing with certain oil and gas
depletion adjustments and certain deductions attributable to changes in a
Partnership interest or a Partnership interest acquired by gift), then to the
extent that such distribution, adjustment or allocation causes the Partner's
deficit capital account balance to exceed the amount of such deficit which it
is obligated to restore upon liquidation of the Partnership or its interest in
the Partnership, such Partner shall be allocated items of income and gain in an
amount and manner sufficient to eliminate such excess deficit balance as
quickly as possible.
12.4 MINIMUM GAIN CHARGEBACK
If there is a net decrease in the Partnership's "minimum gain" for any
taxable year of the Partnership, each Partner with a deficit capital account
balance at the end of such year shall be allocated, before any other allocation
is made under Section 704(b) of the Internal Revenue Code, items of income and
gain for such year (and, if necessary, subsequent years), in the amount and in
the proportions needed to eliminate such deficit as quickly as possible, to the
extent of such Partner's share of the net decrease in the minimum gain. In
applying the provisions of this Section, a Partner's capital account balance
shall be adjusted, and items of income and gain shall be allocated, and the
minimum gain and a Partner's share thereof shall be calculated, in the manner
provided in the Allocation Regulations.
12.5 SECTION 754 ELECTIONS
The General Partner will make an election under Section 754 of the
Internal Revenue Code and the allocation of items of income, deduction, gain or
loss shall be governed by the regulations under Section 754.
12.6 TAX CREDITS
Any credit allowable to the Partnership for federal income tax purposes or
any recapture with respect to such credit shall be allocated among the Partners
in proportion to their respective OP Units. Upon the sale or other disposition
of any property with respect to which the investment tax credit was allowed,
the gain thereby realized by the Partnership shall, to the extent of any net
basis reduction by reason of the investment tax credit, be allocated to the
Partners in the proportions that the investment tax credit was allocated.
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12.7 DEPRECIATION RECAPTURE
Upon the disposition of Partnership property, each Partner's share of the
total gain (if any) shall include a share of any part of the gain which
constitutes ordinary income for federal income tax purposes due to recapture of
depreciation, proportionate to its share of the depreciation as previously
allocated to the Partners. If only a portion of the depreciation results in
ordinary income treatment (such as in the case of depreciation on certain real
property in excess of straight-line), the allocation shall be made based on the
manner in which such portion of the depreciation was allocated. If a Partner's
share of such ordinary income would otherwise exceed its share of the total
gain, the excess shall be reallocated among the other Partners in proportion to
their respective shares of the total gain. Notwithstanding the foregoing, if
an election under Section 754 of the Internal Revenue Code is in effect with
respect to the interest of any Partner, the allocation of such ordinary income
to him shall be governed by applicable Treasury Regulations.
13. MISCELLANEOUS PROVISIONS
13.1 BOOKS OF ACCOUNT; REPORTS
(a) The General Partner shall keep true and complete books of
account and records of all Partnership transactions. The books of account and
records shall be kept at the office of the Partnership designated in Section 1
of this Agreement. The Partnership shall maintain at such office books of
account and records including: (i) a list of names and addresses of all
Partners and other investors in the Partnership; (ii) a copy of the Certificate
of Limited Partnership together with executed copies of all powers of attorney
pursuant to which the Certificate of Limited Partnership has been executed;
(iii) copies of the Partnership's federal, state and local income tax returns
and reports for the three most recent years; (iv) copies of the Partnership's
effective Partnership Agreement; and (v) copies of the financial statements of
the Partnership for the three most recent years. Such Partnership records shall
be available to any Partner or its designated representative during ordinary
business hours at the reasonable request and expense of such Partner.
(b) The General Partner shall not be required to deliver or mail
a copy of the Certificate of Limited Partnership to any Partner except upon such
Partner's written request.
(c) Each Limited Partner or its designated representative may
inspect the books and records of the Partnership at any reasonable time for
proper purposes.
(d) The Partnership shall provide all Limited Partners with
annual balance sheets and income statements. Such balance sheets and income
statements need not be audited unless the holders of a majority of the OP Units
so request, in which event the cost of the audit shall be paid by the
Partnership.
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13.2 BANK ACCOUNTS AND INVESTMENT OF FUNDS
All funds of the Partnership shall be deposited in its name in such
checking accounts, savings accounts, time deposits, or certificates of deposit
or shall be invested in such other manner, as shall be designated by the
General Partner from time to time. Withdrawals shall be made upon such
signature or signatures as the General Partner may designate.
13.3 ACCOUNTING DECISIONS
All decisions as to accounting matters shall be made by the General
Partner in accordance with the accounting principles provided for in this
Agreement, consistently applied. Such decisions shall be acceptable to the
accountants or attorneys retained by the Partnership, and the General Partner
may rely upon the advice of the accountants or attorneys as to whether such
decisions are in accordance with such accounting principles.
13.4 FEDERAL INCOME TAX ELECTIONS
The Partnership shall make all federal income tax elections in such manner
as the General Partner determines to be in the best interest of the Partners
upon the advice of the attorneys or accountants retained by the Partnership.
The General Partner may elect to compute depreciation and to make other
calculations for federal income tax purposes in the same manner as such
calculations are made in its financial reports to its shareholders.
13.5 MEETINGS OF PARTNERSHIP
The General Partner shall promptly call an informational meeting of all
Limited Partners upon request by 25% in interest or more of the Limited
Partners who are unaffiliated with the General Partner or its affiliates.
13.6 ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the parties with
respect to the subject matter hereof and may be modified only as provided
herein, except that the provisions of any Subscription Agreement pursuant to
which any Limited Partner subscribed for its interest in the Partnership shall
continue in full force and effect. No representations or oral or implied
agreements have been made by any party hereto or its agent, and no party hereto
relies upon any representation or agreement not set forth herein.
13.7 NOTICES, ETC
Any notice, writing, or other matter, and any distribution, to be
delivered hereunder shall be deemed delivered when deposited in the United
States mail with postage prepaid and addressed to the Partnership at the
Partnership's principal offices, to a Partner at its address as set forth in
Exhibit A and to a transferee of a Partner at its address as
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set forth in the notice of transfer; provided, that a person may change
its address by written notice to the Partnership.
13.8 CONSENT OF LIMITED PARTNERS
Various provisions of this Agreement require or permit the consent,
agreement, approval or disapproval, written or otherwise, of the Limited
Partners. In any such case, the General Partner shall give all Limited
Partners written notice of the action, event or agreement, and if such notice
expressly so states, then if the Limited Partner does not indicate its
disapproval by written notice to the General Partner within the period of time
(not less than 15 days after mailing of the notice) specified in the notice,
such Partner shall be deemed to have given its written consent, approval or
agreement.
13.9 FURTHER EXECUTION
Upon request of the General Partner from time to time, the Partners shall
execute and swear to or acknowledge any amended Certificate of Limited
Partnership and any other writing which may be required by any rule or law or
which may be appropriate to the effecting of any action by or on behalf of the
Partnership or the Partners which has been taken in accordance with the
provisions of this Agreement.
13.10 SUBMISSION TO MICHIGAN JURISDICTION
Water Oak, Ltd. irrevocably designates Winderweedle, Haines, Xxxx &
Xxxxxxx, P.A., or its successor, as its agent to accept service of process in
any action or proceeding brought by the Partnership or any party to this
Agreement (but not any third party unless Water Oak, Ltd. is impleaded by the
Partnership or a party to this Agreement) against Water Oak, Ltd. and arising
out of this Agreement or any breach thereof. During such time as any other
Limited Partner is not domiciled within the State of Michigan, such Limited
Partner irrevocably designates the General Partner as its agent to accept
service of process in any action or proceeding brought by the Partnership or
any party to this Agreement (but not any third party unless such Limited
Partner is impleaded by the Partnership or a party to this Agreement) against
him and arising out of this Agreement or any breach thereof. The above
designations shall not be revoked by the act, death or incapacity of any
Limited Partner and shall bind such Partner's heirs, personal representatives,
successors and assigns. All Limited Partners consent to the jurisdiction of
the courts and administrative agencies of the State of Michigan and its
political subdivisions in any action or proceeding.
13.11 BENEFITS
This Agreement shall inure to the benefit of and shall bind the parties
hereto, their successors and permitted assigns. None of the provisions of this
Agreement shall be construed as for the benefit of or as enforceable by any
creditor of the Partnership or the Partners or any other person not a party to
this Agreement.
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13.12 SEVERABILITY
The invalidity or unenforceability of any provision of this Agreement in a
particular respect shall not affect the validity and enforceability of any
other provision of this Agreement or of the same provision in any other
respect.
13.13 CAPTIONS
All captions are for convenience only, do not form a substantive part of
this Agreement and shall not restrict or enlarge any substantive provisions of
this Agreement.
13.14 GENDER
As used in this Agreement, the masculine, feminine and neuter gender shall
be interchangeable.
13.15 COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which shall constitute one instrument.
The General Partner shall have custody of counterparts executed in the
aggregate by all Partners.
13.16 MICHIGAN LAW TO CONTROL
This Agreement shall be construed and enforced in accordance with Michigan
law.
14. DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
- The term "AFFILIATE" or "AFFILIATES" means any person or entity which directly
or indirectly through one or more intermediaries controls, is controlled
by or is under common control with a Partner.
- "ALLOCATION REGULATIONS" means Treasury Regulations, '1.704-1(b) and -2,
which govern the allocation of profits, losses and other items for federal
income tax purposes.
- "ASPEN GROUP" means those Limited Partners identified as such in Exhibit A
and their successors in interest.
- The term "TRANSFER" means any direct or indirect transfer, assignment,
conveyance or alienation of, or succession to, any legal or beneficial
interest or rights in the subject matter thereof, whether voluntary,
involuntary or by operation
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of law, including a sale, exchange, gift, contribution, pledge or granting of
a security interest, or the act of entering into a pooling or sharing
agreement. The parties to any such transaction are referred to as the
"TRANSFEROR" and "TRANSFEREE", respectively.
- A "BUSINESS DAY" is a day other than a Saturday, Sunday or legal holiday
under Michigan or federal law.
- "CERTIFICATE OF LIMITED PARTNERSHIP" means the Certificate of Limited
Partnership, including all restatements thereof and amendments thereto, which
are filed with the appropriate authorities under the law pursuant to which the
Partnership is organized. At the execution of this Agreement, the
Partnership's Certificate of Limited Partnership consists of a Restated
Certificate of Limited Partnership filed with the Michigan Department of
Commerce on December 28, 1993 and a number of amendments thereto which have
also been filed with the Michigan Department of Commerce.
- "COMMON OP UNITS" are a class of OP Units and consist of the "OP Units" as
defined in the Former Partnership Agreement, and any OP Units issued on or
after the date hereof which are so designated upon issuance. The terms,
rights and preferences of the Common OP Units are set forth in Section 3.
- The "CONTRIBUTION AGREEMENTS" are those agreements pursuant to which
Limited Partners acquired OP Units.
- "CONVERSION DATE" is defined in Section 3.3.
- "CONVERSION PERIOD" is defined in Section 3.3.
- "CONVERSION NOTICE" is defined in Section 3.3.
- The "FISCAL YEAR" of the Partnership, and its taxable year for federal
income tax purposes, shall be the calendar year.
- "FORMER PARTNERSHIP AGREEMENT" is defined in the Preliminary Statement.
- The "HOLDER" of OP Units is the Partner who is shown in Exhibit A as
owning the same, regardless of whether such Partner has transferred such
OP Units, although a transferee may have rights in connection with such OP
Units as provided in Section 9.2.
- The "ISSUE PRICE" of the OP Units is the value assigned thereto upon
issuance, as set forth in Section 3.6.
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- "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986.
- "OP UNITS" are the units into which the Partners' interests in the
Partnership have been divided, as more fully described in Section 3. OP
Units consist of Common OP Units and Preferred OP Units.
- The "PARTNERS" consist of the "GENERAL PARTNER" and the "LIMITED
PARTNERS," who are the persons designated as such in Exhibit A. Any
reference to a Partner shall, unless the context clearly requires
otherwise, include a reference to its predecessor and successor (other
than a mere assignee) in interest.
- The "PARTNERSHIP" is the limited partnership formed pursuant to this
Agreement.
- The "PARTNERSHIP ACT" is the Michigan Revised Uniform Limited Partnership
Act.
- "POPU DEFAULT" is defined in Section 3.3.
- "PREFERRED DIVIDEND ACCRUAL DATE" is defined in Section 3.3.
- "PREFERRED DIVIDEND PAYMENT DATE" is defined in Section 3.3.
- "PREFERRED DIVIDENDS" are defined in Section 3.3.
- "PREFERRED OP UNITS" are a class of OP Units and consist of any OP Units
issued on or after the date hereof which are so designated upon issuance.
The terms, rights and preferences of the Preferred OP Units are set forth
in Section 3.
All references to statutory or regulatory provisions shall be deemed to
include reference to corresponding provisions of subsequent law or regulations.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the date first above written.
SUN COMMUNITIES, INC., a Michigan Corporation
By: Xxxxxxxx X. Xxxxxx
---------------------------------------
Xxxxxxxx X. Xxxxxx, Vice-President
[signatures continue on the following pages]
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