Exhibit 10.8
EIGHTH AMENDMENT
TO
AMENDED AND RESTATED PARTNERSHIP
AGREEMENT
THIS EIGHTH AMENDMENT (the “Eighth Amendment”),
dated as of January 15, 2007, to the Amended and Restated
Partnership Agreement, dated as of March 22, 1999, as amended by
the First Amendment dated as of November 15, 1999, the Second
Amendment dated as of November 18, 1999, the Third Amendment dated
as of May 1, 2003, the Fourth Amendment dated as of January 27,
2004, the Fifth Amendment dated as of February 15, 2005, the Sixth
Amendment dated as of August 8, 2005, and the Seventh Amendment
dated as of December 12, 2006 (collectively, the
“Agreement”), of ACADIA REALTY LIMITED PARTNERSHIP, a
Delaware limited partnership (the “Partnership”).
Capitalized terms used herein but not defined herein shall have the
meanings given such terms in the Agreement.
BACKGROUND
The
General Partner desires to establish and set forth the terms of a
new class of Partnership Interests designated as LTIP Units, and
the LTIP Units shall have the terms set forth in Annex C to this
Eighth Amendment to the Agreement.
Section
3.2(B) of the Agreement authorizes the General Partner to cause the
Partnership to issue additional interests in the Partnership to
existing or newly-admitted Partners in exchange for the
contribution by a Partner of additional Capital Contributions to
the Partnership. Such additional Partnership Interests may be
issued in one or more classes, or one or more series of any of such
classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties,
which may be senior, pari passu or junior to OP Units, all as shall
be determined by the General Partner in its sole and absolute
discretion.
Section
16(B) of the Agreement provides that the General Partner has the
power, without the consent of the Limited Partners of the
Partnership, to amend the Agreement as may be required to
facilitate or implement the admission of Partners in accordance
with the Agreement and to set forth the designations, rights,
powers, duties, and preferences of the holders of any additional
Partnership Interests issued pursuant to Section 3.2.
The
General Partner has made the determination pursuant to Section
16(B) of the Agreement that consent of the Limited Partners of the
Partnership is not required with respect to the matters set forth
in this Eighth Amendment to the Agreement.
NOW,
THEREFORE , the parties
hereto, for good and sufficient consideration and intending to be
legally bound, hereby amend the Agreement as follows:
1.
Section 2 of the Agreement is amended by inserting the following
definitions in alphabetical order:
|
|
|
|
|
“ 2006 LTIP Plan
” has the meaning set forth in Section 3.B of Annex C to the
Eighth Amendment to this Agreement.
|
|
|
|
|
|
“ Constituent Person
” has the meaning set forth in Section 7.G of Annex C to the
Eighth Amendment to this Agreement.
|
|
|
|
|
|
“ Economic Capital
Account Balance ” has the meaning set forth in Section
7.3(K).
|
|
|
|
|
|
“ Interim Distribution
Amount ” means, with respect to an LTIP Unit, an amount
equal to the distributions that would have been distributed to the
holder of such LTIP Unit hereunder prior to the LTIP Unit
Distribution Participation Date, had the LTIP Unit Distribution
Participation Date been the date such Unit was granted.
|
|
|
|
|
|
“ Liquidating Gains
” has the meaning set forth in Section 7.3(K).
|
|
|
|
|
|
“ Liquidating Losses
” has the meaning set forth in Section 7.3(K).
|
|
|
|
|
|
“ LTIP Unit Adjustment
Events ” has the meaning set forth in Section 5 of Annex
C to the Eighth Amendment to this Agreement.
|
|
|
|
|
|
“ LTIP Unit Capital
Account Limitation ” has the meaning set forth in Section
7.B of Annex C to the Eighth Amendment to this
Agreement.
|
|
|
|
|
|
“ LTIP Unit Conversion
Date ” has the meaning set forth in Section 7.C of Annex
C to the Eighth Amendment to this Agreement.
|
|
|
|
|
|
“ LTIP Unit Conversion
Notice ” has the meaning set forth in Section 7.C of
Annex C to the Eighth Amendment to this Agreement.
|
|
|
|
|
|
“ LTIP Unit Conversion
Right ” has the meaning set forth in Section 7.A of Annex
C to the Eighth Amendment to this Agreement.
|
|
|
|
|
|
“ LTIP Unit Distribution
Participation Date ” has the meaning set forth in Section
3.B of Annex C to the Eighth Amendment to this
Agreement.
|
|
|
|
|
|
“ LTIP Unit Distribution
Payment Date ” has the meaning set forth in Section 3.A
of Annex C to the Eighth Amendment to this Agreement.
|
|
|
|
|
|
“ LTIP Unit Forced
Conversion ” has the meaning set forth in Section 7.D of
Annex C to the Eighth Amendment to this Agreement.
|
|
|
|
|
|
“ LTIP Unit Forced
Conversion Notice ” has the meaning set forth in Section
7.D of Annex C to the Eighth Amendment to this
Agreement.
|
- 2 -
|
|
|
|
|
“ LTIP Unit Limited
Partner ” means any Person holding LTIP Units, and named
as a LTIP Unit Limited Partner in Annex A attached hereto, as such
Annex may be amended from time to time.
|
|
|
|
|
|
“ LTIP Units ”
means the Partnership Interests designated as such having the
rights, powers, privileges, restrictions, qualifications and
limitations set forth in Annex C to the Eighth Amendment to this
Agreement.
|
|
|
|
|
|
“ OP Unit Economic
Balance ” has the meaning set forth in Section
7.3(K).
|
|
|
|
|
|
“ Partnership Record
Date ” means the record date established by the General
Partner for the distribution of cash pursuant to Sections 8.1 and
8.2 hereof, which record date shall be the same as the record date
established by the General Partner for the payment of dividends to
holders of Common Shares of the General Partner on account of some
or all of the General Partner’s share of such distribution by
the Partnership.
|
|
|
|
|
|
“ Transaction
” has the meaning set forth in Section 7.G of Annex C to the
Eighth Amendment to this Agreement.
|
|
|
|
|
|
“ Unvested LTIP
Units ” has the meaning set forth in Section 2.A of Annex
C to the Eighth Amendment to this Agreement.
|
|
|
|
|
|
“ Vested LTIP Units
” has the meaning set forth in Section 2.A of Annex C to the
Eighth Amendment to this Agreement.
|
|
|
|
|
|
“ Vesting Agreement
” has the meaning set forth in Section 2.A of Annex C to the
Eighth Amendment to this Agreement.
|
2.
The following definitions contained in Section 2 of the Agreement
are amended as follows:
(a)
Section (ii) of the definition of “Gross Asset Value”
is hereby amended and restated in its entirety as
follows:
|
|
|
|
|
(ii)
the Gross Asset Value of all Partnership assets shall be adjusted
to equal their respective gross fair market values, as determined
by the General Partner, as of the following times: (a) the
acquisition of an additional interest in the Partnership by any new
or existing Partner in exchange for more than a de minimis
Capital Contribution; (b) the acquisition of a more than de
minimis additional interest in the Partnership by any new or
existing Partner as consideration for the provision of services to
or for the benefit of the Partnership in a partner capacity or in
anticipation of becoming a partner; (c) any issuance of LTIP Units
by the Partnership; (d) the distribution by the Partnership to a
Partner of more than a de minimis amount of Partnership
property as consideration for an interest in the Partnership; and
(e) the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g); provided,
|
- 3 -
|
|
|
|
|
however, that adjustments
pursuant to clauses (a), (b), (c) and (d) above shall be made only
if the General Partner reasonably determines that such adjustments
are necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership.
|
(b)
The definition of “Limited Partner” is hereby amended
and restated in its entirety:
|
|
|
|
|
“
Limited Partner ” shall mean the Persons listed as
limited partners on Annex A or any Person (i) who becomes a Limited
Partner pursuant to the terms and conditions of this Agreement, and
(ii) who holds a Partnership Interest. “Limited
Partners” means all such Persons and shall include, without
limitation, holders of OP Units, holders of Preferred Units, and
LTIP Unit Limited Partners.
|
(c)
The definition of the term “Percentage Interest” is
hereby amended by adding the following sentence at the end
thereof:
|
|
|
|
|
For purposes of calculations of
Percentage Interests at any time, the Percentage Interest of any
LTIP Unit Limited Partner and the total number of Partnership
Interests shall exclude any LTIP Units for which the LTIP Unit
Distribution Participation Date has not occurred as of such
time.
|
3.
Section 3.2 of the Agreement is hereby supplemented by adding the
following paragraph (F) to the end thereof:
|
|
|
|
|
F.
Issuance of LTIP Units . From and after the date hereof the
Partnership shall be authorized to issue LTIP Units. From time to
time the General Partner may issue LTIP Units to Persons providing
services to or for the benefit of the Partnership. LTIP Units are
intended to qualify as profits interests in the Partnership. LTIP
Units shall have the terms set forth in Annex C to the
Eighth Amendment to this Agreement.
|
4.
Section 3.8 of the Agreement is hereby supplemented by adding the
following paragraph at the end of Section 3.8:
|
|
|
|
|
Holders
of LTIP Units shall not be entitled to the rights of exchange or
redemption provided for in Section 3.8 of this Agreement, unless
and until such LTIP Units have been converted into OP Units (or any
other class or series of Partnership Interests entitled to such
rights of exchange or redemption). Notwithstanding the foregoing,
and except as otherwise permitted by the award, plan or other
agreement pursuant to which an LTIP Unit was issued, the rights of
exchange or redemption shall not be exercisable with respect to any
OP Unit issued upon conversion of an LTIP Unit until two years
after the date on which the LTIP Unit was issued, provided however,
that the foregoing restriction shall not apply if the right of
redemption is exercised by an LTIP Unit Limited Partner in
connection with a transaction that falls within the definition of a
“change of
|
- 4 -
|
|
|
|
|
control” under the
agreement or agreements pursuant to which the LTIP Units were
issued to such holder.
|
5.
Section 7.1 of the Agreement is hereby amended and restated in its
entirety as follows:
|
|
|
|
|
7.1
Profits . After giving effect to the special allocations set
forth in Sections 7.3 and 7.4 hereof (including, without
limitation, allocations to holders of Preferred Units pursuant to
Section 7.3(H) and special allocations to holders of LTIP Units
pursuant to Section 7.3(I)), Profits for any fiscal year shall be
allocated among the Partners in proportion to their respective
Percentage Interests. For purposes of determining allocations of
Profits pursuant to this Section 7.1, to the extent that the LTIP
Unit Distribution Participation Date with respect to an LTIP Unit
has occurred, such LTIP Unit shall be treated as an OP
Unit.
|
6.
Section 7.2(A) of the Agreement is hereby amended and restated in
its entirety as follows:
|
|
|
|
|
A.
After giving effect to the special allocations set forth in
Sections 7.3 and 7.4 hereof, Losses for any fiscal year shall be
allocated among the Partners in proportion to their respective
Percentage Interests. For purposes of determining allocations of
Losses pursuant to this Section 7.2(A), to the extent that the LTIP
Unit Distribution Participation Date with respect to an LTIP Unit
has occurred, such LTIP Unit shall be treated as an OP
Unit.
|
7.
Section 7.3 is hereby supplemented by adding the following
paragraph (I) to the end thereof:
|
|
|
|
|
(I)
Special Interim Allocations . All or a portion of the
Profits for a taxable year, if any, shall be specially allocated to
the holders of LTIP Units, with respect to which the LTIP Unit
Distribution Participation Date has occurred, in proportion to and
to the extent of the aggregate distributions with respect to an
LTIP Unit made with respect to a taxable period pursuant to Section
8.6 hereof.
|
8.
Section 7.3 is hereby supplemented by appending the following new
paragraph (J):
|
|
|
|
|
J.
Forfeiture Allocations . Upon a forfeiture of any unvested
Partnership Interest by any Partner, gross items of income, gain,
loss or deduction shall be allocated to such Partner if and to the
extent required by final Regulations promulgated after the
effective date of the Eighth Amendment to this Agreement to ensure
that allocations made with respect to all unvested Partnership
Interests are recognized under Code Section 704(b).
|
9.
Section 7.3 is hereby supplemented by adding the following
paragraph (K) to the end thereof:
- 5 -
|
|
|
|
|
K.
Special Allocations With Respect to LTIP Units . After
giving effect to the special allocations set forth in Sections
7.3(A) through 7.3(J) hereof, and notwithstanding the provisions of
Sections 7.1 and 7.2 above, but subject to the prior allocation of
Profits under Section 7.1 above, any Liquidating Gains shall first
be allocated to the holders of LTIP Units until the Economic
Capital Account Balances of such holders, to the extent
attributable to their ownership of LTIP Units, are equal to
(i) the OP Unit Economic Balance, multiplied by (ii) the
number of their LTIP Units; provided that no such
Liquidating Gains will be allocated with respect to any particular
LTIP Unit unless, and such allocations, if any, shall be made only
to the extent that, such Liquidating Gains, when aggregated with
other Liquidating Gains realized by holders of LTIP Units since the
issuance of such LTIP Unit, exceed Liquidating Losses realized
since the issuance of such LTIP Unit. After giving effect to the
special allocations set forth in Sections 7.3(A) through 7.3(K)
hereof, and notwithstanding the provisions of Sections 7.1 and 7.2
above, in the event that, due to distributions with respect to OP
Units in which the LTIP Units do not participate or otherwise, the
Economic Capital Account Balance of any present or former holder of
LTIP Units, to the extent attributable to the holder’s
ownership of LTIP Units, exceeds the target balance specified
above, then Liquidating Losses shall be allocated to such holder to
the extent necessary to reduce or eliminate the disparity. For this
purpose, “ Liquidating Gains ” means any net
gain realized in connection with the actual or hypothetical sale of
all or substantially all of the assets of the Partnership
(including upon the occurrence of any event of liquidation of the
Partnership), including but not limited to net gain realized in
connection with an adjustment to the Gross Asset Value of
Partnership assets under the definition of Gross Asset Value in
Section 2 of this Agreement. Similarly, “ Liquidating
Losses ” means any net loss realized in connection with
any such event. The “ Economic Capital Account
Balances ” of the holders of LTIP Units will be equal to
their Capital Account balances, plus the amount of their shares of
any Partner Nonrecourse Debt Minimum Gain or Partnership Minimum
Gain, in either case to the extent attributable to their ownership
of LTIP Units. Similarly, the “ OP Unit Economic
Balance ” shall mean (i) the Capital Account balance of
the General Partner, plus the amount of the General Partner’s
share of any Partner Nonrecourse Debt Minimum Gain or Partnership
Minimum Gain, in either case to the extent attributable to the
General Partner’s ownership of OP Units and computed on a
hypothetical basis after taking into account all allocations
through the date on which any allocation is made under this Section
7.3(K), divided by (ii) the number of the General Partner’s
OP Units. Any such allocations shall be made among the holders of
LTIP Units in proportion to the amounts required to be allocated to
each under this Section 7.3(K). The parties agree that the intent
of this Section 7.3(K) is to make the Capital Account balance
associated with each LTIP Unit economically equivalent to the
Capital Account balance associated with the General Partner’s
OP Units (on a per-unit basis), but only if the Partnership has
sufficient cumulative net Liquidating Gains with respect to its
assets since the issuance of the relevant LTIP Unit. The General
Partner may
|
- 6 -
|
|
|
|
|
make additional or corrective
allocations to the extent necessary to achieve this
intent.
|
10.
Section 7.4 of the Agreement is hereby amended and restated in its
entirety as follows:
|
|
|
|
|
7.4
Curative Allocations . The allocations set forth in Sections
7.2(B), 7.3(A), 7.3(B), 7.3(C), 7.3 (D), 7.3(E), 7.3(F) and 7.3(G)
hereof (the “Regulatory Allocations”) are intended to
comply with certain requirements of the Regulations under Section
704(b) of the Code. It is the intent of the Partners that, to the
extent possible, all Regulatory Allocations shall be offset either
with other Regulatory Allocations or with special allocations of
other items of Partnership income, gain, loss, or deduction
pursuant to this Section 7.4. Therefore, notwithstanding any other
provision of this Section 7 (other than Regulatory Allocations and
Section 7.6), the General Partner shall make such offsetting
special allocations of Partnership income, gain, loss, or deduction
in whatever manner it determines appropriate so that, after such
offsetting allocations are made, each Partner’s Capital
Account balance is, to the extent possible, equal to the Capital
Account balance such Partner would have had if the Regulatory
Allocations were not part of the Agreement and all Partnership
items were allocated pursuant to Sections 7.1, 7.2(A), 7.3(H) and
7.3(I). In exercising this discretion under this Section 7.4, the
General Partner shall take into account future Regulatory
Allocations under Sections 7.3(A) and 7.3(B) that, although not yet
made, are likely to offset other Regulatory Allocations previously
made under Sections 7.3(E) and 7.3(F).
|
11.
The last sentence of Section 8.1 of the Agreement is hereby amended
and restated in its entirety as follows:
|
|
|
|
|
Subject to Section 8.6 below,
Operating Cash Flow shall be distributed to or for the benefit of
the Partners not less frequently than annually, and shall be
distributed (i) first, to holders of any class of Preferred Units
in accordance with their Percentage Interests in an amount equal to
all preferential distributions on such Preferred Units as set forth
in the Unit Certificate for such class and at the times set forth
therein, and (ii) thereafter, to the extent of the remaining
amount, to and among the other Partners in accordance with their
respective Percentage Interests; or
|
12.
The last sentence of Section 8.2 of the Agreement is hereby amended
and restated in its entirety as follows:
|
|
|
|
|
Subject to Sections 8.6 and 14.2
below, Capital Cash Flow shall be distributed to or for the benefit
of the Partners not less frequently than annually, and in any event
as provided in the Unit Certificate and shall be distributed first
to the holders of Preferred Units in the order of their preference
and next to the other Partners, in accordance with the respective
Percentage Interests of the Partners on the date of such
distribution.
|
- 7 -
13.
Section 8 of the Agreement is amended by appending the following
new Section 8.6:
|
|
|
|
|
8.6
Distributions to LTIP Unit Limited Partners . For purposes
of the foregoing calculations of Sections 8.1 and 8.2, issued and
outstanding LTIP Units with an associated LTIP Unit Distribution
Participation Date that falls on or before the Partnership Record
Date for a particular distribution shall be treated as outstanding
OP Units. LTIP Units for which the LTIP Unit Distribution
Participation Date has not occurred as of the Partnership Record
Date for a particular distribution shall not be entitled to any of
such distribution. Notwithstanding the provisions of Section 8, but
subject to distributions to holders of Preferred Units in
accordance with clause (i) in each of Sections 8.1 and 8.2, with
respect to an LTIP Unit, upon the LTIP Unit Distribution
Participation Date, Operating Cash Flow and Capital Cash Flow shall
be distributed to the holder of such LTIP Unit in an amount equal
to the Interim Distribution Amount; provided, however, the amount
distributed shall not exceed the amount of Profits for such taxable
period; and provided, further, that, to the extent the entire
amount of the Interim Distribution Amount cannot be made in a
taxable period, the remaining Interim Distribution Amount will be
carried forward to the next taxable period and distributed to the
extent of Profits in such following taxable period.
|
14.
Article 11 of the Agreement is amended by appending the following
new Section 11.7:
|
|
|
|
|
11.7
Safe Harbor Election . To the extent provided for in
Regulations, revenue rulings, revenue procedures and/or other IRS
guidance issued after the date hereof, the Partnership is hereby
authorized to, and at the direction of the General Partner shall,
elect a safe harbor under which the fair market value of any
Partnership Interests issued after the effective date of such
Regulations (or other guidance) will be treated as equal to the
liquidation value of such Partnership Interests (i.e., a value
equal to the total amount that would be distributed with respect to
such interests if the Partnership sold all of its assets for their
fair market value immediately after the issuance of such
Partnership Interests, satisfied its liabilities (excluding any
non-recourse liabilities to the extent the balance of such
liabilities exceed the fair market value of the assets that secure
them) and distributed the net proceeds to the Partners under the
terms of this Agreement). In the event that the Partnership makes a
safe harbor election as described in the preceding sentence, each
Partner hereby agrees to comply with all safe harbor requirements
with respect to transfers of such Partnership Interests
|
|
