exv10w6



 




EXHIBIT 10.6


FORM OF TAX, ASSET AND INCOME

SUPPORT AGREEMENT




     This TAX, ASSET AND INCOME SUPPORT AGREEMENT (this “Agreement”) is dated
as of    , by and among Camden Property Trust, a Texas real estate
investment trust (the “Company”), Camden Summit, Inc. (formerly known as Camden
Sparks, Inc.), a Delaware corporation and wholly-owned subsidiary of the
Company (the “General Partner”), Camden Summit Partnership, L.P., a Delaware
limited partnership (the “Partnership”) and each of the limited partners of the
Partnership who have executed a signature page hereto (each, a “Summit Limited
Partner” and collectively, the “Summit Limited Partners”).



     WHEREAS, as of the date hereof, Summit Properties Inc., a Maryland
corporation merged with and into the General Partner (the “Merger”), with the
General Partner as the surviving entity and the successor to the general
partner interest in the Partnership;



     WHEREAS, in connection with the Merger, the Second Amended and Restated
Agreement of Limited Partnership (the “Partnership Agreement”) of the
Partnership was approved by the Summit Limited Partners in accordance with
Section 14 of the Partnership Agreement, and became effective as of the date
hereof immediately subsequent to the effective time of the Merger;



     WHEREAS, as an inducement to their approval of the Partnership Agreement,
the Company and the General Partner have agreed to enter into this Agreement
with the Summit Limited Partners to provide certain protections with respect to
the economic rights of the Summit Limited Partners under the Partnership
Agreement.



     NOW THEREFORE, in consideration of the mutual agreements and covenants
herein contained, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the undersigned parties hereby
agree as follows:



     Section 1.
Defined Terms



     “Best Efforts” shall mean the execution of a Person’s best efforts within
the common law meaning of such phrase, and incorporating the requirement to use
financial resources to achieve the desired objective.



     “Closing Date” shall mean the date of this Agreement.



     “Common Unit” shall have the meaning ascribed thereto in the Partnership
Agreement.



     “Consideration” shall have the meaning ascribed thereto in the Partnership
Agreement.



     “FFO Ratio” shall mean the ratio of the funds from operations (determined
using the NAREIT definition) of the Partnership for the most recently completed
fiscal quarter to the aggregate quarterly Priority Distribution Amount on the
Common Units with respect to the most recent fiscal quarter.



 









 





     “Make Whole Amount” shall mean, with respect to any Protected Party and
any Disposition of all or any portion of any Protected Asset, the sum of: (1)
the product of the aggregate income or gain recognized by such Protected Party
in respect of such Disposition, multiplied by the federal, state and local
income tax rate to which such Protected Party is subject (assuming for these
purposes that the income recognized by such Protected Party with respect to
which the Make Whole Amount is calculated is the last income recognized by such
Protected Party for the pertinent taxable year); plus (2) the aggregate
federal, state and local income taxes payable by such Protected Party as a
result of the receipt of the Make Whole Payment (including, without limitation,
payments received pursuant to this clause (2) and computed using the tax rates
and assumptions above).



     “Person” shall mean an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group (as defined in Section 13(d) of the Exchange Act) and such Person’s
successors and assigns.



     “Priority Distribution Amount” shall have the meaning ascribed thereto in
the Partnership Agreement.



     “Protected Assets” shall mean those assets of the Partnership set forth on
Schedule A attached hereto, and any assets which become Protected Assets
pursuant to Section 2(b) hereof.



     “Protected Parties” shall mean each Summit Limited Partner, each direct or
indirect owner of a Summit Limited Partner that is required to include in its
taxable income any portion of the income or gains of the Partnership on a
current basis (a “Flow Through Owner”), and each person who acquires an
interest in the Partnership from a Summit Limited Partner or Flow Through Owner
in a transaction in which such person’s adjusted basis in such interest for
federal income tax purposes is determined in whole or in part by reference
either to such person’s basis in other property or the Summit Limited Partner’s
or Flow Through Owner’s basis in such interest, in each case other than the
Company or any affiliate of the Company.



     “Redeeming Partner” shall have the meaning ascribed thereto in the
Partnership Agreement.



     “REIT Shares Amount” shall have the meaning ascribed thereto in the
Partnership Agreement.



     “Subsidiary” shall mean, with respect to any Person, any corporation more
than 50% of whose outstanding voting securities, or any partnership, joint
venture or other entity more than 50% of whose total equity interest, is
directly or indirectly owned by such Person.



     “Value” shall have the meaning ascribed thereto in the Partnership Agreement.



     Section 2.
Tax Matters



          (a) Section 704(c) Allocations. Except as otherwise required by a change
in applicable law:




          (i) The Partnership and each entity in which the Partnership holds a
direct or indirect interest shall, with respect to each asset comprising
the Protected



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Assets, use the “traditional method” under Section 704(c) of the
Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury
regulations promulgated thereunder (the “Treasury Regulations”) with no
curative or remedial allocations under Section 704(c) of the Code.




          (ii) The Partnership shall cause any entity that is treated as a
partnership for federal income tax purposes to which any of the Protected
Assets is transferred in a transaction in which the transferee’s adjusted
basis in the Protected Assets is determined in whole or in part by
reference to the transferor’s basis in such Protected Asset (a) to use
the traditional method without curative allocations or remedial
allocations under Section 704(c) of the Code with respect to such
Protected Asset and (b) to agree, for the benefit of the Protected
Parties, to be bound by the provisions of this Section 2(a) and Section
2(f) hereof as though such entity were the Partnership.



          (b) Lock Out. Except as expressly permitted herein, neither the
Partnership nor any entity in which the Partnership holds a direct or indirect
interest shall, directly or indirectly, sell, transfer or otherwise dispose of
or permit the disposition of any of the Protected Assets or any direct or
indirect interest therein (a “Disposition”) prior to the 15th anniversary of
the Closing Date (the period from the Closing Date through such anniversary,
the “Protection Period”). Notwithstanding the foregoing, the Partnership shall
have the right, during the Protection Period: (i) to consummate a Disposition
of all or any portion of any Protected Asset in one or more transactions that
are taxable in whole or in part if, but only if, prior to or concurrently with
the closing of that Disposition, the Partnership delivers to each Protected
Party (as defined below) that recognizes gain under Sections 704(c) or 737 of
the Code, or analogous provisions of state or local tax law, in connection with
such Disposition, cash (any such payment, a “Make Whole Payment”) in an amount
equal to the Make Whole Amount in respect thereof; or (ii) to consummate any
Disposition of all or any part of the Protected Assets in a transaction with
respect to which no income or gain would be required to be recognized by the
Protected Parties pursuant to an applicable provision of the Code and any
applicable state or local tax law (a “Tax-Deferred Exchange”). The payment of
a Make Whole Payment to a Protected Party shall not be treated as a
distribution on the Units held by such party and shall not affect the
calculation of the distributions otherwise payable in respect of such Units.
In situations where the Partnership engages in a wholly or partially
Tax-Deferred Exchange involving a Protected Asset, the property (or as
applicable, the portion thereof) received in such exchange shall be treated as
a Protected Asset for all purposes under this Agreement.



          (c) Debt Allocations And Related Matters. The Partnership shall, at all
times during the Protection Period, maintain nonrecourse indebtedness that is
properly allocable to each Summit Limited Partner pursuant to Section 752 of
the Code and the Treasury Regulations thereunder in an amount at least equal to
the amount of income and gain that would be required to be recognized by such
Summit Limited Partner pursuant to Section 731(a)(1) of the Code (including by
reason of Section 752(b) of the Code) if no Partnership nonrecourse liabilities
were properly allocable to such Summit Limited Partner (the “Required
Nonrecourse Debt Amount”). Notwithstanding the foregoing, in the event of a
material adverse change in the Code or treasury regulations that materially
reduces the amount of nonrecourse indebtedness that can be properly allocated
to a Summit Limited Partner pursuant to Section 752 of the Code and the
treasury regulations thereunder, the parties will negotiate in good faith to
promptly amend this Agreement as necessary to preserve as best as possible the
intended benefits of this Section 2(c). For



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purposes of this Section 2(c), “Summit Limited Partner” shall include each
person who acquires an interest in the Partnership from a Summit Limited
Partner in a transaction in which such person’s adjusted basis in such interest
for federal income tax purposes is determined in whole or in part by reference
either to such person’s basis in other property or the Summit Limited Partner’s
basis in such interest, in each case other than the Company or any affiliate of
the Company



          (d) Periods after the Protection Period. At all times after the
Protection Period, the Partnership shall use its Best Efforts to (i) prevent
any income or gain from being recognized by the Partnership with respect to the
Tax Protected Assets that would be allocated to any Protected Party pursuant to
Sections 704(c) or 737 of the Code, or analogous provisions of state or local
tax law, and (ii) ensure that the amount of nonrecourse indebtedness of the
Partnership properly allocable to each Summit Limited Partner is at least equal
to the Required Nonrecourse Debt Amount.



          (e) Partnership Tax Status. Partnership shall not, without the written
consent of Summit Limited Partners owning at least 80% of the Common Units held
by Summit Limited Partners, elect to be treated as an association taxable as a
corporation for U.S. federal or any applicable state tax purposes, and the
General Partner and the Company shall take all actions, and refrain from taking
any actions, as necessary to prevent the Partnership from being treated as an
association taxable as a corporation for U.S. federal or any applicable state
income tax purposes.



          (f) Damages. If the Partnership breaches any obligation set forth in this
Section 2, then concurrently with the consummation of the transaction or the
occurrence of the event giving rise to such breach, the Partnership shall
immediately pay to each Protected Party an amount equal to the sum of: (i) the
product of the aggregate income or gain recognized by such Protected Party in
respect of such transaction or event, multiplied by the federal, state and
local income tax rate to which such Protected Party is subject (assuming for
these purposes, that the income recognized by such Protected Party as a result
of such breach is the last income recognized by such Protected Party for the
pertinent taxable year); plus (ii) the aggregate federal, state and local
income taxes payable by such Protected Party as a result of the receipt of the
payments required by this Section 2(f) (including this clause (ii) and computed
using the tax rates and assumptions above).



     Section 3.
Covenants



          (a) Distributions. If at any time, the Partnership has failed to
distribute cash to the Summit Limited Partners in accordance with Article 5 of
the Amended Partnership Agreement equal to the applicable Priority Distribution
Amount on a current basis (i.e., if a Cumulative Unpaid Priority Distribution
Amount is created) and any portion of such undistributed Priority Distribution
Amount (the “Accrued Amount”) remains outstanding and unpaid for twelve (12)
months, Commodore agrees to contribute cash as a capital contribution to the
Partnership within one (1) business day following such twelve-month anniversary
in an amount equal to the aggregate Accrued Amount plus the aggregate
Cumulative Unpaid Accrued Return Amount outstanding at such time. Such
contribution will be made as a contribution to capital of the Partnership and
the Company may receive additional Partnership Units therefor in accordance
with the Partnership Agreement. Immediately following the receipt of such



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contribution, the General Partner shall cause such cash to be distributed
to the Limited Partners in satisfaction of their aggregate outstanding
Cumulative Unpaid Accrued Return Amount and Accrued Amount.



          (b) Maintenance of FFO Ratio. At all times following the Closing Date,
the Company and the General Partner will cause the Partnership to maintain an
FFO Ratio of no less than 8 to 1.



          (c) Covenant Compliance Certification. Within ninety (90) days of the end
of each fiscal year, the Company will deliver to each of the Summit Limited
Partners a certificate executed by its Chief Financial Officer certifying that
Section 3(b) has been complied with and that no breaches have occurred since
the last such certification (or the date hereof for the first certification)
and that, to the best knowledge of such officers, no facts or circumstances
exist as of the date of such certification that would be reasonably expected to
cause a breach of such covenant.



          (d) Guarantee of Redemption Right. The Company hereby unconditionally
guarantees the obligation of the Partnership to pay the Consideration to a
Redeeming Partner pursuant to Section 8.6 of the Partnership Agreement.



     Section 4.
Notices. Except as otherwise specifically provided herein, all
notices, requests, claims, demands and other communications under this
Agreement will be in writing and will be deemed given upon delivery if
delivered personally or one Business Day after it is sent by overnight courier
(providing proof of delivery) to the Company, the General Partner or the
Partnership at the address of such party set forth below, and to the Limited
Partners at the address set forth on the signature pages hereto (or at such
other address for a party as specified by like notice):


if to Company, General Partner or the Partnership:


Camden Property Trust

3 Greenway Plaza, Suite 1300

Houston, TX 77046

Attention: Richard J. Campo

Facsimile: (713) 572-4440


with a copy to:


Locke Liddell & Sapp LLP

2200 Ross Avenue, Suite 2200

Dallas, TX 75201

Attention: Bryan L. Goolsby

Facsimile: (214) 740-8800


Any party may give any notice, request, demand, claim or other communication
hereunder using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail or electronic mail),
but no such notice, request, demand, claim or other




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communication shall be deemed to have been duly given unless and until it
actually is received by the party for whom it is intended. Any party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.




     Section 5.
Interpretation. When a reference is made in this Agreement to
a Section, or an Exhibit, such reference will be to a Section of, or an Exhibit
to, this Agreement unless otherwise indicated. Whenever the words “include”,
“includes” or “including” are used in this Agreement, they will be deemed to be
followed by the words “without limitation”. The words “hereof”, “herein” and
“hereunder” and words of similar import when used in this Agreement will refer
to this Agreement as a whole and not to any particular provision of this
Agreement. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such term.



     Section 6. Counterparts. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties. An executed counterpart of
this Agreement (or any amendment hereto in accordance with Section 7 below) may
be delivered by facsimile, and a signature delivered by facsimile shall be
deemed to constitute an original signature for all purposes.



     Section 7.
Amendment; Assignment. Except with respect to Section 2
hereof, this Agreement may be amended or modified in an instrument in writing
signed by, or on behalf of, the Company, the General Partner and Summit Limited
Partners who own in the aggregate 66.67% of the Common Units held by the Summit
Limited Partners. Section 2 of this Agreement may be amended or modified in an
instrument in writing signed by, or on behalf of, the Company, the General
Partner and Summit Limited Partners who own in the aggregate 80% of the Common
Units held by the Summit Limited Partners. Neither this Agreement nor any of
the rights, interests or obligations under this Agreement may be assigned, in
whole or in part, by the Company, the General Partner or the Partnership
without the prior written consent of the other parties; provided that
notwithstanding the foregoing, this Agreement may be assigned, including by
operation of law, by the Partnership, the General Partner or the Company to a
successor in any merger, consolidation, sale of all or substantially all assets
or similar transaction effected in compliance with Section 7.3 and Article 16
of the Partnership Agreement. Any assignment in violation of the preceding
sentence will be void ab initio. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and assigns. Notwithstanding
anything in this Agreement to the contrary, the benefits of this Agreement
shall inure to any Person to whom a Summit Limited Partner shall assign or
otherwise transfer a Common Unit, provided that the benefits of Section 2 shall
only inure to assignees or transferees in a carryover basis transaction (i.e.,
assignees or transferees whose adjusted basis in such Common Unit is determined
in whole or in part by reference to the Summit Limited Partner’s adjusted basis
in such Common Unit).



     Section 8. Execution as Partners. The General Partner acknowledges that it
is executing this Agreement in its capacity as the general partner of the
Partnership and the Summit Limited Partners are executing this Agreement in
their capacities as limited partners of the Partnership, subject to the
Delaware Revised Uniform Limited Partnership Act and with such



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duties to each other relating to the provisions hereof as if the
provisions herein were contained within the Partnership Agreement.



     Section 9. Entire Agreement. This Agreement constitutes, together with
the Partnership Agreement and the Registration Rights Agreement, the entire
agreement and supersedes all of the prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect to the
subject matter hereof.



     Section 10. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in the federal and
state courts located in Delaware, this being in addition to any other remedy to
which they are entitled at law or in equity.



     Section 11. Governing Law. This Agreement will be governed by, and
construed in accordance with, the internal laws of the State of Delaware
regardless of the laws that might otherwise govern under applicable principles
of conflict of laws.



     Section 12.
 Consent to Venue. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the sole and exclusive
jurisdiction of the courts of the State of Delaware and of the United States
District Court for the District of Delaware (the “Delaware Courts”) for any
litigation arising out of or relating to this Agreement, or the negotiation,
validity or performance of this Agreement, or the transactions contemplated
hereby (and agrees not to commence any litigation relating thereto except in
such courts), waives an objection to the laying of venue of any such litigation
in the Delaware Courts and agrees not to plead or claim in any Delaware Court
that such litigation brought therein has been brought in an inconvenient forum.
Each of the parties hereto agrees, (a) to the extent such party is not
otherwise subject to service of process in the State of Delaware, to appoint
and maintain an agent in the State of Delaware as such party’s agent for
acceptance of legal process, and (b) that service of process may also be made
on such party by prepaid certified mail with a proof of mailing receipt
validated by the United States Postal Service constituting evidence of valid
service. Service made pursuant to (a) or (b) above shall have the same legal
force and effect as if served upon such party personally within the State of
Delaware.



     Section 13.
 Severability. If any provision of this Agreement, or the
application thereof to any person or circumstance is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable



[Remainder of page intentionally left blank]




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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date first written above.



	 
	THE COMPANY:

	 
	CAMDEN PROPERTY TRUST

	 
	By:   

	


	Name:

	Title:

	 
	THE GENERAL PARTNER:

	 
	CAMDEN SUMMIT, INC.

	 
	By:    

	


	Name:

	Title:

	 
	THE PARTNERSHIP:

	 
	CAMDEN SUMMIT PARTNERSHIP, L.P.

	 
	By:
CAMDEN SUMMIT, INC.

         its General Partner

	 
	By:    

	


	Name:

	Title:

	 
	THE LIMITED PARTNERS:

	


	   

	Name:

	 
	Address:

	


	


	










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