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EXHIBIT 10.3
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
POST APARTMENT HOMES, L.P.
This Second Amendment to First Amended and Restated Agreement of
Limited Partnership of Post Apartment Homes, L.P. (this "Amendment") is entered
into as of December 23, 1997, by and among Post GP Holdings, 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
Second Amended and Restated Agreement of Limited Partnership of Post Apartment
Homes, L.P., dated October 24, 1997, as amended by the First Amendment to Second
Amended and Restated Agreement of Limited Partnership of Post Apartment Homes,
L.P., dated as of October 28, 1997 (the "Partnership Agreement").
WHEREAS, certain Limited Partners of Post Apartment Homes, L.P. (the
"Partnership") have requested an amendment to the Partnership Agreement as
provided herein, and such amendment has been approved by the requisite number of
Limited Partners as set forth in the Partnership Agreement;
WHEREAS, the parties hereto accordingly desire to amend the Partnership
Agreement in accordance with the approved amendment;
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. Amendment to Partnership Agreement - Election to
Restore Deficit Capital Account.
The Partnership Agreement is hereby amended by adding the following new
Sections 13.3.D, 13.3.E, 13.3.F and 13.3.G immediately following the existing
Section 13.3.C:
D. Any Partner (other than a Principal or a
Principal-Controlled Partnership, whose rights and obligations shall be
as set forth above) may elect at any time to undertake deficit Capital
Account restoration liability under Section 13.3.E (or increase the
amount of such deficit Capital Account restoration liability previously
undertaken) by delivering written notice of such election to the
General Partner. Any such notice of election shall include a statement
of the maximum dollar amount of such Partner's deficit Capital Account
restoration obligation (the "Stipulated Liability Cap") or a statement
that such obligation shall be unlimited in amount. Such election,
including the Stipulated Liability Cap, shall
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be subject to the written approval of the General Partner. At such time
as the General Partner gives such written approval, such electing
Partner shall be deemed an "Electing Partner" for purposes of this
Section 13.3. The General Partner may prescribe such form or forms (if
any) for an election under this Section 13.3.D as the General Partner
deems appropriate.
E. Subject to Section 13.3.F, if an Electing Partner (as
hereinafter defined), on the date of the "liquidation" of his interest
in the Partnership (within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g)), has a negative balance in his Capital Account,
then such Electing Partner shall contribute in cash to the capital of
the Partnership the lesser of (i) the amount required to increase his
Capital Account as of such date to zero or (ii) such Electing Partner's
Stipulated Liability Cap (as defined above). Any such contribution
required of an Electing Partner hereunder shall be made on or before
the later of (x) the end of the Partnership Year in which the interest
of such Electing Partner is liquidated; or (y) the ninetieth (90th) day
following the date of such liquidation. Notwithstanding any provision
hereof to the contrary, all amounts so contributed by an Electing
Partner to the capital of the Partnership shall, upon the liquidation
of the Partnership under this Article 13, be first paid to any then
creditors of the Partnership, and any remaining amount shall be
distributed to the other Partners, if any, then having positive
balances in their respective Capital Accounts in proportion to such
positive balances.
F. After the death of a Control Person (as hereinafter
defined), the executor of the estate of such Control Person, on behalf
of an Electing Partner, may elect to reduce (or eliminate) the deficit
Capital Account restoration obligation of such Electing Partner
pursuant to Section 13.3.E. Such election may be made by such executor
by delivering to the General Partner within two hundred seventy (270)
days of the death of such Control Person a written notice, on behalf of
such Electing Partner, setting forth the maximum deficit balance in
such Electing Partner's Capital Account that such Electing Partner
agrees to restore under Section 13.3.E, if any. If such executor does
not make a timely election pursuant to this Section 13.3.F (whether or
not the balance in the Electing Partner's Capital Account is negative
at such time), then such Electing Partner (and the beneficiaries of any
Control Person who receive distribution of Partnership Units therefrom)
shall be deemed to have a deficit Capital Account restoration
obligation as set forth pursuant to the terms of Section 13.3.E. For
purposes of this Section 13.3.F, "Control Person" means, with respect
to any Electing Partner, (i) such Electing Partner, if such Electing
Partner is an individual, and (ii) if such Electing Partner is not an
individual, an individual who owns, directly or indirectly, a majority
of (A) the power of the voting equity securities of such Electing
Partner or (B) the outstanding equity interests of such Electing
Partner.
Section 2. Amendment to Partnership Agreement - Allocation of
Net Losses
Section 6.1.B of the Partnership Agreement is hereby deleted in its
entirety and the following new Section 6.1.B is inserted in its place:
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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:
(1) To the Partners who hold Common Partnership Units in
accordance with their respective Percentage Interests held
with respect to 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 shall be determined (i) in the case of
the Post Partners, without regard to the amount credited to
the Post Partners' respective Capital Accounts for the
aggregate Liquidation Preference Amount attributable to
Preferred Partnership Units and without regard to any deemed
deficit restoration obligation of the General Partner
recognized under Regulations Section 1.704-1(b)(2)(ii)(c)(2),
and (ii) in the case of an Electing Partner, Principal or a
Principal-Controlled Partnership, without regard to such
Partner's deficit Capital Account restoration obligation under
Section 13.3 hereof. The Net Loss allocated under this Section
6.1.B.(2) shall be allocated among the Limited Partners who
may receive such allocation in proportion to their respective
Percentage Interests in Common Partnership Units, but for any
particular Limited Partner not in excess of the maximum amount
of Net Loss that could be allocated to such Partner without
causing such Partner to have an Adjusted Capital Account
Deficit.
(3) Any remaining Net Loss that cannot be allocated under
Sections 6.1.B.(1) and (2) hereof shall be allocated to the
Post Partners in proportion to their respective Percentage
Interests with respect to Preferred Partnership Units, to the
extent that such allocation of Net Loss would not cause or
increase an Adjusted Capital Account Deficit of the Post
Partners determined, in the case of the General Partner,
without regard to any deemed deficit restoration obligation of
the General Partner recognized under Regulations Section
1.704-1(b)(2)(ii)(c)(2).
(4) Any remaining Net Loss shall be allocated to the
Electing Partners, Principals and the Principal-Controlled
Partnerships who may receive such allocation without causing
an Adjusted Capital Account Deficit as to such Partner, in
proportion to their respective Percentage Interests in Common
Partnership Units; provided that if, after the death of a
Control Person (as defined in Section 13.3.F hereof) or
Principal, an election is made on behalf of the applicable
Electing Partner, Principal or Principal-Controlled
Partnership under Section 13.3 hereof to eliminate or reduce
its deficit Capital Account restoration obligation under
Section 13.3 hereof, Net Losses shall not be allocated to such
Partner to the extent that such allocation would cause such
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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 Electing Partners, Principals and
Principal-Controlled Partnerships as to whom the foregoing
limitation does not apply, in proportion to their respective
Percentage Interests in Common Partnership Units.
(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 Gains3 shall be allocated
among the Partners in accordance with their respective Percentage
Interests in Common Partnership Units.
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 WITNESS WHEREOF, the parties hereto have executed the Amendment
under seal as of the date first written above.
GENERAL PARTNER:
POST GP HOLDINGS, INC.,
a Georgia corporation
By: /s/ John A. Williams
------------------------------------
Name: John A. Williams
-------------------------------
Title: Chairman and Chief
Executive Officer
------------------------------
Attest: /s/ Sherry W. Cohen
--------------------------------
Name: Sherry W. Cohen
--------------------------
Title: Vice President and
Secretary
-------------------------
[CORPORATE SEAL]
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LIMITED PARTNERS:
POST GP HOLDINGS, INC., a
Georgia corporation, as
attorney-in-fact for the
Limited Partners (other
than Post LP Holdings,
Inc.)
By: /s/ John A. Williams
-----------------------------------
Name: John A. Williams
------------------------------
Title: Chairman and Chief
Executive Officer
-----------------------------
Attest: /s/ Sherry W. Cohen
-------------------------------
Name: Sherry W. Cohen
-------------------------
Title: Vice President and
Secretary
------------------------
POST LP HOLDINGS, INC.,
a Georgia corporation
By: /s/ John A. Williams
-----------------------------------
Name: John A. Williams
------------------------------
Title: Chairman and Chief
Executive Officer
-----------------------------
Attest: /s/ Sherry W. Cohen
------------------------------
Name: Sherry W. Cohen
--------------------------
Title: Vice President and
Secretary
-------------------------
[CORPORATE SEAL]
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