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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 26, 1996
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Post Apartment Homes, L.P.
--------------------------
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Georgia 0-28226 58-2053632
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3350 Cumberland Circle, Atlanta, Georgia 30339
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(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (770) 850-4400
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This document consists of ____ pages
The Exhibit Index is at page 4.
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Item 5. Other Events
Post Apartment Homes, L.P. (the "Registrant") is filing this Current
Report on Form 8-K so as to file with the Securities and Exchange Commission
certain items that are to be incorporated by reference into its Registration
Statement on Form S-3 (Registration No. 333-3555).
<TABLE>
<CAPTION>
Item 7. Financial Statements and Exhibits.
<S> <C> <C>
(c) Exhibits.
4(a) - Form of Amendment to Articles of Incorporation
designating the 8 1/2% Series A Cumulative
Redeemable Preferred Shares
10 - Form of First Amendment to First Amended and
Restated Agreement of Limited Partnership of Post
Apartment Homes, L.P.
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
POST APARTMENT HOMES, L.P.
(Registrant)
By: POST PROPERTIES, INC.,
as general partner
Date: October 1, 1996 By: John A. Williams
--------------------------
John A. Williams
Chairman of the Board,
Chief Executive Officer
and Director
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EXHIBIT INDEX
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<CAPTION>
Exhibit Number and Description Page
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<S> <C> <C> <C>
4(a) - Form of Amendment to Articles of Incorporation designating the 81/2%
Series A Cumulative Redeemable Preferred Shares
10 - Form of First Amendment to First Amended and Restated Agreement of
Limited Partnership of Post Apartment Homes, L.P.
</TABLE>
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EXHIBIT 4(a)
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
POST PROPERTIES, INC.
I.
The name of the corporation is Post Properties, Inc. (the
"Corporation").
II.
The amendment (the "Amendment") is to add the following as a new
Article 2(d) of the Corporation's Articles of Incorporation, to determine the
terms of a series of the Preferred Stock:
"(d) 8 1/2% Series A Cumulative Redeemable Preferred Shares.
(i) TITLE. The series of Preferred Stock is hereby designated as
the "8 1/2% Series A Cumulative Redeemable Preferred Shares" (the "Series A
Preferred Shares").
(ii) NUMBER. The maximum number of authorized shares of the Series
A Preferred Shares shall be 1,150,000.
(iii) RELATIVE SENIORITY. In respect of rights to receive dividends
and to participate in distributions of payments in the event of any
liquidation, dissolution or winding up of the Corporation, the Series A
Preferred Shares shall rank senior to the Common Stock and any other class or
series of shares of the Corporation ranking, as to dividends and upon
liquidation, junior to the Series A Preferred Shares (collectively, "Junior
Shares").
(iv) DIVIDENDS.
(A) The holders of the then outstanding Series A Preferred Shares
shall be entitled to receive, when and as declared by the Board of Directors
out of any funds legally available therefor, cumulative dividends at the rate
of $4.25 per share per year, payable in equal amounts of $1.0625 per share
quarterly in cash on the last day of each March, June, September, and December
or, if not a Business Day (as hereinafter defined), the next succeeding
Business Day. Dividends shall begin on December 31, 1996 (each such day being
hereafter called a "Quarterly Dividend Date" and each period ending on a
Quarterly Dividend Date being hereinafter called a "Dividend Period").
Dividends shall be payable to holders of record as they appear in the share
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records of the Corporation at the close of business on the applicable record
date (the "Record Date"), which shall be the 15th day of the calendar month in
which the applicable Quarterly Dividend Date falls on or such other date
designated by the Board of Directors of the Corporation for the payment of
dividends that is not more than 30 nor less than 10 days prior to such
Quarterly Dividend Date. The amount of any dividend payable for any Dividend
Period shorter than a full Dividend Period shall be prorated and computed on
the basis of a 360-day year of twelve 30-day months. Dividends paid on the
Series A Preferred Shares in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a per share basis among all such shares at the time outstanding.
"Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in New
York City are authorized or required by law, regulation or executive order to
close.
(B) The amount of any dividends accrued on any Series A Preferred
Shares at any Quarterly Dividend Date shall be the amount of any unpaid
dividends accumulated thereon, to and including such Quarterly Dividend Date,
whether or not earned or declared, and the amount of dividends accrued on any
shares of Series A Preferred Shares at any date other than a Quarterly Dividend
Date shall be equal to the sum of the amount of any unpaid dividends
accumulated thereon, to and including the last preceding Quarterly Dividend
Date, whether or not earned or declared, plus an amount calculated on the basis
of the annual dividend rate of $4.25 per share for the period after such last
preceding Quarterly Dividend Date to and including the date as of which the
calculation is made based on a 360-day year of twelve 30-day months.
(C) Except as provided in this paragraph (d), the Series A
Preferred Shares will not be entitled to any dividends in excess of full
cumulative dividends as described above and shall not be entitled to
participate in the earnings or assets of the Corporation, and no interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Series A Preferred Shares which may be in arrears.
(D) Any dividend payment made on the Series A Preferred Shares
shall be first credited against the earliest accrued but unpaid dividend due
with respect to such shares which remains payable.
(E) If, for any taxable year, the Corporation elects to designate
as "capital gain dividends" (as defined in Section 857 of the Internal Revenue
Code of 1986, as amended (the "Code")), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year to holders of all
classes of shares (the "Total Dividends"), then the portion of the Capital
Gains Amount that shall be allocated to the holders of the Series A Preferred
Shares shall equal (i) the Capital Gains Amount multiplied by (ii) a fraction
that is equal to (a) the total dividends paid or made available to the holders
of the Series A Preferred Shares for the year over (b) the Total Dividends.
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(F) No dividends on the Series A Preferred Shares shall be
authorized by the Board of Directors or be paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of the
Corporation, including any agreement relating to its indebtedness, prohibit
such authorization, payment or setting apart for payment or provides that such
authorization, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such authorization or payment shall be
restricted or prohibited by law. Notwithstanding the foregoing, dividends on
the Series A Preferred Shares will accrue whether or not the Corporation has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are authorized.
(v) LIQUIDATION RIGHTS.
(A) Upon the voluntary or involuntary dissolutions, liquidation or
winding up of the Corporation, the holders of the Series A Preferred Shares
then outstanding shall be entitled to receive and to be paid out of the assets
of the Corporation available for distribution to its shareholders, before any
payment or distribution shall be made on any Junior Shares, the amount of
$50.00 per share, plus accrued and unpaid dividends thereon.
(B) After the payment to the holders of the Series A Preferred
Shares of the full preferential amounts provided for in this paragraph (d), the
holder of the Series A Preferred Shares, as such, shall have no right or claim
to any of the remaining assets of the Corporation.
(C) If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the amounts payable with respect
to the preference value of the Series A Preferred Shares and any other shares
of the Corporation ranking as to any such distribution on a parity with the
Series A Preferred Shares are not paid in full, the holders of the Series A
Preferred Shares and of such other shares will share ratably in any such
distribution of assets of the Corporation in proportion to the full respective
preference amounts to which they are entitled.
(D) Neither the sale, lease, transfer or conveyance of all or
substantially all of the property or business of the Corporation, nor the
merger or consolidation of the Corporation into or with any other entity or the
merger or consolidation of any other entity into or with the Corporation, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this paragraph (d).
(vi) REDEMPTION.
(A) OPTIONAL REDEMPTION. On and after October 1, 2026, the
Corporation may, at its option, redeem at any time all or, from time to time,
part of the Series A Preferred Shares at a price per share (the " Redemption
Price"), payable in cash, of $50.00, together with all accrued and unpaid
dividends to and including the date fixed for redemption (the "Redemption
Date"), without interest, to the full extent the Company has funds legally
available therefor. The
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Series A Preferred Shares have no stated maturity, except as provided for in
subparagraph (ix) below, and will not be subject to any sinking fund or
mandatory redemption provisions.
(B) PROCEDURES OF REDEMPTION.
(1) 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.
Notice of any redemption will also be mailed by the registrar, postage
prepaid, not less than 30 nor more than 60 days prior to the
Redemption Date, addressed to each holder of record of the Series A
Preferred Shares to be redeemed at the address set forth in the share
transfer records of the registrar. 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 Shares
except as to the holder to whom the Corporation has failed to give
notice or except as to the holder to whom notice was defective. In
addition to any information required by law or by the applicable rules
of any exchange upon which Series A Preferred Shares may be listed or
admitted to trading, such notice shall state: (a) the Redemption Date;
(b) the Redemption Price; (c) the number of Series A Preferred Shares
to be redeemed; (d) the place or places where certificates for such
shares are to be surrendered for payment of the Redemption Price; and
(e) that dividends on the shares to be redeemed will cease to
accumulate on the Redemption Date. If fewer than all of the Series A
Preferred Shares held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of Series A
Preferred Shares to be redeemed from such holder. If fewer than all
the Preferred Shares held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of Preferred
Shares to be redeemed from such holder.
(2) If notice has been mailed in accordance with
subparagraph (vi)(B)(1) above and provided that on or before the
Redemption Date specified in such notice all funds necessary for such
redemption shall have been irrevocably set aside by the Corporation,
separate and apart from its other funds in trust for the pro rata
benefit of the holders of the Series A Preferred Shares so called for
redemption, so as to be, and to continue to be available therefor,
then, from and after the Redemption Date, dividends on the Series A
Preferred Shares so called for redemption shall cease to accumulate,
and said shares shall no longer be deemed to be outstanding and shall
not have the status of Series A Preferred Shares and all rights of the
holders thereof as shareholder of the Corporation (except the right to
receive the Redemption Price) shall cease. Upon surrender, in
accordance with such notice, of the certificates for any Series A
Preferred Shares so redeemed (properly endorsed or assigned for
transfer, if the Corporation shall so require and the notice shall so
state), such Series A Preferred Shares shall be redeemed by the
Corporation at the Redemption Price. In case fewer than all the Series
A Preferred Shares represented by any such certificate are redeemed, a
new certificate or certificates shall be issued presenting the
unredeemed Series A Preferred Shares without cost to the holder
thereof.
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(3) Any funds deposited with a bank or trust company for
the purpose of redeeming Series A Preferred Shares shall be
irrevocable except that:
(a) the Corporation shall be entitled to receive
from such bank or trust company the interest or other
earnings, if any, earned on any money so deposited in trust,
and the holders of any shares redeemed shall have no claim to
such interest or other earnings; and
(b) any balance of monies so deposited by the
Corporation and unclaimed by the holders of the Series A
Preferred Shares entitled thereto at the expiration of two
years from the applicable Redemption Date shall be repaid,
together with any interest or other earnings earned thereon,
to the Corporation, and after any such repayment, the holders
of the shares entitled to the funds so repaid to the
Corporation shall look only to the Corporation for payment
without interest or other earnings.
(4) No Series A Preferred Shares may be redeemed except
from proceeds from the sale of other capital stock of the Corporation,
including but not limited to common stock, preferred stock, depositary
shares, interests, participations or other ownership interests
(however designated) and any rights (other than debt securities
convertible into or exchangeable for equity securities) or options to
purchase any of the foregoing.
(5) Unless full accumulated dividends on all Series A
Preferred Shares 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 Dividend Periods and the then current
Dividend Period, no Series A Preferred Shares shall be redeemed or
purchased or otherwise acquired directly or indirectly (except by
conversion into or exchange for Junior Shares); provided, however,
that the foregoing shall not prevent the redemption of Series A
Preferred Shares to preserve the Corporation's REIT status or the
purchase or acquisition of Series A Preferred Shares pursuant to a
purchase or exchange offer made on the same terms to holders of all
outstanding Series A Preferred Shares.
(6) If the Redemption Date is after a Record Date and
before the related Quarterly Dividend Date, the dividend payable on
such Quarterly Dividend Date shall be paid to the holder in whose name
the Series A Preferred Shares to be redeemed are registered at the
close of business on such Record Date notwithstanding the redemption
thereof between such Record Date and the related Quarterly Dividend
Date or the Corporation's default in the payment of the dividend due.
Except as provided above, the Company will make no payment or
allowance for unpaid dividends, whether or not in arrears, on
Preferred Shares to be redeemed.
(7) In case of redemption of less than all Series A
Preferred Shares at the time outstanding, the Series A Preferred
Shares to be redeemed shall be selected pro rata from
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the holders of record of such shares in proportion to the number of
Series A Preferred Shares held by such holders (with adjustments to
avoid redemption of fractional shares) or by any other equitable
method determined by the Corporation.
(vii) VOTING RIGHTS. Except as required by law, and as set forth
below, the holders of the Series A Preferred Shares shall not be entitled to
vote at any meeting of the shareholders for election of Directors or for any
other purpose or otherwise to participate in any action taken by the
Corporation or the shareholders thereof, or to receive notice of any meeting of
shareholders.
(A) Whenever dividends on any Series A Preferred Shares shall be
in arrears for six or more quarterly periods, whether or not such quarterly
periods are consecutive, the holders of such Series A Preferred Shares (voting
separately as a class with all other series of preferred shares upon which like
voting rights have been conferred and are exercisable) will be entitled to vote
for the election of two additional Directors of the Corporation at a special
meeting called by the holders of record of at least ten percent (10%) of any
series of preferred shares so in arrears (unless such request is received less
than 90 days before the date fixed for the next annual or special meeting of
the shareholders) or at the next annual meeting of shareholders, and at each
subsequent annual meeting until all dividends accumulated on such Series A
Preferred Shares for the past dividend periods and the then current dividend
period shall have been fully paid or declared and a sum sufficient for the
payment thereof set aside for payment. In such case, the entire Board of
Directors of the Corporation will be increased by two Directors.
(B) So long as any Series A Preferred Shares remain outstanding,
the Corporation will not, without the affirmative vote or consent of the
holders of at least two-thirds of the Series A Preferred Shares outstanding at
the time, given in person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of shares of capital stock
ranking prior to the Series A Preferred Shares with respect to the payment of
dividends or the distribution of assets upon liquidation, dissolution or
winding up or reclassify any authorized shares of the Corporation into such
shares, or create, authorize or issue any obligation or security convertible
into or evidencing the right to purchase any such shares; or (ii) amend, alter
or repeal the provisions of the Corporation's Articles of Incorporation,
including this Amendment, whether by merger, consolidation or otherwise (an
"Event"), so as to materially and adversely affect any right, preference,
privilege or voting power of the Series A Preferred Shares or the holders
thereof; provided, however, with respect to the occurrence of any of the Events
set forth in (ii) above, so long as the Series A Preferred Shares remain
outstanding with the terms thereof materially unchanged, taking into account
that upon the occurrence of an Event, the Corporation may not be the surviving
entity, the occurrence of any such Event shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting power of
holders of Series A Preferred Shares and provided further that (x) any increase
in the amount of the authorized Preferred Stock or the creating or issuance of
any other series of Preferred Stock, or (y) any increase in the amount of
authorized Series A Preferred Shares or any other series of Preferred
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Stock, in each case ranking on a parity with or junior to the Series A
Preferred Shares with respect to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding Series A Preferred Shares shall have been
redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
(C) On each matter submitted to a vote of the holders of Series A
Preferred Shares in accordance with this paragraph (d), or as otherwise
required by law, each Preferred Share shall be entitled to one vote. With
respect to each Preferred Share, the holder thereof may designate a proxy, with
each such proxy having the right to vote on behalf of the holder.
(viii) CONVERSION. The Series A Preferred Shares are not
convertible into or exchangeable for an other property or securities of the
Corporation.
(ix) RESTRICTIONS ON OWNERSHIP.
(A) Definitions. The following terms shall have the following
meanings:
(1) "Acquire" shall mean the acquisition of Beneficial
Ownership of Series A Preferred Shares by any means whatsoever including,
without limitation, (A) the acquisition of direct ownership of shares by any
Person, including through the exercise of any option, warrant, pledge, security
interest or similar right to acquire shares, and (B) the acquisition of
indirect ownership of shares (taking into account the constructive ownership
rules of Section 544 of the Code, as modified by Section 856(h)(l)(B) of the
Code, and also applying the look-thru rule contained in Section 856(h)(3)(A) of
the Code to pension trusts described in Section 401(a) of the Code) by a Person
who is an "individual" within the meaning of Section 542(a)(2) of the Code,
including through the acquisition by any Person of any option, warrant, pledge,
security interest or similar right to acquire shares.
(2) "Beneficial Ownership" shall mean, with respect to any
Person that is an "individual" as defined in Section 542(a)(2) of the Code,
the Series A Preferred Shares owned by such Person after taking into account
the constructive ownership rules of Section 544 of the Code, as modified by
Section 856(h)(1)(B) of the Code, and after applying the pension trust
look-thru rule contained in Section 856(h)(3)(A) of the Code. The terms
"Beneficial Owner," "Beneficially Owns" and "Beneficially Owned" shall have the
correlative meanings.
(3) "Code" shall mean the Internal Revenue Code of 1986, as
amended. Any reference herein to any current provision of the Code shall be
deemed to refer to any future successor provision of federal income statutory
law.
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(4) "Initial Public Offering" means the sale of Series A
Preferred Shares pursuant to the Corporation's prospectus supplement dated
September 26, 1996 as filed with the Securities and Exchange Commission
pursuant to Rule 424(b)(5) promulgated under the Securities Act of 1933, as
amended.
(5) "Ownership Limit" shall initially mean 6% of the
outstanding Series A Preferred Shares of the Corporation, and after any
adjustment as set forth in subparagraph (ix)(H) below, shall mean such greater
percentage (but not greater than 9.8%) of the outstanding Series A Preferred
Shares as so adjusted.
(6) "Person" shall mean an individual, corporation,
partnership, estate, trust (including a trust qualified under Section 401(a) or
501(c) (17) of the Code), a portion of a trust permanently set aside for or to
be used exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity and also includes a group as that
term is used for purposes of Section 13(d) (3) of the Securities Exchange Act
of 1934, as amended; but does not include an underwriter that participates in a
public offering of the Series A Preferred Shares for a period of 90 days
following the purchase by such underwriter of the Series A Preferred Shares.
(7) "REIT" shall mean a Real Estate Investment Trust under
Section 856 of the Code.
(8) "Restricted Transfer Redemption Price" shall mean the
lower of (A) the price paid by the transferee from whom shares are being
redeemed and (B) the average of the last reported sales prices on the New York
Stock Exchange of Series A Preferred Shares on the ten trading days immediately
preceding the date fixed for redemption by the Board of Directors, or if the
Series A Preferred Shares are not then traded on the New York Stock Exchange,
the average of the last reported sales prices of the Series A Preferred Shares
on the ten trading days immediately preceding the relevant date as reported on
any exchange or quotation system over which the Series A Preferred Shares may
be traded, or if the Series A Preferred Shares are not then traded over any
exchange or quotation system, then the price determined in good faith by the
Board of Directors of the Corporation as the fair market value of Series A
Preferred Shares on the relevant date.
(9) "Restriction Termination Date" shall mean the first day
after the date of the Initial Public Offering on which the Corporation
determines pursuant to subparagraph (ix)(K) below that it is no longer in the
best interests of the Corporation to attempt to, or continue to, qualify as a
REIT.
(10) "Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition that results in a change in the record
or Beneficial Ownership of Series A Preferred Shares or the right to vote or
receive dividends on Series A Preferred Shares (including (A) the granting of
any option or entering into any agreement for the sale, transfer or other
disposition of
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Series A Preferred Shares or the right to vote or receive dividends on Series A
Preferred Shares or (B) the sale, transfer, assignment or other disposition or
grant of any securities or rights convertible into or exchangeable for Series A
Preferred Shares, or the right to vote or receive dividends on Series A
Preferred Shares), whether voluntary or involuntary and whether by operation of
law or otherwise.
(B) Restrictions.
(1) During the period commencing on the date of the Initial
Public Offering and prior to the Restriction Termination Date: (a) no Person
shall Acquire any Series A Preferred Shares if, as a result of such
acquisition, any "individual," as defined in Section 542(a)(2) of the Code
(other than a pension trust which is described in Section 401(a) of the Code)
shall Beneficially Own an amount of Series A Preferred Shares in excess of the
Ownership Limit; (b) no Person shall Acquire any shares of Series A Preferred
Shares if, as a result of such acquisition, the Series A Preferred Shares and
Common Stock of the Corporation would be directly or indirectly owned by less
than 100 Persons (determined without reference to the rules of attribution
under Section 544 of the Code); and (c) no Person shall Acquire any shares if,
as a result of such acquisition, the Corporation would be "closely held" within
the meaning of Section 856(h) of the Code.
(2) Any Transfer that (x) would result in a violation of the
restrictions in subparagraph (ix)(B)(1)(b) or (c) or (y) a transferring
shareholder has actual knowledge will result in a violation of any of the
restrictions in subparagraph (ix)(B)(1)(a) shall be void ab initio as to the
Transfer of such Series A Preferred Shares that would cause the violation of
the applicable restriction in subparagraph (ix)(B)(1), and the intended
transferee shall acquire no rights in such Series A Preferred Shares.
(C) Remedies for Breach.
(1) If the Board of Directors or a committee thereof shall at
any time determine in good faith that a Transfer has taken place that falls
within the scope of subparagraph (ix)(B)(2) or that a Person intends to Acquire
Beneficial Ownership of any shares of the Corporation that will result in
violation of subparagraph (ix)(B)(1) or (2) (whether or not such violation is
intended), the Board of Directors or a committee thereof shall take such
action as it or they deem advisable to refuse to give effect to or to prevent
such Transfer, including, but not limited to, refusing to give effect to such
Transfer on the books of the Corporation or instituting proceedings to enjoin
such Transfer.
(2) Without limitation to subparagraph (ix)(B)(2) or (C)(1),
any purported transferee of Beneficial Ownership of Series A Preferred Shares
acquired in violation of subparagraph (ix)(B) shall, if it shall be deemed to
have received any such Beneficial Ownership, be deemed to have acted as agent
on behalf of the Corporation in acquiring such of the interests as result in a
violation of subparagraph (ix)(B) and shall be deemed to hold such interests in
trust
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on behalf and for the benefit of the Corporation. The transferee shall have no
right to receive dividends or other distributions with respect to such
interests, and shall have no right to vote such interests. Such transferee
shall have no claim, cause of action, or any other recourse whatsoever against
a transferor of interests acquired in violation of subparagraph (ix)(B). The
transferee's sole right with respect to such interests shall be to receive at
the Corporation's sole and absolute discretion, either (A) consideration for
such interests upon the resale of the interests as directed by the Corporation
pursuant to subparagraph (ix)(C)(3) or (B) the Restricted Transfer Redemption
Price pursuant to subparagraph (ix)(C)(3).
(3) The Board of Directors shall, within 6 months after
receiving notice of a Transfer that violates subparagraph (ix)(C)(2), either
(in its sole and absolute discretion) (A) direct the transferee of such
interests to sell all interests held in trust for the Corporation pursuant to
subparagraph (ix)(C)(2) for cash in such manner as the Board of Directors
directs or (B) redeem such interests for the Restricted Transfer Redemption
Price on such date within such 6 month period as the Board of Directors may
determine. If the Board of Directors directs the transferee to sell the
interests, the transferee shall receive such proceeds as trustee for the
Corporation and pay the Corporation out of the proceeds of such sale all
expenses incurred by the Corporation in connection with such sale plus any
remaining amount of such proceeds that exceeds the amount paid by the
transferee for the interests, and the transferee shall be entitled to retain
only the proceeds in excess of such amounts required to be paid to the
Corporation.
(D) Notice of Restricted Transfer. Any Person who Acquires or attempts
or intends to Acquire shares in violation of subparagraph (ix)(B) shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may
request in order to determine the effect, if any, of such Transfer or attempted
or intended Transfer on the Corporation's status as a REIT.
(E) Owners Required To Provide Information. From the date of the
Initial Public Offering and prior to the Restriction Termination Date each
person who is a Beneficial Owner of Series A Preferred Shares and each Person
(including the shareholder of record) who is holding Series A Preferred Shares
for a Beneficial Owner shall provide to the Corporation such information as the
Corporation may request, in good faith, in order to determine the Corporation's
status as a REIT.
(F) Remedies Not Limited. Except as provided in subparagraph (ix)(M),
nothing contained in this subparagraph (ix) shall limit the authority of the
Board of Directors to take such other action as it deems necessary or advisable
to protect the Corporation and the interests of its shareholder in preserving
the Corporation's status as a REIT.
(G) Ambiguity. In the case of an ambiguity in the application of any
of the provisions of this subparagraph (ix), including any definition contained
in subparagraph (ix)(A), the Board of Directors shall have the power to
determine the application of the provisions of this subparagraph (ix) with
respect to any situation based on the facts known to it.
10
<PAGE> 11
(H) Modification of Ownership Limit. Subject to the limitations
provided in subparagraph (ix)(I), the Board of Directors may from time to time
increase the Ownership Limit.
(I) Limitations on Modifications.
(1) The Ownership Limit may not be increased if, after giving
effect to such increase, five Persons who are considered "individuals" pursuant
to Section 542(a) (2) of the Code could Beneficially Own (including ownership
of Common Stock for purposes of this subparagraph (ix)(I)(1)), in the
aggregate, more than 49.0% in value of the outstanding shares of stock of the
Corporation.
(2) Prior to the modification of the Ownership Limit pursuant
to subparagraph (ix)(H), the Board of Directors of the Corporation may require
such opinions of counsel, affidavits, undertakings or agreements as it may deem
necessary or advisable in order to determine or ensure the Corporation's status
as a REIT.
(J) Legend. Each certificate for Series A Preferred Shares shall bear
a legend referring to the restrictions described above.
(K) Termination of REIT Status. The Board of Directors shall take no
action to terminate the Corporation's status as a REIT or to amend the
provisions of this subparagraph (ix) until such time as (A) the Board of
Directors adopts a resolution recommending that the Corporation terminate its
status as a REIT or amend this subparagraph (ix), as the case may be, (B) the
Board of Directors presents the resolution at an annual or special meeting of
the shareholders and (C) such resolution is approved by holders of a majority of
the issued and outstanding Series A Preferred Shares.
(L) Severability. If any provision of this subparagraph (ix)
or any application of any such provision is determined to be invalid by any
Federal or state court having jurisdiction over the issues, the validity of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.
(M) NYSE Settlement. Nothing in this Amendment shall preclude the
settlement of any transaction with respect to the Series A Preferred Shares of
the Corporation entered into through the facilities of the New York Stock
Exchange."
III.
This Amendment was adopted on September 26, 1996.
IV.
This Amendment was duly adopted by the Board of Directors without
Shareholder approval, as such approval was not required.
11
<PAGE> 12
IN WITNESS WHEREOF, Post Properties, Inc. has caused these Articles of
Amendment to be executed and sealed by its duly authorized officers this 30th
day of September, 1996.
POST PROPERTIES, INC.
By:
-----------------------------------
John A. Williams
Chairman and Chief Executive Officer
[CORPORATE SEAL]
Attest:
- ---------------------
Sherry W. Cohen
Senior Vice President and Secretary
12
<PAGE> 1
EXHIBIT 10
FIRST AMENDMENT TO
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
POST APARTMENT HOMES, L.P.
This First Amendment to First Amended and Restated Agreement of
Limited Partnership of Post Apartment Homes, L.P. (this "Amendment") is entered
into as of October 1, 1996, by and among Post Properties, Inc. (the "General
Partner") and the Limited Partners of Post Apartment Homes, L.P. All
capitalized terms used herein shall have the meanings given to them in the
First Amended and Restated Agreement of Limited Partnership of Post Apartment
Homes, L.P., dated July 22, 1993 (the "Partnership Agreement").
WHEREAS, the General Partner, on even date herewith, has issued
1,000,000 shares of its 8 1/2% Series A Cumulative Redeemable Preferred Shares,
par value $0.01 per share, having a liquidation preference equivalent to $50.00
per share (the "Series A Preferred Shares"), and has sold such Series A
Preferred Shares in a public offering;
WHEREAS, the General Partner desires to contribute the net proceeds of
the sale of the Series A Preferred Shares to the Partnership in exchange for
partnership interests in the Partnership as set forth herein;
WHEREAS, the General Partner is authorized to cause the Partnership to
issue interests in the Partnership to General Partner in exchange for such
contribution;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
Section 1. Contribution.
The General Partner hereby contributes to the Partnership the entire
net proceeds received by the General Partner from the issuance of the Series A
Preferred Shares. As provided in Section 4.3 of the Partnership Agreement, the
General Partner shall be deemed to have made a Capital Contribution to the
Partnership in the amount of the gross proceeds of such issuance, which is
$50,000,000.00, and the Partnership shall be deemed simultaneously to have
reimbursed the General Partner pursuant to Section 7.4.C of the Partnership
Agreement for the amount of the underwriters discount and other costs incurred
by the General Partner in connection with such issuance.
<PAGE> 2
Section 2. Issuance of Series A Preferred Partnership Units.
In consideration of the contribution to the Partnership made by the
General Partner pursuant to Section 1 hereof, the Partnership hereby issues to
the General Partner 1,000,000 Series A Preferred Partnership Units (as defined
herein).
Section 3. Definitions.
In addition to those terms defined in the Partnership Agreement, the
following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in the Partnership
Agreement and in this Amendment:
"Common Partnership Unit" means a Partnership Unit that is not
a Preferred Partnership Unit.
"Liquidation Preference Amount" means, with respect to any
Preferred Partnership Unit, the amount payable with respect to such
Preferred Partnership Unit (as established by the instrument
designating such Preferred Partnership Units) upon the voluntary or
involuntary dissolution, liquidation or winding up of the Partnership,
or upon the earlier redemption of such Preferred Partnership Units, as
the case may be.
"Preferred Partnership Unit" means any Partnership Unit issued
from time to time pursuant to Section 4.2 hereof that is designated by
the General Partner at the time of its issuance as a Preferred
Partnership Unit. Each Preferred Partnership Unit shall have such
designations, preferences and relative, participating, optional or
other special rights, powers and duties, including rights, powers and
duties senior to Limited Partner Interests and Common Partnership
Units, all as shall be determined by the General Partner subject to
the requirements of Section 4.2 hereof.
"Series A Preferred Partnership Unit" means a Partnership Unit
issued by the Partnership to the General Partner in consideration of
the contribution by the General Partner to the Partnership of the
entire net proceeds received by the General Partner from the issuance
of the Series A Preferred Shares. The Series A Preferred Partnership
Units shall constitute Preferred Partnership Units. The Series A
Preferred Partnership Units shall have the voting powers, designation,
preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions as are set
forth in Exhibit F, attached hereto. It is the intention of the
General Partner, in establishing the Series A Preferred Partnership
Units, that each Series A Preferred Partnership Unit shall be
substantially the economic equivalent of a Series A Preferred Share.
-2-
<PAGE> 3
"Series A Preferred Shares" means the 8 1/2% Series A
Cumulative Redeemable Preferred Shares, par value $0.01 per
share, having a liquidation preference equivalent to $50.00
per share, issued by the General Partner.
In addition, the definitions of "Partnership Unit," "Partnership Interest" and
"REIT Shares Amount" appearing in Article 1 of the Partnership Agreement are
hereby deleted in their entirety and the following definitions are inserted in
their place:
"Partnership Unit" means a fractional, undivided
share of the Partnership Interests of all Partners issued pursuant to
Sections 4.1 and 4.2. The ownership of Partnership Units shall be
evidenced by such form of certificate for units as the General Partner
adopts from time to time on behalf of the Partnership. Without
limitation on the authority of the General Partner as set forth in
Section 4.2 hereof, the General Partner may designate any Partnership
Units, when issued, as Common Partnership Units or as Preferred
Partnership Units, may establish any other class of Partnership Units,
and may designate one or more series of any class of Partnership Units.
"Percentage Interest" means, as to a Partner, with
respect to any class of Partnership Units held by such Partner, its
interest in such class of Partnership Units as determined by dividing
the number of Partnership Units in such class owned by such Partner by
the total number of Partnership Units in such class then outstanding.
"REIT Shares Amount" shall mean a number of REIT
Shares equal to the product of the number of Common Partnership Units
offered for redemption by a Redeeming Partner, multiplied by the
Conversion Factor; provided that in the event the General Partner
issues to all holders of REIT Shares rights, options, warrants or
convertible or exchangeable securities entitling the shareholders to
subscribe for or purchase REIT Shares, or any other securities 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.
Section 4. Requirement and Characterization of Distributions.
Section 5.1 of the Partnership Agreement is hereby deleted in its
entirety and the following new Section 5.1 is inserted in its place:
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<PAGE> 4
"Section 5.1 Requirement and Characterization of Distributions.
The General Partner shall 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 in the following order of priority:
(i) First, to the holders of the Preferred Partnership
Units in such amount as is required for the
Partnership to pay all distributions with respect to
such Preferred Partnership Units due or payable in
accordance with the instruments designating such
Preferred Partnership Units through the last day of
such quarter; such distributions shall be made to
such Partners in such order of priority and with such
preferences as have been established with respect to
such Preferred Partnership Units as of the last day
of such calendar quarter; and then
(ii) To the Partners in proportion to their respective
Percentage Interests in Common Partnership Units on
such Partnership Record Date;
provided that in no event may a Partner receive a distribution of
Available Cash with respect to a Partnership Unit if such Partner is
entitled to receive a distribution out of such Available Cash with
respect to a REIT Share for which such Partnership Unit has been
redeemed or exchanged. The General Partner shall take such reasonable
efforts, as determined by it in its sole and absolute discretion and
consistent with its qualification as a REIT, to distribute Available
Cash to the Limited Partners so as to preclude any such distribution
or portion thereof from being treated as part of a sale of property to
the Partnership by a Limited Partner under Section 707 of the Code or
the Regulations thereunder; provided that the General Partner and the
Partnership shall not have liability to a Limited Partner under any
circumstances as a result of any distribution to Limited Partner being
so treated.
Notwithstanding anything to the contrary contained herein, in
no event shall any Partner receive a distribution of Available Cash
with respect to any Common Partnership Unit with respect to any
quarter until such time as the Partnership has distributed to the
holders of the Preferred Partnership Units an amount sufficient to pay
all distributions payable with respect to such Preferred Partnership
Units through the last day of such quarter, in accordance with the
instruments designating such Preferred Partnership Units."
Section 5. Tax Provisions.
Section 6.1 of the Partnership Agreement is hereby deleted in its
entirety and the following new Section 6.1 is inserted in its place:
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<PAGE> 5
"Section 6.1 Allocations For Capital Account Purposes
For purposes of maintaining the Capital Accounts and in
determining the rights of the Partners among themselves, the
Partnership's items of income, gain, loss and deduction (computed in
accordance with Exhibit B hereof) shall be allocated among the
Partners in each taxable year (or portion thereof) as provided herein
below.
A. Net Income. After giving effect to the special allocations
set forth in Section 1 of Exhibit C, Net Income shall be allocated in
the following manner and order of priority:
(1) To the General Partner until the cumulative
allocations of Net Income under this Section 6.1.A.(1) equal
the cumulative Net Losses allocated to the General Partner
under Section 6.1.B.(5) hereof.
(2) To those Partners who have received allocations of
Net Loss under Section 6.1.B.(4) hereof until the cumulative
allocations of Net Income under this Section 6.1.A.(2) equal
such cumulative allocations of Net Loss (such allocation of
Net Income to be in proportion to the cumulative allocations
of Net Loss under such section to each such Partner).
(3) To the General Partner until the cumulative
allocations of Net Income under this Section 6.1.A.(3) equal
the cumulative allocations of Net Loss to the General Partner
under Section 6.1.B.(3) hereof.
(4) To those Partners who have received allocations of
Net Loss under Section 6.1.B.(2) hereof until the cumulative
allocations of Net Income under this Section 6.1.A.(4) equal
such cumulative allocations of Net Loss (such allocation of
Net Income to be in proportion to the cumulative allocations
of Net Loss under such section to each such Partner).
(5) To the Partners until the cumulative allocations of
Net Income under this Section 6.1.A.(5) equal the cumulative
allocations of Net Loss to such Partners under Section
6.1.B.(1) hereof (such allocation of Net Income to be in
proportion to the cumulative allocations of Net Loss under
such section to each such Partner).
(6) Any remaining Net Income shall be allocated to the
Partners who hold Common Partnership Units in proportion to
their respective Percentage Interests as holders of Common
Partnership Units.
B. Net Losses. After giving effect to the special allocations
set forth in Section 1 of Exhibit C, Net Losses shall be allocated to
the Partners as follows:
-5-
<PAGE> 6
(1) To the Partners who hold Common Partnership Units in
accordance with their respective Percentage Interests as
holders of Common Partnership Units, except as otherwise
provided in this Section 6.1.B.
(2) To the extent that an allocation of Net Loss under
Section 6.1.B.(1) would cause a Partner to have an Adjusted
Capital Account Deficit at the end of such taxable year (or
increase any existing Adjusted Capital Account Deficit of such
Partner), such Net Loss shall instead be allocated to those
Partners, if any, for whom such allocation of Net Loss would
not cause or increase an Adjusted Capital Account Deficit.
Solely for purposes of this Section 6.1.B.(2), the Adjusted
Capital Account Deficit, in the case of the General Partner,
shall be determined without regard to the amount credited to
the General Partner's Capital Account for the aggregate
Liquidation Preference Amount attributable to the General
Partner's Preferred Partnership Units, and in the case of a
Principal or a Principal-Controlled Partnership, shall be
determined without regard to such Partner's deficit Capital
Account restoration obligation under Section 13.3.B hereof.
The Net Loss allocated under this Section 6.1.B.(2) shall be
allocated among the Partners who may receive such allocation
in proportion to and to the extent of the respective amounts
of Net Loss that could be allocated to such Partners without
causing such Partners to have an Adjusted Capital Account
Deficit.
(3) Any remaining Net Loss shall be allocated to the
General Partner to the extent that such allocation of Net Loss
would not cause or increase an Adjusted Capital Account
Deficit of the General Partner.
(4) Any remaining Net Loss shall be allocated to the
Principals and the Principal-Controlled Partnerships in
accordance with their respective Percentage Interests;
provided that if, after the death of a Principal, the estate
of such Principal or any Principal-Controlled Partnership with
respect to such Principal elects pursuant to Section 13.3.C
hereof to eliminate or reduce its deficit Capital Account
restoration obligation under Section 13.3.B hereof, Net Losses
shall not be allocated to such Partner to the extent that such
allocation would cause such Partner to have an Adjusted
Capital Account Deficit (or would increase any existing
Adjusted Capital Account Deficit of such Partner) as of the
end of such taxable year, and instead shall be allocated to
those Principals and Principal-Controlled Partnerships as to
whom the foregoing limitation does not apply.
(5) Any remaining Net Loss shall be allocated to the
General Partner.
C. For purposes of Regulations Section 1.752-3(a), the
Partners agree that Nonrecourse Liabilities of the Partnership in
excess of the sum of (i) the amount of Partnership Minimum Gain and
(ii) the total amount of Nonrecourse Built-in Gain shall be allocated
among the Partners in accordance with their respective Percentage
Interests.
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<PAGE> 7
D. 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 Exhibit C, 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."
In addition, Exhibit C to the Partnership Agreement is hereby deleted in its
entirety and Exhibit C attached hereto is hereby inserted in its place.
Section 6. Redemption Right.
The Partnership Agreement is hereby amended by adding the following
new Sections 8.6.D and 8.6.E to the Partnership Agreement, immediately
following Section 8.6.C:
"D. Notwithstanding anything contained in Sections 8.6.A,
8.6.B and 8.6.C, no Partner shall be entitled to exercise the
Redemption Right pursuant to Section 8.6.A with respect to any
Preferred Partnership Unit unless (i) such Preferred Partnership Unit
has been issued to and is held by a Partner other than the General
Partner, and (ii) the General Partner has expressly granted to such
Partner the right to redeem such Preferred Partnership Units pursuant
to Section 8.6.A.
E. Preferred Partnership Units shall be redeemed, if at all,
only in accordance with such redemption rights or options as are set
forth with respect to such Preferred Partnership Units (or class or
series thereof) in the instruments designating such Preferred
Partnership Units (or class or series thereof)."
Section 7. General Amendments to Partnership Agreement.
Notwithstanding anything contained herein, all references to
Partnership Units in Sections 7.3.B, 7.5.B and 11.2.C of the Partnership
Agreement shall be deemed to refer solely to Common Partnership Units, and not
to Preferred Partnership Units. In addition, references in Sections 14.1 and
14.2 of the Partnership Agreement to Percentage Interests of the Limited
Partners shall be deemed to refer solely to Percentage Interests of Limited
Partners with respect to Common Partnership Units. Further, the reference to
Partnership Interests appearing in Section 14.2.A shall be deemed to refer only
to Partnership Interests held with respect to Common Partnership Units.
-7-
<PAGE> 8
Section 8. Exhibits to Partnership Agreement.
The General Partner shall maintain the information set forth in
Exhibit A to the Partnership Agreement, as such information shall change from
time to time, in such form as the General Partner deems appropriate for the
conduct of the Partnership affairs, and Exhibit A shall be deemed amended from
time to time to reflect the information so maintained by the General Partner,
whether or not a formal amendment to the Partnership Agreement has been
executed amending such Exhibit A. In addition to the issuance of Series A
Preferred Partnership Units to the General Partner pursuant to this Amendment,
such information shall reflect (and Exhibit A shall be deemed amended from time
to time to reflect) the issuance of any additional Partnership Units to the
General Partner or any other Person, the transfer of Partnership Units and the
redemption of any Partnership Units, all as contemplated herein.
In addition, the Partnership Agreement is hereby amended by attaching
thereto as Exhibit F the Exhibit F attached hereto.
-8-
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed the Amendment
under seal as of the date first written above.
GENERAL PARTNER:
POST PROPERTIES, INC.,
a Georgia corporation
By:
-----------------------
Name:
---------------------
Title:
--------------------
Attest:
-------------------
Name:
--------------
Title:
-------------
[CORPORATE SEAL]
LIMITED PARTNERS:
POST PROPERTIES, INC.,
a Georgia corporation,
as attorney-in-fact for the
Limited Partners
By:
-----------------------
Name:
---------------------
Title:
--------------------
Attest:
-------------------
Name:
--------------
Title:
-------------
[CORPORATE SEAL]
-9-
<PAGE> 10
EXHIBIT C
SPECIAL ALLOCATION RULES
1. Special Allocation Rules.
Notwithstanding any other provision of the Agreement or this Exhibit
C, the following special allocations shall be made in the following order:
1.A. Minimum Gain Chargeback. Notwithstanding the provisions of
Section 6.1 of the Agreement or any other provisions of this Exhibit C, if
there is a net decrease in Partnership Minimum Gain during any Partnership
Year, each Partner shall be specially allocated items of Partnership gross
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 1.A is intended to comply with the minimum gain
chargeback requirements in Regulations Section 1.704-2(f) and for purposes of
this Section 1.A only, each Partner's Adjusted Capital Account Deficit shall be
determined prior to any other allocations pursuant to Section 6.1 of this
Agreement with respect to such Partnership Year and without regard to any
decrease in Partner Minimum Gain during such Partnership Year.
1.B. Partner Minimum Gain Chargeback. Notwithstanding any other
provision of Section 6.1 of the Agreement or any other provisions of this
Exhibit C (except Section 1.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 gross
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 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 1.704-2(i)(4). This
Section 1.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 1.B, each Partner's Adjusted
Capital Account Deficit shall be determined prior to any other allocations
pursuant to Section 6.1 of the Agreement or this Exhibit C with respect to such
Partnership Year, other than allocations pursuant to Section 1.A hereof.
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<PAGE> 11
1.C. Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-
1(b)(2)(ii)(d)(6), and after giving effect to the allocations required under
Sections 1.A and 1.B hereof, such Partner has an Adjusted Capital Account
Deficit, items of Partnership gross income and gain shall be specifically
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.
1.D. Nonrecourse Deductions. Nonrecourse Deductions for any
Partnership Year shall be allocated to the Partners in accordance with their
respective Percentage Interests. If the General Partner determines in its good
faith discretion that Nonrecourse Deductions for any Partnership Year must be
allocated in a different ratio to satisfy the safe harbor requirements of the
Regulations promulgated under Section 704(b) of the Code, the General Partner
is authorized, upon notice to the Limited Partners, to revise the prescribed
ratio for such Partnership Year to the numerically closest ratio which does
satisfy such requirements.
1.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).
1.F. Priority Allocation With Respect To Preferred Partnership
Units. All or a portion of the remaining items of Partnership gross income or
gain for the Partnership Year, if any, shall be specially allocated to the
General Partner in an amount equal to the excess, if any, of the cumulative
distributions received by the General Partner pursuant to Section 5.1(i) hereof
for the current Partnership Year and all prior Partnership Years (other than
any distributions that are treated as being in satisfaction of the Liquidation
Preference Amount for any Preferred Partnership Units) over the cumulative
allocations of Partnership gross income and gain to the General Partner under
this Section 1.F for all prior Partnership Years.
1.G. 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
1.704-1(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.
2. Allocations for Tax Purposes
2.A. Except as otherwise provided in this Section 2, for federal
income tax purposes, each item of income, gain, loss and deduction shall be
allocated among the Partners in the same manner
C-2
<PAGE> 12
as its correlative item of "book" income, gain, loss or deduction is allocated
pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit C.
2.B. 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:
1. In the case of a Contributed Property, such items
attributable thereto shall be allocated 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 basis at the time of contribution;
and
a. any item of Residual Gain or Residual Loss
attributable to a Contributed Property shall
be allocated among the Partners in the same
manner as its correlative item of "book" gain
or loss is allocated pursuant to Section 6.1
of the Agreement and Section 1 of this
Exhibit C.
2. In the case of an Adjusted Property, such items shall
(1) 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 and the allocations thereof pursuant to Exhibit B and
(2) second, in the event such property
was originally a Contributed Property, be allocated among the Partners in a
manner consistent with Section 2.B.(1) of this Exhibit C; and
a. any item of Residual Gain or Residual Loss
attributable to an Adjusted Property shall be
allocated among the Partners in the same
manner as its correlative item of "book" gain
or loss is allocated pursuant to Section 6.1
of the Agreement and Section 1 of this
Exhibit C.
3. 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 Section 6.1 of the
Agreement and Section 1 of this Exhibit C.
2.C. To the extent Regulations promulgated pursuant to Section
704(c) of the Code permit a partnership to utilize alternative methods to
eliminate the disparities between the agreed value of property and its adjusted
basis (including, without limitation, the implementation of curative
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<PAGE> 13
allocations), the General Partner shall have the authority to elect the method
to be used by the Partnership and such election shall be binding on all
Partners.
Without limiting the foregoing, the General Partner shall take all
steps (including, without limitation, implementing curative allocations) that
it determines are necessary or appropriate to ensure that the amount of taxable
gain required to be recognized by the General Partner upon a disposition by the
Partnership of any Contributed Property or Adjusted Property does not exceed
the sum of (i) the gain that would be recognized by the General Partner if such
Property had an adjusted tax basis at the time of disposition equal to the
704(c) Value of such property plus (ii) the deductions for depreciation,
amortization or other cost recovery actually allowed to the General Partner
with respect to such property for federal income tax purposes (after giving
effect to the "ceiling rule).
C-4
<PAGE> 14
EXHIBIT F
POST APARTMENT HOMES, L.P.
DESIGNATION OF THE VOTING POWERS, DESIGNATION, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS
OF THE
SERIES A PREFERRED PARTNERSHIP UNITS
The following are the terms of the Series A Preferred Partnership
Units established pursuant to this Amendment:
(a) NUMBER. The maximum number of authorized Series A Preferred
Partnership Units shall be 1,150,000.
(b) RELATIVE SENIORITY. In respect of rights to receive quarterly
distributions and to participate in distributions of payments in the event of
any liquidation, dissolution or winding up of the Partnership, the Series A
Preferred Partnership Units shall rank senior to the Common Partnership Units
and any other class or series of Partnership Units of the Partnership ranking,
as to quarterly distributions and upon liquidation, junior to the Series A
Preferred Partnership Units (collectively, "Junior Partnership Units").
(c) QUARTERLY DISTRIBUTIONS.
(1) The General Partner, in its capacity as the holder of the then
outstanding Series A Preferred Partnership Units, shall be entitled to receive,
when and as declared by the General Partner out of any funds legally available
therefor, cumulative quarterly distributions at the rate of $4.25 per Series A
Preferred Partnership Unit per year, payable in equal amounts of $1.0625 per
unit quarterly in cash on the last day of each March, June, September, and
December or, if not a Business Day (as hereinafter defined), the next
succeeding Business Day beginning on December 31, 1996 (each such day being
hereafter called a "Quarterly Distribution Date" and each period ending on a
Quarterly Distribution Date being hereinafter called a "Distribution Period").
Quarterly distributions on each Series A Preferred Partnership Unit shall
accrue and be cumulative from and including the date of original issue thereof,
whether or not (i) quarterly distributions on such Series A Preferred
Partnership Units are earned or declared or (ii) on any Quarterly Distribution
Date there shall be funds legally available for the payment of quarterly
distributions. Quarterly distributions paid on the Series A Preferred
Partnership Units in an amount less than the total amount of such quarterly
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distributions at the time accrued and payable on such Partnership Units shall
be allocated pro rata on a per unit basis among all such Series A Preferred
Partnership Units at the time outstanding.
"Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in New
York City are authorized or required by law, regulation or executive order to
close.
(2) The amount of any quarterly distributions accrued on any
Series A Preferred Partnership Units at any Quarterly Distribution Date shall
be the amount of any unpaid quarterly distributions accumulated thereon, to and
including such Quarterly Distribution Date, whether or not earned or declared,
and the amount of quarterly distributions accrued on any Series A Preferred
Partnership Units at any date other than a Quarterly Distribution Date shall be
equal to the sum of the amount of any unpaid quarterly distributions
accumulated thereon, to and including the last preceding Quarterly Distribution
Date, whether or not earned or declared, plus an amount calculated on the basis
of the annual distribution rate of $4.25 per unit for the period after such
last preceding Quarterly Distribution Date to and including the date as of
which the calculation is made based on a 360-day year of twelve 30-day months.
(3) Except as provided herein, the Series A Preferred Partnership
Units shall not be entitled to participate in the earnings or assets of the
Partnership, and no interest, or sum of money in lieu of interest, shall be
payable in respect of any distribution or distributions on the Series A
Preferred Partnership Units which may be in arrears.
(4) Any distribution made on the Series A Preferred Partnership
Units shall be first credited against the earliest accrued but unpaid quarterly
distribution due with respect to such Partnership Units which remains payable.
(5) No quarterly distributions on the Series A Preferred
Partnership Units shall be authorized by the General Partner or be paid or set
apart for payment by the Partnership at such time as the terms and provisions
of any agreement of the General Partner or the Partnership, including any
agreement relating to its indebtedness, prohibits such authorization, payment
or setting apart for payment or provides that such authorization, payment or
setting apart for payment would constitute a breach thereof or a default
thereunder, or if such authorization or payment shall be restricted or
prohibited by law. Notwithstanding the foregoing, quarterly distributions on
the Series A Preferred Partnership Units will accrue whether or not the
Partnership has earnings, whether or not there are funds legally available for
the payment of such quarterly distributions and whether or not such quarterly
distributions are authorized.
(d) LIQUIDATION RIGHTS.
(1) Upon the voluntary or involuntary dissolution, liquidation or
winding up of the Partnership, the General Partner, in its capacity as the
holder of the Series A Preferred Partnership Units then outstanding, shall be
entitled to receive and to be paid out of the assets of the Partnership
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available for distribution to its partners, before any payment or distribution
shall be made on any Junior Partnership Units, the amount of $50.00 per Series
A Preferred Partnership Unit, plus accrued and unpaid quarterly distributions
thereon.
(2) After the payment to the holders of the Series A Preferred
Partnership Units of the full preferential amounts provided for herein, the
General Partner, in its capacity as the holder of the Series A Preferred
Partnership Units as such, shall have no right or claim to any of the remaining
assets of the Partnership.
(3) If, upon any voluntary or involuntary dissolution,
liquidation, or winding upon of the Partnership, the amounts payable with
respect to the preference value of the Series A Preferred Partnership Units and
any other Preferred Partnership Units of the Partnership ranking as to any such
distribution on a parity with the Series A Preferred Partnership Units are not
paid in full, the holders of the Series A Preferred Partnership Units and of
such other Preferred Partnership Units will share ratably in any such
distribution of assets of the Partnership in proportion to the full respective
preference amounts to which they are entitled.
(4) Neither the sale, lease or conveyance of all or substantially
all of the property or business of the Partnership, nor the merger or
consolidation of the Partnership into or with any other entity or the merger or
consolidation of any other entity into or with the Partnership, shall be deemed
to be a dissolution, liquidation or winding up, voluntary or involuntary, for
the purposes hereof.
(e) REDEMPTION.
(1) OPTIONAL REDEMPTION. On and after October 1, 2026, the General
Partner may, at its option, cause the Partnership to redeem at any time all or,
from time to time, part of the Series A Preferred Partnership Units at a price
per unit (the " Redemption Price"), payable in cash, of $50, together with all
accrued and unpaid distributions to the and including the date fixed for
redemption (the "Redemption Date"). The Series A Preferred Partnership Units
have no stated maturity and will not be subject to any sinking fund or
mandatory redemption provisions.
(2) PROCEDURES OF REDEMPTION.
(i) At any time that the General Partner exercises its
right to redeem all or any of the Series A Preferred Shares, the
General Partner shall exercise its right to cause the Partnership to
redeem an equal number of Series A Preferred Partnership Units in the
manner set forth herein.
(ii) No Series A Preferred Partnership Units may be
redeemed except from proceeds from the sale of capital stock of the
General Partner, including but not limited to common stock, preferred
stock, depositary shares, interests, participations or other ownership
interests (however designated) and any rights (other than debt
securities convertible into the exchangeable for equity securities) or
options to purchase any of the foregoing. The
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proceeds of such sale of capital stock of the General Partner shall be
contributed by the General Partner to the Partnership pursuant to the
requirements of Section 4.2 of the Partnership Agreement.
(f) VOTING RIGHTS. Except as required by law, the General Partner,
in its capacity as the holder of the Series A Preferred Partnership Units,
shall not be entitled to vote at any meeting of the Partners or for any other
purpose or otherwise to participate in any action taken by the Partnership or
the Partners, or to receive notice of any meeting of Partners.
(g) CONVERSION. The Series A Preferred Partnership Units are not
convertible into or exchangeable for an other property or securities of the
Partnership.
(h) RESTRICTIONS ON OWNERSHIP. The Series A Preferred Partnership
Units shall be owned and held solely by the General Partner.
(i) GENERAL. The rights of the General Partner, in its capacity as
holder of the Series A Preferred Partnership Units, are in addition to and not
in limitation on any other rights or authority of the General Partner, in any
other capacity, under the Partnership Agreement. In addition, nothing contained
herein shall be deemed to limit or otherwise restrict any rights or authority
of the General Partner under the Partnership Agreement, other than in its
capacity as the holder of the Series A Preferred Partnership Units.
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