Exhibit
8.1
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HUNTON
& WILLIAMS LLP
RIVERFRONT
PLAZA, EAST TOWER
951
EAST BYRD STREET
RICHMOND,
VIRGINIA 23219-4074
TEL
804
• 788 • 8200
FAX
804
• 788 • 8218
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August
5, 2005
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Hersha
Hospitality Trust
510
Walnut Street, 9
th
Floor
Philadelphia,
Pennsylvania 19106
Hersha
Hospitality Trust
Qualification
as
Real
Estate Investment Trust
Ladies
and Gentlemen:
We
have
acted as counsel to Hersha Hospitality Trust, a Maryland real estate investment
trust (the “Company”), in connection with the preparation of a Registration
Statement on Form S-3 (File No. 333-113061) declared effective by the Securities
and Exchange Commission (“SEC”) on April 2, 2004 (the “Registration Statement”),
with respect to the offer and sale of up to $200,000,000 of the common shares
of
beneficial interest, preferred shares of beneficial interest, and debt
securities of the Company, and the offer and sale pursuant to the Registration
Statement of up to 2,400,000 8.0% Series A Cumulative Redeemable Preferred
Shares of beneficial interest, par value $0.01 per share, of the Company (the
“Preferred Shares”) pursuant to a Prospectus Supplement filed with the
Registration Statement (the “Prospectus Supplement”). You have requested our
opinion regarding certain U.S. federal income tax matters.
The
Company owns, through Hersha Hospitality Limited Partnership, a Virginia limited
partnership (the “Operating Partnership”), and its subsidiary partnerships and
limited liability companies (the “Subsidiary Partnerships”), interests in
thirty-six hotels and associated personal property (the “Hotels”). One of the
Subsidiary Partnerships, HT/CNL Metro Hotels, L.P., a Delaware limited
partnership (the “CNL JV”), is owned 33.333% by the Operating Partnership and
66.667% by CNL Hospitality Partners, L.P., a Delaware limited partnership.
Another of the Subsidiary Partnerships, PRA Glastonbury, LLC, a Delaware limited
partnership (the “PRA Partnership”), is owned 40% by the Operating Partnership
and 60% by a third party. Another of the Subsidiary Partnerships, Logan
Hospitality Associates, LLC, a Massachusetts limited liability company
(“Logan”), is owned 55% by the Operating Partnership and 45% by third parties.
Another of the Subsidiary Partnerships, Inn America Hospitality at Ewing, LLC,
a
New Jersey limited liability company (“Inn America”), is owned 50% by the
Operating Partnership and 50% by a third party. Another of the Subsidiary
Partnerships, Hiren Boston, LLC, is 49.9% by a wholly-owned subsidiary of the
Operating Partnership and 50.1% by a third party. The Operating Partnership,
directly or indirectly, owns all of the equity interests in each of the
remaining Subsidiary Partnerships. The Subsidiary Partnerships lease (i) 32
of
the Hotels to 44 New England Management Company, a Virginia corporation, a
subsidiary of 44 New England Management Company, or a partnership of which
44
New England is a partner (collectively, “44 New England”); (ii) one of the
Hotels to Hersha CNL TRS, Inc., a Delaware corporation (“Hersha CNL TRS”); (iii)
one of the Hotels to Hersha PRA TRS, Inc., a Delaware corporation (“Hersha PRA
TRS”); (iv) one of the Hotels to Revere Hotel Group, LLC, a Massachusetts
limited liability company (“Revere TRS”); and (v) one of the Hotels to HT Inn
America TRS, Inc., a Delaware corporation (“Inn America TRS” and, together with
44 New England, Hersha CNL TRS, Hersha PRA TRS, and Revere TRS, the “TRS
Lessees”). The operating lease agreements between each TRS Lessee and the
Subsidiary Partnerships (collectively, the “Leases”) are substantially similar.
44 New England is a wholly owned subsidiary of the Operating Partnership, Hersha
CNL TRS is a wholly owned subsidiary of the CNL JV, Hersha PRA TRS is a wholly
owned subsidiary of PRA Partnership, Revere TRS is owned 99% by Logan and 1%
by
third parties, and HT Inn America is wholly owned by Inn America. Hersha
Hospitality Management, L.P., a Pennsylvania limited partnership (“HHMLP”),
operates and manages 35 of Hotels pursuant to substantially similar management
agreements or management agreements that have been reviewed by us (collectively,
the “HHMLP Management Agreements”), and South Bay Boston Management, Inc.
operates and manages one of the Hotels pursuant to a management agreement
(together with the HHMLP Management Agreements, the “Management Agreements”).
In
giving
this opinion letter, we have examined the following (collectively, the “Reviewed
Documents”):
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1.
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the
Company’s Amended and Restated Declaration of Trust, filed on January 15,
1999 with the Department of Assessments and Taxation of the State
of
Maryland (the “Declaration of
Trust”);
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2.
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the
Articles Supplementary to the Declaration of Trust setting forth
the terms
of the Company’s Series A Convertible Preferred
Shares;
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4.
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the
Amended and Restated Agreement of Limited Partnership of the Operating
Partnership, dated January 26, 1999 (the “Operating Partnership
Agreement”), among the Company, as general partner, and several limited
partners;
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5.
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the
First Amendment to the Operating Partnership Agreement dated as of
December 31, 1999;
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6.
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the
Second Amendment to the Operating Partnership Agreement dated as
of April
21, 2003;
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7.
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the
partnership and limited liability company agreements governing the
Subsidiary Partnerships (the “Subsidiary Partnership Agreements”);
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8.
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the
Registration Statement, the prospectus filed as a part of the Registration
Statement (the “Prospectus”), and the Prospectus
Supplement;
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10.
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the
Management Agreements;
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11.
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the
taxable REIT subsidiary elections for the TRS Lessees; HHM Leasehold
Interests, Inc.,
a
Delaware corporation; HHLP King of Prussia, Inc., a Pennsylvania
corporation; HHLP Malvern, Inc., a Pennsylvania corporation; HHLP
Oxford
Valley, Inc., a Pennsylvania corporation; and HHLP Wilmington, Inc.,
a
Delaware corporation;
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12.
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such
other documents or agreements as we have deemed necessary or appropriate
for purposes of this opinion.
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In
connection with the opinion rendered below, we have assumed, with your consent,
that:
1.
each
of
the documents referred to above has genuine signatures, has been duly
authorized, executed, and delivered; is authentic, if an original, or is
accurate, if a copy; and has not been amended;
2.
during
its taxable year ending December 31, 2005 and future taxable years, the
representations contained in a certificate, dated the date hereof and executed
by a duly appointed officer of the Company (the “Officer’s Certificate”), will
be true for such years;
3.
the
Company will not make any amendments to its organizational documents, the
Operating Partnership Agreement, or the Subsidiary Partnership Agreements after
the date of this opinion that would have the effect of altering the facts upon
which the opinions set forth below are based;
4.
the
Operating Partnership and each Subsidiary Partnership will be operated in
accordance with the terms of the Operating Partnership Agreement and the
Subsidiary Partnership Agreement, as applicable, and in accordance with the
applicable law of the state of formation; and
5.
all
of
the obligations imposed by or described in the Reviewed Documents have been
and
will continue to be performed or satisfied in accordance with their terms.
In
connection with the opinion rendered below, we also have relied upon the
correctness of the factual representations contained in the Officer’s
Certificate. After reasonable inquiry, we are not aware of any facts
inconsistent with the representations set forth in the Officer’s Certificate.
Furthermore, where such factual representations involve terms defined in the
Internal Revenue Code of 1986, as amended (the “Code”), the Treasury regulations
thereunder (the “Regulations”), published rulings of the Internal Revenue
Service (the “Service”), or other relevant authority, we have reviewed with the
individuals making such representations the relevant provisions of the Code,
the
applicable Regulations and published administrative interpretations
thereof.
Based
on
the Reviewed Documents, the assumptions set forth above, the representations
set
forth in the Officer’s Certificate, and the factual matters discussed in the
Prospectus under the caption “Federal Income Tax Consequences of Our Status as a
REIT” and in the Prospectus Supplement under the caption “Additional Federal
Income Tax Considerations” (which are incorporated herein by reference), we are
of the opinion that:
(a)
the
Company qualified to be taxed as a real estate investment trust (“REIT”)
pursuant to sections 856 through 860 of the Code, for its taxable years ended
December 31, 1999 through December 31, 2004, and the Company’s organization and
current and proposed method of operation will enable it to continue to qualify
for taxation as REIT under the Code for its taxable year ending December 31,
2005, and in the future; and
(b)
the
descriptions of the law and the legal conclusions contained in the Prospectus
under the caption “Federal Income Tax Consequences of Our Status as a REIT” and
in the Prospectus Supplement under the caption “Additional Federal Income Tax
Considerations” are correct in all material respects, and the discussion
thereunder fairly summarizes the federal income tax considerations that are
likely to be material to a holder of the Preferred Shares.
We
will
not review on a continuing basis the Company’s compliance with the documents or
assumptions set forth above, or the representations set forth in the Officer’s
Certificate. Accordingly, no assurance can be given that the actual results
of
the Company’s operations for any given taxable year will satisfy the
requirements for qualification and taxation as a REIT.
The
foregoing opinion is based on current provisions of the Code and the
Regulations, published administrative interpretations thereof, and published
court decisions. The Service has not issued Regulations or administrative
interpretations with respect to various provisions of the Code relating to
REIT
qualification. No assurance can be given that the law will not change in a
way
that will prevent the Company from qualifying as a REIT.
The
foregoing opinion is limited to the U.S. federal income tax matters addressed
herein, and no other opinions are rendered with respect to other federal tax
matters or to any issues arising under the tax laws of any other country, or
any
state or locality. We undertake no obligation to update the opinion expressed
herein after the date of this letter. This opinion letter is solely for the
information and use of the addressee and the holders of the Preferred Shares
pursuant to the Prospectus Supplement (except as provided in the next
paragraph), and it speaks only as of the date hereof. Except as provided in
the
next paragraph, this opinion letter may not be distributed, relied upon for
any
purpose by any other person, quoted in whole or in part or otherwise reproduced
in any document, or filed with any governmental agency without our express
written consent.
We
hereby
consent to the filing of this opinion as an exhibit to the Registration
Statement. We also consent to the references to Hunton & Williams LLP under
the captions “Federal Income Tax Considerations” and “Legal Matters” in the
Prospectus and “Additional Federal Income Tax Considerations” and “Legal
Matters” in the Prospectus Supplement. In giving this consent, we do not admit
that we are in the category of persons whose consent is required by Section
7 of
the Securities Act of 1933, as amended, or the rules and regulations promulgated
thereunder by the SEC.
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Very
truly yours,
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/s/
Hunton & Williams LLP
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Exhibit
10.1
TO
AGREEMENT
OF LIMITED PARTNERSHIP
OF
HERSHA
HOSPITALITY LIMITED PARTNERSHIP
THIS
THIRD AMENDMENT TO THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
(this “Third Amendment”) dated as of August 5, 2005, is entered into by HERSHA
HOSPITALITY TRUST, a Maryland real estate investment trust, as general partner
(the “General Partner”) of HERSHA HOSPITALITY LIMITED PARTNERSHIP, a limited
partnership formed under the laws of the Commonwealth of Virginia (the
“Partnership”), for itself and on behalf of the limited partners of the
Partnership.
WHEREAS,
the Amended and Restated Agreement of Limited Partnership of the Partnership
was
executed on January 26, 1999, a First Amendment thereto was executed on December
31, 1999, and a Second Amendment thereto was executed on April 21, 2003 (the
“Partnership Agreement”); and
WHEREAS,
Section 4.02(a) of the Partnership Agreement authorizes the General Partner
to
cause the Partnership to issue additional Partnership Units in one or more
classes or series, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties as shall
be
determined by the General Partner, without the approval of the Limited Partners;
and
WHEREAS,
on August 5, 2005, the General Partner issued 2,400,000 shares of 8.00% Series
A
Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $0.01
per share (the “Series A Preferred Shares,” each a “Series A Preferred Share”)
at a gross offering price of $25.00 per Series A Preferred Share and, in
connection therewith, the General Partner, pursuant to Section 4.02(b) of the
Agreement, is contributing the proceeds of such issuance to the Partnership
and
causing the Partnership to issue to the General Partner Series A Preferred
Partnership Units (as hereinafter defined); and
WHEREAS,
pursuant to the authority granted to the General Partner pursuant to Sections
4.02(a) and Article XI of the Partnership Agreement and as authorized by the
resolutions of the General Partner dated July 14, 2005, the General Partner
desires to amend the Partnership Agreement
(i)
to
reclassify the existing Series A Preferred Partnership Units established by
the
Second Amendment to the Partnership Agreement on April 23, 2003, into a
reclassified and redesignated class of Partnership Units, the Series A Preferred
Partnership Units (as hereinafter defined), and to set forth the designations,
rights, powers, preferences and duties of such Series A Preferred Partnership
Units,
(ii)
to
issue the Series A Preferred Partnership Units to the General Partner and (iii)
to make certain other changes to the Partnership Agreement.
NOW,
THEREFORE, in consideration of good and valuable consideration, the receipt
and
sufficiency of which hereby are acknowledged, the General Partner hereby amends
the Partnership Agreement as follows:
1.
The
Partnership Agreement is hereby amended by the addition of a new annex thereto,
entitled Annex A, in the form attached hereto, which sets forth the
designations, allocations, preferences and other special rights, powers and
duties of the Series A Preferred Partnership Units and which shall be attached
to and made a part of the Agreement.
2.
Pursuant
to Section 4.02(a) of the Partnership Agreement, effective as of August 5,
2005,
the issuance date of the Series A Preferred Partnership Units by the General
Partner, the Partnership hereby issues 2,400,000 Series A Preferred Partnership
Units to the General Partner. The Series A Preferred Partnership Units have
been
created and are being issued in conjunction with the General Partner’s issuance
of the Series A Preferred Shares, and as such, the Series A Preferred
Partnership Units are intended to have designations, preferences and other
rights, all such that the economic interests are substantially identical to
the
designations, preferences and other rights of the Series A Preferred Shares,
and
the terms of this Third Amendment, including without limitation the attached
Annex A, shall be interpreted in a fashion consistent with this intent. In
return for the issuance to the General Partner of the Series A Preferred
Partnership Units, the General Partner has contributed to the Partnership the
funds raised through its issuance of the Series A Preferred Partnership Units
(the General Partner’s capital contribution shall be deemed to equal the amount
of the gross proceeds of that share issuance (
i.e.
,
the net
proceeds actually contributed, plus any underwriter’s discount or other expenses
incurred, with any such discount or expense deemed to have been incurred by
the
General Partner on behalf of the Partnership)).
3.
In
order
to reflect the issuance of the Series A Preferred Partnership Units, Exhibit
A
to the Partnership Agreement is hereby amended by adding to the end of such
Exhibit A the following table:
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Key
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Partner
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Cash
Contribution
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Agreed
Value of Capital Contribution
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Series
A Preferred Partnership Units
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Percentage
Interest of Series
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Hersha
Hospitality Trust
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$58,110,000
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$58,110,000
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2,400,000
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100.00%
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4.
Section
8.05(c) of the Partnership Agreement is hereby amended by inserting the
following new clause (v) and renumbering the existing clause “(v)” as clause
“(vi)”: “(v) cause any person who operates Property on behalf of a “taxable REIT
subsidiary” of the Company, as defined in Section 856(1) of the Code, which
Property is a “qualified lodging facility” within the meaning of Section
856(d)(9)(D) of the Code that is leased to such taxable REIT subsidiary, to
fail
to qualify as an “eligible independent contractor” within the meaning of Section
856(d)(9)(A) of the Code with respect to such taxable REIT
subsidiary.”
5.
This
Third Amendment shall replace the Second Amendment in its entirety.
6.
The
foregoing recitals are incorporated in and are part of this Third
Amendment.
7.
Except
as
specifically defined herein, all capitalized terms shall have the definitions
provided in the Partnership Agreement. This Third Amendment has been authorized
by the General Partner pursuant to Article XI of the Partnership Agreement
and
does not require execution by the Limited Partners. No other changes to the
Partnership Agreement are authorized under this Third Amendment.
[Signature
Page Follows]
IN
WITNESS WHEREOF, this Third Amendment has been executed as of the date first
above written.
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GENERAL
PARTNER:
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HERSHA
HOSPITALITY TRUST,
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a
Maryland real estate investment trust
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By:
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/s/
Ashish R. Parikh
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Name:
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Ashish
R. Parikh
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Title:
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Chief
Financial Officer
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ANNEX
A
DESIGNATION
OF THE SERIES A PREFERRED PARTNERSHIP UNITS
OF
HERSHA
HOSPITALITY LIMITED PARTNERSHIP
1.
Designation
and Number
.
A
series of preferred partnership units, designated the “Series A Preferred
Partnership Units” (the “Series A Preferred Partnership Units”), is hereby
established. The number of Series A Preferred Partnership Units hereby
authorized shall be 2,400,000. The terms of this Annex A to the Third Amendment
replace in their entirety the terms of the Second Amendment previously
designating the Series A Preferred Partnership Units on April 21, 2003.
2.
Rank
.
The
Series A Preferred Partnership Units shall, with respect to distribution rights
and rights upon liquidation, dissolution or winding up of the Partnership,
rank
(a) senior to all classes or series of Partnership Units the terms of which
do
not specifically provide that such units rank on a parity with or senior to
the
Series A Preferred Partnership Units (the “Common Units”); (b) on a parity with
all other Partnership Units issued by the Partnership the terms of which
specifically provide that such Partnership Units rank on a parity with the
Series A Preferred Partnership Units as to the payment of distributions and
the
distribution of assets in the event of any liquidation, dissolution or winding
up; and (c) junior to (i) all indebtedness of the Partnership and (ii)
Partnership Units issued by the Partnership the terms of which specifically
provide that such Partnership Units rank senior to the Series A Preferred
Partnership Units as to the payment of distributions and the distribution of
assets in the event of any liquidation, dissolution or winding up.
a.
Holders
of the then outstanding Series A Preferred Partnership Units shall be entitled
to receive, when and as declared by the Partnership, out of funds legally
available for the payment of distributions, cumulative cash distributions at
the
rate of 8.00% per year of the $25.00 liquidation preference (equivalent to
a
fixed annual amount of $2.00 per share). Distributions on the Series A Preferred
Partnership Units are payable quarterly in arrears on January 15, April 15,
July
15 and October 15 of each year and, if such day is not a business day, the
next
succeeding business day, commencing on October 15, 2005 (each, a “Distribution
Payment Date”). The quarterly period between Distribution Payment Dates is
referred to herein as a “distribution period” and the distribution which shall
accrue in respect of any full distribution period shall be $0.50 regardless
of
the actual number of days in such full distribution period. The first
distribution will be for less than a full quarter and will cover the period
from
August 5, 2005 to October 15, 2005. Such distribution and any distribution
payable on the Series A Preferred Partnership Units for any partial distribution
period will be computed on the basis of a 360-day year consisting of twelve
30-day months. Distributions will be payable to holders of record as they appear
in the stock records of the Partnership at the close of business on the
applicable record date, which shall be the first day of the calendar month
in
which the applicable Distribution Payment Date falls or on such other date
designated by the Partnership as the record date for the payment of
distributions on the Series A Preferred Partnership Units that is not more
than
30 nor less than 10 days prior to such Distribution Payment Date (each, a
“Distribution Record Date”).
b.
No
distributions on Series A Preferred Partnership Units shall be declared by
the
Partnership or paid or set apart for payment by the Partnership at such time
as
the terms and provisions of any agreement of the Partnership, including any
agreement relating to its indebtedness, (i) prohibits such declaration, payment
or setting apart for payment of distributions or (ii) provides that such
declaration, payment or setting apart for payment of distributions would
constitute a breach thereof or a default thereunder, or if such declaration
or
payment shall be restricted or prohibited by law.
c.
Notwithstanding
the foregoing, distributions on the Series A Preferred Partnership Units shall
accrue whether or not the terms and provisions set forth in Section 3(b) hereof
at any time prohibit the current payment of distributions, whether or not the
Partnership has earnings, whether or not there are funds legally available
for
the payment of such distributions and whether or not such distributions are
declared.
d.
Accrued
but unpaid distributions on the Series A Preferred Partnership Units will
accumulate as of the Distribution Payment Date on which they first become
payable. Except as provided in Section 3(e) below, no distributions will be
declared or paid or set apart for payment, and no distribution will be made
on
any Common Units or any other series of Preferred Partnership Units ranking,
as
to distributions, on a parity with or junior to the Series A Preferred
Partnership Units other than a distribution that consists of the Partnership’s
Common Units or units of any other class of Partnership Units ranking junior
to
the Series A Preferred Partnership Units as to distributions and upon
liquidation, for any period unless full cumulative distributions on the Series
A
Preferred Partnership Units have been or contemporaneously are declared and
paid, or declared and a sum sufficient for the payment thereof is set apart
for
such payment on the Series A Preferred Partnership Units for all distribution
periods ending on or prior to the date of such action with respect to our Common
Units or any other series of Partnership Units ranking, as to distributions,
on
a parity with or junior to the Series A Preferred Partnership Units.
e.
When
distributions are not paid in full (or a sum sufficient for such full payment
is
not so set apart) upon the Series A Preferred Partnership Units and the units
of
any other series of Partnership Units ranking on a parity as to distributions
with the Series A Partnership Units, all distributions declared upon the Series
A Preferred Partnership Units and any other series of Partnership Units ranking
on a parity as to distributions with the Series A Preferred Partnership Units
shall be declared pro rata so that the amount of distributions declared per
unit
of Series A Preferred Partnership Units and such other series of Partnership
Units shall in all cases bear to each other the same ratio that accrued
distributions per unit on the Series A Preferred Partnership Units and such
other series of Preferred Partnership Units (which shall not include any accrual
in respect of unpaid distributions for prior distribution periods if such
Partnership Units do not have a cumulative distribution) bear to each other.
No
interest, or sum of money in lieu of interest, shall be payable in respect
of
any distribution payment or payments on Series A Preferred Partnership Units
which may be in arrears.
f.
Except
as
provided in the immediately preceding paragraph, unless full cumulative
distributions on the Series A Preferred Partnership Units have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the
payment thereof is set apart for payment for all past distribution periods,
no
distributions (other than distributions paid in Common Units or other
Partnership Units ranking junior to the Series A Preferred Partnership Units
as
to distributions and upon liquidation) shall be declared or paid or set aside
for payment, nor shall any other distribution be declared or made, upon the
Common Units or any other Partnership Units ranking junior to or on a parity
with the Series A Preferred Partnership Units as to distributions or upon
liquidation, nor shall any Common Units, or any other Partnership Units ranking
junior to or on a parity with the Series A Preferred Partnership Units as to
distributions or upon liquidation be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any such units) by the Partnership (except by
conversion into or exchange for other units of the Partnership ranking junior
to
the Series A Preferred Partnership Units as to distributions and upon
liquidation).
g.
Holders
of the Series A Preferred Partnership Units shall not be entitled to any
distribution, whether payable in cash, property or units in excess of full
cumulative distributions on the Series A Preferred Partnership Units as provided
above. Any distribution payment made on Series A Preferred Partnership Units
shall first be credited against the earliest accrued but unpaid distribution
due
with respect to such units which remains payable.
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4.
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Liquidation
Preference
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a.
Upon
any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Partnership, the holders of Series A Preferred Partnership Units then
outstanding are entitled to be paid out of the assets of the Partnership legally
available for distribution to its partners a liquidation preference of $25.00
per share, plus an amount equal to any accrued and unpaid distributions to
the
date of payment, before any distribution of assets is made to holders of Common
Units or any other class or series of Partnership Units that ranks junior to
the
Series A Preferred Partnership Units as to liquidation rights. After payment
of
the full amount of the liquidating distributions to which they are entitled,
the
holders of Series A Preferred Partnership Units will have no right or claim
to
any of the remaining assets of the Partnership.
b.
In
the
event that, upon any such voluntary or involuntary liquidation, dissolution
or
winding up, the available assets of the Partnership are insufficient to pay
the
amount of the liquidating distributions on all outstanding Series A Preferred
Partnership Units and the corresponding amounts payable on all Partnership
Units
of other classes or series of Partnership Units ranking on a parity with the
Series A Preferred Partnership Units in the distribution of assets, then the
holders of the Series A Preferred Partnership Units and all other such classes
or series of Partnership Units shall share ratably in any such distribution
of
assets in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
c.
Written
notice of any such liquidation, dissolution or winding up of the Partnership,
stating the payment date or dates when, and the place or places where, the
amounts distributable in such circumstances shall be payable, shall be given
by
first class mail, postage pre-paid, not less than 30 nor more than 60 days
prior
to the payment date stated therein, to each record holder of the Series A
Preferred Partnership Units at the respective addresses of such holders as
the
same shall appear in the books and records of the Partnership.
d.
The
consolidation, combination or merger of the Partnership with or into any other
corporation, partnership or entity or consolidation or merger of any other
corporation with or into the Partnership, or the sale, lease or conveyance
of
all or substantially all of the Partnership’s assets, property or business or
any statutory share exchange, shall not be deemed to constitute a liquidation,
dissolution or winding up of the Partnership.
a.
Right
of Optional Redemption
.
Except
as expressly provided herein, the Series A Preferred Partnership Units are
not
redeemable prior to August 5, 2010. On and after August 5, 2010, the
Partnership, at its option and upon not less than 30 nor more than 60 days’
written notice, may redeem the Series A Preferred Partnership Units, in whole
or
in part, at any time or from time to time, for cash at a redemption price of
$25.00 per share, plus an amount equal to all accrued and unpaid distributions
thereon to the date fixed for redemption (except as provided in Section 5(c)
below), without interest. If less than all of the outstanding Series A Preferred
Partnership Units are to be redeemed, the Series A Preferred Partnership Units
to be redeemed shall be selected pro rata (as nearly as may be practicable
without creating fractional units) or by any other equitable method determined
by the Partnership.
b.
Limitations
on Redemption
.
Unless
full cumulative distributions on all Series A Preferred Partnership Units shall
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for all past
distribution periods, no Series A Preferred Partnership Units shall be redeemed
unless all outstanding Series A Preferred Partnership Units are simultaneously
redeemed, and the Partnership shall not purchase or otherwise acquire directly
or indirectly any Series A Preferred Partnership Units (except by exchange
for
Partnership Units ranking junior to the Series A Preferred Partnership Units
as
to distributions and upon liquidation); provided, however, that the foregoing
shall not prevent the purchase or acquisition of Series A Preferred Partnership
Units pursuant to a purchase or exchange offer made on the same terms to holders
of all outstanding Series A Preferred Partnership Units.
c.
Payment
of Distributions in Connection with Redemption
.
Immediately prior to any redemption of Series A Preferred Partnership Units,
the
Partnership shall pay, in cash, any accumulated and unpaid distributions through
the redemption date, unless a redemption date falls after a Distribution Record
Date and prior to the corresponding Distribution Payment Date, in which case
each holder of Series A Preferred Partnership Units at the close of business
on
such Distribution Record Date shall be entitled to the distribution payable
on
such units on the corresponding Distribution Payment Date notwithstanding the
redemption of such units before such Distribution Payment Date. Except as
provided above, the Partnership will make no payment or allowance for unpaid
distributions, whether or not in arrears, on Series A Preferred Partnership
Units which are redeemed.
d.
Other
Redemptions
.
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 cause the Partnership
to
concurrently redeem an equal number of Series A Preferred Partnership Units,
at
a redemption price per Series A Preferred Partnership Unit payable in cash
and
equal to the same price per share paid by the General Partner to redeem the
Series A Preferred Shares (i.e., a redemption price of $25.00 per Series A
Preferred Share, plus any accrued and unpaid dividends thereon). No interest
shall accrue for the benefit of the Series A Preferred Partnership Units to
be
redeemed on any cash set aside by the Partnership.
e.
Status
of Redeemed Units
.
Any
Series A Preferred Partnership Units that shall at any time have been redeemed
shall, after such redemption, have the status of authorized but unissued
Preferred Partnership Units, without designation as to series until such units
are thereafter designated as part of a particular series by the Board of
Partnershipees.
6.
Voting
Rights
.
Except
as provided by law, the General Partner, in its capacity as the holder of the
Series A Preferred Partnership Units, shall not be entitled to vote for any
purpose or otherwise participate in any action taken by the Partnership or
the
Partners.
7.
Conversion
.
The
Series A Preferred Partnership Units are not convertible into or exchangeable
for any other property or units of the Partnership.
a.
Sections
5.01(a) and (b) of the Partnership Agreement are hereby deleted and replaced
by
sections (a) and (b), below.
Except
as
otherwise provided herein, Net Profit for any fiscal year or other applicable
period shall be allocated in the following order and priority:
(i)
first,
to
the General Partner in respect of its Series A Preferred Partnership Units
to
the extent that Net Loss previously allocated to such holders pursuant to
Section 5.01(b)(iii) below for all prior fiscal years or other applicable
periods exceeds Net Profit previously allocated to such Partners pursuant to
this Section 5.01(a)(i) for all prior fiscal years or other applicable
periods,
(ii)
second,
to the General Partner and the Limited Partners holding Common Units in
proportion to their respective Percentage Interests to the extent that Net
Loss
previously allocated to such holders pursuant to Section 5.01(b)(ii) below
for
all prior fiscal years or other applicable periods exceeds Net Profit previously
allocated to such Partners pursuant to this Section 5.01(a)(ii) for all prior
fiscal years or other applicable periods,
(iii)
third,
to
the General Partner in respect of its Series A Preferred Partnership Units
until
it has been allocated Net Profit equal to the excess of (x) the cumulative
amount of distributions the General Partner has received for all fiscal years
or
other applicable period or to the date of redemption, to the extent such Series
A Preferred Units are redeemed during such period, over (y) the cumulative
Net
Profit allocated to the General Partner, pursuant to this Section 5.01(a)(iii)
for all prior fiscal years or other applicable periods, and
(iv)
thereafter,
to the Partners holding Common Units in accordance with their respective
Percentage Interests.
(b)
Net
Loss
.
Except
as
otherwise provided herein, Net Loss for any fiscal year or other applicable
period shall be allocated in the following order and priority:
(i)
first,
to
the Partners holding Common Units in accordance with their respective Percentage
Interests to the extent of Net Profit previously allocated to such Partners
pursuant to Section 5.01(a)(iv) above for all prior fiscal years or other
applicable period exceeds Net Loss previously allocated to such Partners
pursuant to this Section 5.01(b)(i) for all prior fiscal years or other
applicable periods,
(ii)
second,
to the General Partner and the Limited Partners holding Common Units in
proportion to their respective Percentage Interests until the adjusted Capital
Account (including for this purpose any amounts a Partner is obligated to
contribute to the capital of the Partnership or is deemed obligated to
contribute pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2)) of each
Partner with respect to such Common Units is reduced to zero, and
(iii)
thereafter,
to the General Partner in respect of its Series A Preferred Partnership Units,
until the adjusted Capital Account (modified in the same manner as in clause
(ii)) of the General Partner with respect to such Series A Preferred Partnership
Units is reduced to zero.
It
is the
intention of the parties hereunder that the aggregate Capital Account balance
of
the General Partner in respect of its Series A Preferred Units at any date
shall
not exceed the amount of the original Capital Contribution of such holder plus
all accrued and unpaid distributions thereon, whether or not declared, to the
extent not previously distributed.
b.
Notwithstanding
anything to the contrary contained herein, in connection with the liquidation
of
the Partnership or the interest of a holder of Series A Preferred Partnership
Units, and prior to making any other allocations of Net Profit or Net Loss,
items of income and gain or deduction and loss shall first be allocated to
the
General Partner in respect of its Series A Preferred Partnership Units in such
amounts as is required to cause the General Partner's adjusted Capital Account
Balance (taking into account any amounts such Partner is obligated to contribute
to the capital of the Partnership or is deemed obligated to contribute pursuant
to Regulations Section 1.704-1(b)(2)(ii)(c)(2)) to equal the amount such Partner
is entitled to receive pursuant to the provisions of Sections 4 and 5
hereof.
c.
For
purposes of this Section 8, "Net Profit" means the excess of the Partnership's
Profit over the Partnership's Loss for any fiscal year or portion thereof,
and
"Net Loss" means the excess of the Partnership's Loss over the Partnership's
Profit for any fiscal year or portion thereof.