Exhibit 10.3A
FIRST AMENDMENT TO
LIMITED PARTNERSHIP AGREEMENT
OF
THE XXXXX LIMITED PARTNERSHIP
THIS FIRST AMENDMENT TO LIMITED PARTNERSHIP AGREEMENT OF THE XXXXX
LIMITED PARTNERSHIP (this "Amendment"), dated as of April 27, 2001, is entered
into by The Xxxxx Corporation, a Delaware corporation, as general partner (the
"General Partner") of The Xxxxx Limited Partnership (the "Partnership"), for
itself and on behalf of the limited partners of the Partnership.
WHEREAS, Section 4.2(A) of the Limited Partnership Agreement of
the Partnership (as heretofore amended, the "Partnership Agreement") authorizes
the General Partner to cause the Partnership to issue additional Partnership
Units (as hereinafter defined) in one or more classes or series, with such
designations, preferences and relative, participating, optional or other special
rights, powers and duties, all as determined by the General Partner;
WHEREAS, Section 4.2(B) of the Limited Partnership Agreement provides
that the General Partner shall not issue rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock of the General Partner ("REIT Shares")
(collectively, "Additional REIT Securities"), other than to all holders of REIT
Shares, unless the General Partner causes the Partnership to issue to the
General Partner Partnership Interests having designations, preferences and other
rights, all such that the economic interests are substantially the same as those
of the Additional REIT Securities;
WHEREAS, the General Partner has entered into a Securities
Purchase Agreement, dated as of April 27, 2001, pursuant to which the General
Partner has agreed to issue shares of a newly created series of capital stock,
designated Series A Cumulative Convertible Preferred Stock (the "Series A
Preferred Stock");
WHEREAS, pursuant to the authority granted to the General Partner
pursuant to Section 11.1(A) of the Partnership Agreement, the General Partner
desires to amend the Partnership Agreement (i) to establish a new class of
Units, to be entitled Series A Cumulative Convertible Preferred Partnership
Units (the "Series A Preferred Partnership Units"), and to set forth the
designations, rights, powers, preferences and duties of such Series A Preferred
Partnership Units, which are substantially the same as those of the Series A
Preferred Stock, and (ii) to make certain other changes to the Partnership
Agreement.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the General Partner hereby amends the Partnership Agreement, as
follows:
1. AMENDMENTS TO ARTICLE II. Article II of the Partnership Agreement is
hereby amended to add the following definitions:
1
COMMON UNIT: Shall mean a Partnership Unit that is not a
Preferred Unit.
LIQUIDATION PREFERENCE AMOUNT: Shall mean, with respect to any
Preferred Unit as of any date of determination, the amount (including
accrued and unpaid distributions to the date of determination) payable
with respect to such Preferred Unit (as established by the instrument
designating such Preferred Unit) upon the voluntary or involuntary
liquidation, dissolution or winding up of the Partnership as a
preference over distributions to Units ranking junior to such Preferred
Unit.
PREFERRED UNIT: Shall mean any Partnership Unit issued from
time to time pursuant to Section 4.2 hereof that is specifically
designated by the General Partner at the time of its issuance as a
Preferred Unit. Each class or series of Preferred Units shall have such
designations, preferences, and relative, participating, optional, or
other special rights, powers, and duties, including rights, powers, and
duties senior to the Common Units and other Preferred Units, if
applicable, all as and to the extent determined by the General Partner,
subject to compliance with the requirements of Section 4.2 hereof.
In addition, the definitions of "Partnership Unit," "Percentage of Partnership
Interest," and "Share Payment" appearing in Article II of the Partnership
Agreement are hereby deleted in their entirety and the following definitions are
inserted in their place:
PARTNERSHIP UNIT: Shall mean a fractional undivided share of a
class or series of Partnership Interests. The ownership of Partnership
Units shall be evidenced by such form of certificate as the General
Partner may adopt from time to time on behalf of the Partnership.
Without limitation on the authority of the General Partner as set forth
in Section 4.2 hereof (but subject to the limitations thereof), the
General Partner may designate any Partnership Units, when issued, as
Common Units or as Preferred Units, may establish any other class of
Partnership Units, and may designate one or more series of any class of
Partnership Units.
PERCENTAGE OF PARTNERSHIP INTEREST: As to a Partner, with
respect to any class or series of Partnership Units held by such
Partner, its interest in such class or series of Partnership Units as
determined by dividing the number of Partnership Units in such class or
series owned by such Partner by the total number of Partnership Units
in such class or series then outstanding. For purposes of determining
the rights and relationships among the various classes and series of
Partnership Units, Preferred Units shall not be considered to have any
share of the aggregate Percentage of Partnership Interest in the
Partnership unless, and only to the extent, provided otherwise in the
instrument creating such class or series of Preferred Units.
SHARE PAYMENT: The payment to a Redeeming Party of a number of
REIT Shares determined by multiplying (i) the number of Common Units
tendered for redemption by a Redeeming Party pursuant to a validly
2
proffered Redemption Notice by (ii) the Conversion Multiple; PROVIDED
that in the event the General Partner issues to all holders of REIT
Shares rights, options, warrants or convertible or exchangeable
securities entitling the shareholders to subscribe for or purchase REIT
Shares, or any other securities or property (collectively, the
"rights"), then the Share Payment shall also include such rights that a
holder of that number of REIT Shares would be entitled to receive had
it owned such REIT Shares at the time such rights were issued.
2. AMENDMENTS TO SECTION 4.2. Section 4.2 of the Partnership Agreement
is hereby amended by adding after Section 4.2(C) the following section:
D. SERIES A PREFERRED PARTNERSHIP UNITS. Under the authority
granted to it by Section 4.2(A) hereof, the General Partner hereby
establishes an additional class of Partnership Units entitled "Series A
Cumulative Convertible Preferred Partnership Units" (the "Series A
Preferred Partnership Units"). Series A Preferred Partnership Units
shall have the designations, preferences, rights, powers and duties as
set forth in EXHIBIT 4 hereto.
3. AMENDMENTS TO SECTIONS 5.2(A) AND (B). Sections 5.2(A) and 5.2(B) of
the Partnership Agreement are hereby amended and restated in their entirety as
follows:
(A) PROFITS. After giving effect to the special allocations,
if any, provided in SECTIONS 5.2(C) and (D) (including SECTION
5.2(C)(5) thereof regarding the allocation of income to holders of
Preferred Units), Profits in each Fiscal Year shall be allocated in the
following manner and order of priority:
(1) To the General Partner until the cumulative allocations of
Profits under this SECTION 5.2(A)(1) equals the cumulative Losses
allocated to the General Partner under SECTION 5.2(B)(3) hereof.
(2) To those Partners who have received allocations of Losses
under SECTION 5.2(B)(2) hereof until the cumulative allocations of
Profits under this SECTION 5.2(A)(2) equal such cumulative allocations
of Losses (such allocation of Profits to be in proportion to the
cumulative allocations of Losses under such section to each such
Partner).
(3) To the Partners until the cumulative allocations of
Profits under this SECTION 5.2(A)(3) equals the cumulative allocations
of Losses to such Partners under SECTION 5.2(B)(1) hereof (such
allocation of Profits to be in proportion to the cumulative allocations
of Losses under such section to each such Partner).
(4) Any remaining Profits shall be allocated to the Partners
who hold Common Units in proportion to their respective Percentages of
Partnership Interest as holders of Common Units.
3
B. LOSSES. After giving effect to the special allocations, if
any, provided in SECTIONS 5.2(C) and (D), Losses shall be allocated to
the Partners in the following manner and order of priority:
(1) To the Partners who hold Common Units in accordance with
their respective Percentages of Partnership Interest as holders of
Common Units, except as otherwise provided in this SECTION 5.2(B).
(2) To the extent that an allocation of Losses under SECTION
5.2(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 Losses shall
instead be allocated to those Partners, if any, for whom such
allocation of Losses would not cause or increase an Adjusted Capital
Account Deficit (including, without limitation, those Partners
guaranteeing debt, making loans to the Partnership, or having liability
for Partnership debt). Solely for purposes of this SECTION 5.2(B)(2),
the Adjusted Capital Account Deficit, in the case of the General
Partner, shall be determined without regard to the amount credited to
the General Partner's Capital Account for the aggregate Liquidation
Preference Amount attributable to the General Partner's Preferred
Units. The Losses allocated under this SECTION 5.2(B)(2) shall be
allocated among the Partners who may receive such allocation in
proportion to and to the extent of the respective amounts of Losses
that could be allocated to such Partners without causing such Partners
to have an Adjusted Capital Account Deficit.
(3) Any remaining Losses shall be allocated to the General
Partner.
4. AMENDMENTS TO SECTION 5.2(C). Section 5.2(C) of the Partnership
Agreement is hereby amended to add new Section 5.2(C)(5) as follows and existing
Sections 5.2(C)(5), (6) and (7) shall be redesignated as Sections 5.2(C)(6),
(7), and (8), respectively:
(5) PRIORITY ALLOCATION WITH RESPECT TO PREFERRED UNITS. Any
remaining items of Partnership gross income or gain for the tax year,
if any, shall be specially allocated to the General Partner or any
other Partner that holds Preferred Units in an amount equal to the
excess, if any, of the cumulative distributions received by such
Partner for the current year and all prior years (other than
distributions that are treated as being in satisfaction of the
Liquidation Preference Amount for any Preferred Units held by such
Partner or amounts paid in redemption of any Preferred Units, except to
the extent that the Liquidation Preference Amount or amount paid in
redemption includes accrued and unpaid distributions or otherwise
exceeds the amount credited to the Capital Account in respect of such
Preferred Units) over the cumulative allocations of Partnership gross
income and gain to such Partner under this Section 5.2(C)(5) for all
prior years.
4
5. AMENDMENTS TO SECTION 5.3. Section 5.3 of the Partnership Agreement
is hereby amended and restated in its entirety as follows:
SECTION 5.3 DISTRIBUTIONS OF NET CASH FLOW.
(A) The General Partner shall distribute at least quarterly an
amount equal to the Net Cash Flow generated by the Partnership during
such quarter or shorter period to the Partners who are Partners on the
Record Date established by the General Partner for the distribution
with respect to such quarter or shorter period in the following order
of priority:
(i) First, to the holders of Preferred Units in such amount as is
required for the Partnership to pay all distributions with
respect to such Preferred Units due or payable in accordance
with the instruments designating such Preferred Units through
the last day of such quarter or shorter period; such
distributions shall be made to such Partners in such order of
priority and with such preferences as have been established
with respect to such Preferred Units as of the last day of
such calendar quarter or shorter period; and then
(ii) To the Partners, PRO RATA, in proportion to their respective
Percentages of Partnership Interest in the Common Units on
such Partnership Record Date;
(B) Notwithstanding anything to the contrary contained herein,
in no event shall a Partner receive a distribution of Net Cash Flow
with respect to any Common Unit with respect to any quarter or shorter
period until such time as the Partnership has distributed to the
holders of Preferred Units an amount sufficient to pay all
distributions and other amounts payable with respect to such Preferred
Units through the last day of such quarter or shorter period, in
accordance with the instruments designating such Preferred Units.
(C) Section 5.3(A) notwithstanding, but subject to any
limitation set forth in an instrument designating Preferred Units, the
General Partner shall use its best efforts to cause the Partnership to
make distributions of Net Cash Flow which are sufficient to enable the
REIT to (i) maintain its status as a real estate investment trust under
Code Section 856, (ii) avoid the imposition of any tax under Code
Section 857 and (iii) avoid the imposition of any excise tax under Code
Section 4981.
6. AMENDMENTS TO ARTICLE IX. Article IX of the Partnership Agreement is
hereby amended by adding new Section 9.7:
SECTION 9.7. PREFERRED UNITS. Notwithstanding anything
contained in SECTIONS 9.1 through 9.6, no Partner shall be entitled to
exercise the Redemption Obligation pursuant to SECTION 9.1 with respect
to any Preferred Unit unless (i) such Preferred Unit has been issued to
and is held by a Partner other than the General Partner, and (ii) the
General
5
Partner has expressly granted to such Partner the right to redeem such
Preferred Units pursuant to SECTION 9.1. Preferred Units shall be
redeemed, if at all, only in accordance with such redemption rights or
options, as are set forth with respect to such Preferred Units (or
class or series thereof) in the instruments designating such Preferred
Units (or class or series thereof).
7. AMENDMENTS TO SECTION 10.2(A). Section 10.2(A) of the
Partnership Agreement is hereby amended to add new Section 10.2(A)(3) as follows
and to amend the existing Section 10.2(A)(3) as follows and to redesignate that
Section as Section 10.2(A)(4):
(3) Third, to the holders of Preferred Units in such amount as
is required for the Partnership to pay all distributions with respect
to such Preferred Units due or payable in accordance with the
instruments designating such Preferred Units upon the liquidation or
dissolution of the Partnership; such distributions shall be made to
such Partners in such order of priority and with such preferences as
have been established with respect to such Preferred Units as of time
of the dissolution of the Partnership; and then
(4) The balance, if any, to the Partners in accordance with
the positive Capital Accounts after giving effect to all contributions,
distributions and allocations for all periods (including, without
limitation, any distributions with respect to Preferred Units pursuant
to SECTION 10.2(A)(3)) and otherwise in accordance with Section
10.3(A).
8. EXHIBITS TO PARTNERSHIP AGREEMENT.
A. The General Partner shall maintain the information set
forth in EXHIBIT 1 to the Partnership Agreement, as such information shall
change from time to time, in such form as the General Partner deems appropriate
for the conduct of the Partnership's affairs, and EXHIBIT 1 shall be deemed
amended from time to time to reflect the information so maintained by the
General Partner, whether or not a formal amendment to the Partnership Agreement
has been executed amending such EXHIBIT 1. In addition to the designation of
Series A Preferred Partnership Units pursuant to this First Amendment, such
information shall reflect (and EXHIBIT 1 shall be deemed amended from time to
time to reflect) the issuance of any additional Partnership Units to the General
Partner or any other Person, the transfer of Partnership Units and the
redemption of any Partnership Units, all as contemplated herein.
B. The Partnership Agreement is hereby amended by attaching
thereto as EXHIBIT 4 the EXHIBIT 4 attached hereto.
9. GENERAL AMENDMENTS TO PARTNERSHIP AGREEMENT.
(A) The references to Percentage Interests in the last
sentence of Section 4.2(A) of the Partnership Agreement shall be deemed to refer
to Percentage of Partnership Interests in the applicable class or series of
Partnership Interests.
6
(B) The reference to Limited Partner Units appearing in
Section 11.1(A) of the Partnership Agreement (including as those provisions are
applied for purposes of Section 11.2(A)) shall be deemed to refer only to
Limited Partner Units that are Common Units. The references in Section 11.2(B)
of the Partnership Agreement to Percentage Interests of the Limited Partners
shall be deemed to refer only to Percentage Interests in Common Units held by
Limited Partners or Common Units that are included in the Limited Partner
Interest of the General Partner, as the case may be.
10. CERTAIN CAPITALIZED TERMS. All capitalized terms used in this
First Amendment and not otherwise defined shall have the meanings assigned in
the Partnership Agreement. Except as modified herein, all terms and conditions
of the Partnership Agreement shall remain in full force and effect, which terms
and conditions the General Partner hereby ratifies and affirms.
11. SEVERABILITY: If any term or other provision of this First
Amendment is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms and provisions of
this First Amendment shall remain in full force and effect and shall in no way
be effectively impaired or invalidated.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
7
IN WITNESS WHEREOF, the undersigned has executed this Amendment as
of the date first set forth above.
THE XXXXX CORPORATION,
as General Partner of
The Xxxxx Limited Partnership
and on behalf of existing Limited Partners
By: /S/ XXXXX X. XxXXXXXX
--------------------------------------------
Name: /S/ XXXXX X. XxXXXXXX
------------------------------------------
Title: PRESIDENT AND CHIEF OPERATING OFFICER
-----------------------------------------
8
EXHIBIT 4
DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES A CUMULATIVE CONVERTIBLE PREFERRED PARTNERSHIP UNITS
OF THE XXXXX LIMITED PARTNERSHIP
The Series A Cumulative Convertible Preferred Partnership Units (the
"SERIES A PREFERRED PARTNERSHIP UNITS") shall have the following preferences,
rights, powers and duties:
Section 1. LIQUIDATION. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Partnership, the holder of the Series A
Preferred Partnership Units shall be entitled to receive with respect to each
Series A Preferred Partnership Unit that it holds an amount in cash out of the
assets of the Partnership available for distribution to its Partners, before any
payment or distribution shall be made on any Junior Partnership Units, equal to
the greater of (i) the amount necessary to generate the Base Internal Rate of
Return with respect to a share of Series A Preferred Stock under the Series A
Preferred Stock Certificate of Designations plus all accumulated and accrued but
unpaid dividends (other than Regular Dividends) to which the holders of the
Series A Preferred Stock shall be entitled pursuant to the Series A Preferred
Stock Certificate of Designations and (ii) the amount a holder of a share of
Series A Preferred Stock would receive with respect to the Common Stock that
would be issued with respect to such share of Series A Preferred Stock upon the
conversion thereof as provided for in the Series A Preferred Stock Certificate
of Designations, computed as if all holders of Series A Preferred Stock had
converted their Series A Preferred Stock into Common Stock in accordance with
the provisions of the Series A Preferred Stock Certificate of Designations
immediately prior to such liquidation, dissolution or winding up. After the
payment to the holder of the Series A Preferred Partnership Units of the full
preferential amounts provided for in this Section 1, the holder of the Series A
Preferred Partnership Units as such shall have no right or claim to any of the
remaining assets of the Partnership. If upon any liquidation, dissolution or
winding up of the Partnership, whether voluntary or involuntary, the assets to
be distributed to the holder of Series A Preferred Partnership Units shall be
insufficient to permit the payment to such holder of the full preferential
amount aforesaid, then all of the assets of the Partnership available for
distribution to the holder of Series A Preferred Partnership Units shall be
distributed ratably to such holder in proportion to the number of Series A
Preferred Partnership Units held by such holder on the date of liquidation,
dissolution or winding up of the Partnership.
Section 2. DISTRIBUTIONS.
(a) PREFERENTIAL DISTRIBUTIONS. On each Distribution Payment Date, the
holder of the Series A Preferred Partnership Units shall be entitled to receive
preferential distributions ("PREFERENTIAL DISTRIBUTIONS") payable in cash in an
amount per Series A Preferred Partnership Unit equal to the per share dividend
payable on the Series A Preferred Stock on such Distribution Payment Date. The
Preferential Distributions on each Series A Preferred Partnership Unit shall
accrue on a daily basis in an amount equal to the rate at which dividends accrue
on the Series A Preferred Stock under the Series A Preferred Stock Certificate
of Designations from the later of the first day of issuance of any Series A
Preferred Partnership Unit or the
1
last preceding Distribution Payment Date (computed with respect to each Series A
Preferred Partnership Unit assuming such unit was outstanding in the last
preceding Distribution Payment Date). Such Preferential Distributions shall
accrue whether or not they have been declared and whether or not the Partnership
has the earnings, profits, surplus or other funds legally available for the
payment of such distributions. All accrued and unpaid Preferential Distributions
on the Series A Preferred Partnership Units shall be fully paid or declared with
funds irrevocably set apart for payment, and funds shall be irrevocably set
apart (but need not be escrowed) for payment of Preferential Distributions on
the next succeeding Distribution Payment Date, before any distribution or
payment can be made with respect to any Junior Partnership Units other than
distributions or payments made (1) in the form of Junior Partnership Units or
REIT Shares (as defined in the Limited Partnership Agreement), (2) in connection
with the reacquisition of shares of Common Stock in connection with the Escrow
Agreement dated as of October 23, 1998, by and among the Partnership, Chelsea
GCA Realty Partnership, LP and The First National Bank of Chicago (the "ESCROW
AGREEMENT") and (3) in connection with any redemption, purchase or other
acquisition made pursuant to the provisions of Article XII of the General
Partner's Certificate of Incorporation. To the extent not paid on each
Distribution Payment Date, all Preferential Distributions which have accrued on
each Series A Preferred Partnership Unit during the period ending upon each
Distribution Payment Date shall be accumulated and remain unpaid Preferential
Distributions with respect to such Series A Preferred Partnership Units until
paid.
(b) RECORD DATE. The record date with respect to each Distribution
Payment Date for purposes hereof shall be the day that is five (5) calendar days
prior to such Distribution Payment Date.
(c) PARTIAL PAYMENTS. If at any time the Partnership pays less than the
total amount of Preferential Distributions then accrued with respect to all
outstanding Series A Preferred Partnership Units, such payment shall be
distributed ratably among the holder of such Series A Preferred Partnership
Units based upon the number of Series A Preferred Partnership Units held by such
holder.
Section 3. REPURCHASE OF SERIES A PREFERRED PARTNERSHIP UNITS.
(A) PUT OPTION. The holder of Series A Preferred Partnership Units
has a right and option (the "PUT OPTION") to require the
Partnership to purchase all or any portion of the Series A
Preferred Partnership Units held by such holder. The Put
Option may be exercised by the holder of Series A Preferred
Partnership Units at such times as are set forth in this
Section 3(a). At any time that the General Partner is required
to purchase shares of the Series A Preferred Stock pursuant to
Section 5 of the Securities Purchase Agreement, the General
Partner shall exercise its Put Option and cause the
Partnership to purchase the number of Series A Preferred
Partnership Units that is equal to the number of shares of
Series A Preferred Stock that the General Partner is
purchasing pursuant to the Securities Purchase Agreement at a
purchase price per unit equal to the Put Option Exercise Price
as determined pursuant to the Securities Purchase
2
Agreement at the time of the purchase (the "PUT PAYMENT
AMOUNT"). The Put Payment Amount shall be payable and
distributed to the holder of the Series A Preferred
Partnership Units on or before the date fixed for the purchase
of the Series A Preferred Stock by the General Partner
pursuant to the Securities Purchase Agreement. Upon payment of
the Put Payment Amount to the General Partner, the number of
Series A Preferred Partnership Units purchased by the
Partnership in connection therewith shall be deemed cancelled,
all rights of the holder thereof shall cease (except for the
right to receive the Put Payment Amount) and the Partnership
shall not make any further distributions on such units (except
for the payment of the Put Payment Amount).
(B) CALL OPTION. The Partnership has an option (the "CALL OPTION")
to require the holder of Series A Preferred Partnership Units
to sell all the Series A Preferred Partnership Units held by
such holder. At any time that the General Partner elects to
purchase shares of the Series A Preferred Stock pursuant to
Section 6 of the Securities Purchase Agreement, the General
Partner shall cause the Partnership to exercise its Call
Option to purchase all of its Series A Preferred Partnership
Units at a purchase price per unit equal to the Call Option
Exercise Price as determined pursuant to the Securities
Purchase Agreement at the time of the purchase (the "CALL
PAYMENT AMOUNT"). The Call Payment Amount shall be payable and
distributed to the holder of the Series A Preferred
Partnership Units on or before the date fixed for the purchase
of the Series A Preferred Stock by the General Partner
pursuant to the Securities Purchase Agreement. Upon payment of
the Call Payment Amount to the General Partner, the number of
Series A Preferred Partnership Units purchased by the
Partnership in connection therewith shall be deemed cancelled,
all rights of the holder thereof shall cease (except for the
right to receive the Call Payment Amount) and the Partnership
shall not make any further distributions on such units (except
for the payment of the Call Payment Amount).
(C) REPURCHASE DUE TO SALE OF RESTRICTED PROPERTIES. At any time
that the General Partner is required to purchase shares of the
Series A Preferred Stock in connection with a Restricted
Property Transaction pursuant to Section 7 of the Securities
Purchase Agreement, the General Partner shall cause the
Partnership to purchase the number of Series A Preferred
Partnership Units that is equal to the number of shares of
Series A Preferred Stock that the General Partner is
purchasing pursuant to the Securities Purchase Agreement at a
purchase price per unit equal to the Early Sale Price or the
Standard Sale Price, whichever is applicable at the time of
such purchase under the Securities Purchase Agreement (the
"RESTRICTED PROPERTIES PAYMENT AMOUNT"). The Restricted
Properties Payment Amount shall be
3
payable and distributed to the holder of the Series A
Preferred Partnership Units on or before the date fixed for
the purchase of the Series A Preferred Stock by the General
Partner pursuant to the Securities Purchase Agreement. Upon
payment of the Restricted Properties Payment Amount to the
General Partner, the number of Series A Preferred Partnership
Units purchased by the Partnership in connection therewith
shall be deemed cancelled, all rights of the holder thereof
shall cease (except for the right to receive the Restricted
Properties Payment Amount) and the Partnership shall not make
any further distributions on such units (except for the
payment of the Restricted Properties Payment Amount).
Section 4. CONVERSION. At any time that a holder of shares of Series A
Preferred Stock converts into Common Stock shares of Series A Preferred Stock,
the General Partner shall convert its Series A Preferred Units into Common
Units, as set forth herein. Upon each conversion of shares of Series A Preferred
Stock (the "Converted Series A Preferred Stock") into Common Stock, the General
Partner shall convert that portion of its Series A Preferred Partnership Units
equal to the number of shares of Series A Preferred Stock that are so converted.
At the effective time of conversion, the Partnership shall cancel such number of
Series A Preferred Partnership Units and issue to the General Partner the number
of Common Units equal to the number determined by dividing the number of shares
of Common Stock issued upon conversion of the Converted Series A Preferred Stock
by the Conversion Multiple (as defined in the Limited Partnership Agreement). In
addition, upon such conversion, the holder of the Series A Preferred Partnership
Units shall be entitled to receive distributions payable in cash in an amount
equal to the sum of all accumulated and accrued but unpaid Preferential
Distributions on the Series A Preferred Partnership Units that are converted and
cancelled plus the amount of all cash payable by the General Partner in lieu of
the issuance of any fractional share of Common Stock in connection with the
conversion of the Converted Series A Preferred Stock.
Section 5. PRIORITY OF SERIES A PREFERRED PARTNERSHIP UNITS;
SUBORDINATION OF JUNIOR UNITS. Notwithstanding anything to the contrary herein,
so long as any Series A Preferred Partnership Units remain outstanding, the
Series A Preferred Partnership Units shall rank prior to any other class or
series of Partnership Units or Partnership Interests of the Partnership, whether
now or hereafter authorized or outstanding, and the Partnership shall not (i)
without the consent of the holder(s) of a majority of the Series A Preferred
Partnership Units then outstanding, declare or make any distribution with
respect to any Junior Partnership Units so long as any accumulated or accrued
Preferential Distributions on the Series A Preferred Partnership Units as of the
immediately preceding Distribution Payment Date remain unpaid or funds for the
payment of all Preferential Distributions accrued since the immediately
preceding Distribution Payment Date have not been irrevocably set apart (but
need not be escrowed) for such payment on the next succeeding Dividend Reference
Date or an Event of Noncompliance has occurred and has not been cured, or (ii)
redeem, purchase or otherwise acquire directly or indirectly any Junior
Partnership Units other than (1) Junior Partnership Units acquired solely in
exchange for other Junior Partnership Units, (2) in connection with the
reacquisition of shares of Common Stock
4
in connection with the Escrow Agreement, (3) in connection with any redemption,
purchase or other acquisition made pursuant to the provisions of Article XII of
the General Partner's Certificate of Incorporation and (4) Partnership Units the
purchase price of which, when aggregated with the aggregate purchase price of
Partnership Units or Common Stock redeemed or purchased by the General Partner
or the Partnership after the date of the filing of the Series A Preferred Stock
Certificate of Designations does not exceed $50,000,000 and when aggregated with
the aggregate purchase price of Partnership Units or Common Stock redeemed or
purchased by the General Partner or the Partnership during any twelve month
period does not exceed $25,000,000; provided, however, no such redemption,
purchase or acquisition may be made if a Distribution Default, a Redemption
Default or a Material Event of Noncompliance has occurred and has not been cured
or a Material Event of Noncompliance would be triggered by such redemption,
purchase or acquisition, in each case, if immediately after any such
distribution, redemption, purchase or acquisition, any Series A Preferred
Partnership Unit shall be outstanding.
Section 6. VOTING RIGHTS. Except as otherwise required by law or
provided herein, the Series A Preferred Partnership Units shall have no voting
rights.
Section 7. MISCELLANEOUS.
(a) TRANSFER. The Series A Preferred Partnership Units shall
be owned and held solely by the General Partner and shall not be transferable by
the General Partner.
(b) STATUS OF REACQUIRED UNITS. All Series A Preferred
Partnership Units that shall have been issued and reacquired in any manner by he
Partnership shall be deemed cancelled.
(c) CERTIFICATES. The ownership of Series A Preferred
Partnership Units may (but need not, in the sole discretion of the General
Partner) be evidenced by one or more certificates. The General Partner shall
amend Exhibit 1 of the Limited Partnership Agreement from time to time to the
extent necessary to reflect accurately the issuance of, and subsequent
conversion, redemption, or any other event having an effect on the ownership of
the Series A Preferred Partnership Units.
(d) GENERAL PARTNERS RIGHTS. The rights of the General
Partner, in its capacity as the holder of the Series A Preferred Partnership
Units, are in addition to and not in limitation of any other rights or authority
of the General Partner in any other capacity under the Limited Partnership
Agreement or applicable law. In addition, nothing contained in this EXHIBIT 4
shall be deemed to limit or otherwise restrict the authority of the General
Partner under the Limited Partnership Agreement, other than in its capacity as
the holder of the Series A Preferred Partnership Units.
5
SECTION 8. DEFINITIONS.
"BASE INTERNAL RATE OF RETURN" shall have the meaning ascribed thereto
in the Series A Preferred Stock Certificate of Designations.
"CALL OPTION" shall have the meaning set forth in Section 3(b) hereof.
"CALL OPTION EXERCISE PRICE" shall have the meaning ascribed thereto in
the Securities Purchase Agreement.
"CALL PAYMENT AMOUNT" shall have the meaning set forth in Section 3(b)
hereof.
"COMMON STOCK" means the voting common stock, par value $0.01 per share
of the Corporation.
"COMMON UNIT" shall have the meaning ascribed thereto in the Limited
Partnership Agreement.
"CONVERTED SERIES A PREFERRED STOCK" shall have the meaning set forth
in Section 4 hereof.
"DISTRIBUTION DEFAULT" means the non-payment in full of all accumulated
or accrued Preferential Distributions as of any Distribution Payment Date for
any reason on or before the date which is 30 days after such Distribution
Payment Date.
"DISTRIBUTION PAYMENT DATE" means each Dividend Reference Date under
the Series A Preferred Stock Certificate of Designations.
"EARLY SALE PRICE" shall have the meaning ascribed thereto in the
Securities Purchase Agreement.
"ESCROW AGREEMENT" shall have the meaning set forth in Section 2(a)
hereof.
"EVENT OF NONCOMPLIANCE" has the meaning ascribed thereto in the
Securities Purchase Agreement.
"GENERAL PARTNER" shall mean The Xxxxx Corporation, a Delaware
corporation.
"JUNIOR PARTNERSHIP UNITS" means any Partnership Interests or
Partnership Units of the Partnership other than the Series A Preferred
Partnership Units.
"LIMITED PARTNERSHIP AGREEMENT" shall mean The Xxxxx Limited
Partnership Limited Partnership Agreement, as amended.
"MATERIAL EVENT OR NONCOMPLIANCE" has the meaning ascribed thereto in
the Securities Purchase Agreement.
"PARTNERSHIP" means The Xxxxx Limited Partnership.
6
"PARTNERSHIP UNIT" shall have the meaning ascribed thereto in the
Limited Partnership Agreement.
"PREFERENTIAL DISTRIBUTIONS" shall have the meaning set forth in
Section 2(a) hereof.
"PUT OPTION" shall have the meaning set forth in Section 3(a) hereof.
"PUT OPTION EXERCISE PRICE" shall have the meaning ascribed thereto in
the Securities Purchase Agreement.
"PUT PAYMENT AMOUNT" shall have the meaning set forth in Section 3(a)
hereof.
"REDEMPTION DEFAULT" means the non-payment in full of all payments due
by the Partnership when and as such payments become due in connection with the
events described under Section 3 of this Certificate of Designation.
"REGULAR DIVIDENDS" shall have the meaning ascribed thereto in the
Series A Preferred Stock Certificate of Designations.
"RESTRICTED PROPERTIES PAYMENT AMOUNT" shall have the meaning set forth
in Section 3(c) hereof.
"RESTRICTED PROPERTY TRANSACTION" shall have the meaning ascribed
thereto in the Securities Purchase Agreement.
"SECURITIES PURCHASE AGREEMENT" means the Securities Purchase
Agreement, dated as of April 27, 2001, by and between the Corporation and iStar
Preferred Holdings LLC, a Delaware limited liability company, pursuant to which
shares of the Series A Preferred Stock were issued, as such agreement may be
amended from time to time in accordance with its terms.
"SERIES A PREFERRED STOCK CERTIFICATE OF DESIGNATIONS" shall mean the
Certificate of Designations, Preferences and Rights Relating to the Series A
Cumulative Convertible Preferred Stock, par value $0.01 per share, of the
General Partner.
"SERIES A PREFERRED STOCK" shall mean the Series A Cumulative
Convertible Preferred Stock, par value $.01 per share, of the General Partner as
designated pursuant to the Series A Preferred Stock Certificate of Designations.
"STANDARD SALE PRICE" shall have the meaning ascribed thereto in the
Securities Purchase Agreement.
7
