FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF LIGHTSTONE VALUE PLUS REIT LP
FIRST
AMENDMENT
TO
AMENDED
AND RESTATED
OF
LIGHTSTONE
VALUE PLUS REIT LP
THIS
FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
LIGHTSTONE VALUE PLUS REIT LP (this “Amendment”) is made as of June 26, 2008 by
and among Lightstone Value Plus Real Estate Investment Trust, Inc., a Maryland
corporation (the “REIT”), as the General Partner of Lightstone Value Plus REIT
LP., a Delaware limited partnership (the “Partnership”), Lightstone Value Plus
REIT LLC, a Delaware limited liability company, as the Initial Limited Partner
and sole existing limited partner of the Partnership, Lightstone SLP, LLC,
a
Delaware limited liability company, as Special General Partner of the
Partnership, Arbor Mill Run JRM LLC, a Delaware limited liability company
(“Arbor JRM”) and Arbor National CJ, LLC, a New York limited liability company
(“Arbor CJ”). Capitalized terms used but not otherwise defined in this Amendment
shall have the meanings given to such terms in the Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of April 22,
2005,
by and among the REIT, the Initial Limited Partner and Special General Partner
and the other parties signatory thereto (the “Partnership
Agreement”).
WITNESSETH:
WHEREAS,
on the date hereof, Arbor JRM has contributed a 22.08% common interest in Mill
Run L.L.C., a Delaware limited liability company (“Mill Run”), representing all
of its membership interest in Mill Run, to the Partnership (the “Arbor JRM
Contribution”) pursuant to that certain Contribution and Conveyance Agreement
dated as of the date hereof by and between Arbor JRM and the Partnership (the
“Arbor JRM Contribution Agreement”);
WHEREAS,
on the date hereof, Arbor CJ has contributed a 0.46% common interest in Mill
Run, representing all of its membership interest in Mill Run, to the Partnership
(the “Arbor CJ Contribution”) pursuant to that certain Contribution and
Conveyance Agreement dated as of the date hereof by and between Arbor CJ and
the
Partnership (the “Arbor CJ Contribution Agreement”);
WHEREAS,
AR Prime Holdings LLC, a Delaware limited liability company (“AR Prime”), the
REIT and the Partnership are parties to that certain Contribution and Conveyance
Agreement dated as the date hereof (the “AR Prime Contribution Agreement”)
pursuant to which, upon the closing of the AR Prime Contribution Agreement,
AR
Prime will contribute its 25% membership interest in Prime Outlets Acquisition
Company LLC, a Delaware limited liability company (“POAC”), representing all of
its membership interest in POAC, to the Partnership (the “POAC
Contribution”);
WHEREAS,
pursuant to each of the Arbor JRM Contribution Agreement, the Arbor CJ
Contribution Agreement and the AR Prime Contribution Agreement, and in exchange
for each of the Arbor JRM Contribution, the Arbor CJ Contribution and the POAC
Contribution, respectively, the Partnership has agreed to issue to Arbor JRM
and
Arbor CJ, respectively, on the date hereof, and to AR Prime, upon the closing
of
the POAC Contribution, certain common Limited Partner Interests in the
Partnership as well as certain preferred Limited Partner Interests represented
by a newly designated preferred class of Limited Partner Interest of the
Partnership with the rights, privileges and preferences set forth on Exhibit
A
hereto (the “Series A Preferred Units”); and
WHEREAS,
the parties to this Amendment desire to amend the Partnership Agreement to
reflect the creation of the Series A Preferred Units and the rights, privileges
and preferences thereof.
NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows.
1. Pursuant
to Section 4.3 of the Partnership Agreement, the Partnership Agreement is hereby
amended (i) to create the Series A Preferred Units with the rights, privileges
and preferences set forth on Exhibit A attached hereto and (ii) to admit each
of
Arbor JRM and Arbor CJ as a Limited Partner of the Partnership as of the date
hereof in accordance with the provisions of the Arbor JRM Contribution Agreement
and the Arbor CJ Contribution Agreement, respectively, and, upon and as of
closing of the transactions contemplated by the POAC Contribution Agreement,
to
admit AR Prime as a Limited Partner of the Partnership effective as of the
closing date of the POAC Contribution in accordance with the provisions of
the
AR Prime Contribution Agreement.
2. Section
5.1 of the Partnership Agreement is hereby amended to provide that,
notwithstanding anything in the Partnership Agreement to the contrary,
distributions payable with respect to the Series A Preferred Units as provided
in Section 4 of Exhibit A attached hereto or, in the event of a Liquidation
(as
defined in Exhibit A attached hereto) that is not a Liquidating Event, as
provided in Section 5 of Exhibit A attached hereto, shall have priority over
all
of the other distributions to Partners pursuant to Section 5.1 of the
Partnership Agreement.
3. Article
6
and Exhibit B of the Partnership Agreement are hereby amended to provide that,
notwithstanding anything in the Partnership Agreement to the contrary,
allocations of Net Income and Net Loss to holders of Series A Preferred Units
in
any year shall be limited as provided in Section 4(F) of Exhibit A attached
hereto.
2
4. Section
13.2 of the Partnership Agreement is hereby amended to provide that,
notwithstanding anything in the Partnership Agreement to the contrary,
distributions payable with respect to the Series A Preferred Units as provided
in Section 5 of Exhibit A attached hereto shall have priority over all of the
other distributions to Partners following a Liquidating Event, including any
distributions pursuant to Section 13.2(a)(iii)(D).
5. The
Partnership Agreement is hereby amended to the fullest extent necessary to
effect all of the matters contemplated by this Amendment, including but not
limited to the terms set forth on Exhibit A hereto, and including, without
limitation, the voting rights of the holders of Series A Preferred Units and
restrictions on the General Partner and the Partnership that are set forth
in
Section 8 of Exhibit A attached hereto. Except as specifically provided for
in
this Amendment, the provisions of the Partnership Agreement shall remain in
full
force and effect.
6. The
execution, delivery and effectiveness of this Amendment shall not operate (a)
as
an amendment or modification of any provision, right or obligation of any
Partner under the Partnership Agreement except as specifically set forth in
this
Amendment or (b) as a waiver or consent to any subsequent action or
transaction.
7. This
Amendment shall be construed and enforced in accordance with and governed by
the
laws of the State of Delaware, without regard to the principles of conflicts
of
laws thereof.
8. This
Amendment contains the entire understanding among the parties with respect
to
the subject matter hereof and supersedes any other prior written or oral
understanding or agreements among their with respect thereto.
9. This
Amendment may be executed in one or more counterparts, each of which shall
be an
original and all of which, when taken together, shall constitute one and the
same agreement.
10. This
Amendment shall become effective when each party hereto shall have received
a
counterpart hereof signed by all of the other parties hereto.
[SIGNATURE
PAGE TO FOLLOW]
3
IN
WITNESS WHEREOF,
each of
the undersigned has caused this Amendment to be duly executed on its behalf
as
of the date first above written.
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GENERAL
PARTNER:
LIGHTSTONE
VALUE PLUS REAL ESTATE
INVESTMENT
TRUST, INC.
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| By: | ||
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Xxxxx
Xxxxxxxxxxxx
Chief
Executive Officer and President
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LIMITED
PARTNER:
LIGHTSTONE
VALUE PLUS REIT LLC
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| By: | ||
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Xxxxx
Xxxxxxxxxxxx
Authorized
Person
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SPECIAL
GENERAL PARTNER:
LIGHTSTONE
SLP, LLC
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| By: | ||
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Xxxxx
Xxxxxxxxxxxx
Authorized
Person
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ARBOR
JRM:
ARBOR
MILL RUN JRM LLC
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| By: | ||
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Name:
|
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| Title: | ||
4
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ARBOR
CJ:
ARBOR
NATIONAL CJ, LLC
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| By: | ||
|
Name: |
||
| Title: | ||
5
EXHIBIT
A
TERMS
OF SERIES A PREFERRED UNITS
In
accordance with Section 4.3 of the Partnership Agreement, set forth below are
the terms and conditions of the Series A Preferred Units established by the
Partnership on June 26, 2008.
1. Definitions.
For
purposes of the Series A Preferred Units, the following terms shall have the
meanings indicated in this Section 1. Capitalized terms used but not otherwise
defined in this Exhibit A shall have the meanings set forth in Article I of
the
Partnership Agreement, as amended by the Amendment to which this Exhibit A
is
attached.
“Common
Units” shall mean any class or series of Partnership Interest that does not have
a priority or preference in the payment of distributions in the distribution
of
assets upon any Liquidation, including but not limited to all partnership
Interests issued to the General partner or to the Special General Partner.
“Estimated
Market Price” shall have the meaning set forth in Section 6(A) of this Exhibit
A.
“Liquidation”
shall mean the occurrence of any Liquidating Event or any lease or transfer
of
all or substantially all of the Partnership’s property or assets.
“Lockout
Date” shall mean June 26, 2013.
“Series
A
Distribution Payment Date” shall mean with respect each calendar quarter a date
that is no later than 30 days after the end of such calendar quarter.
“Series
A
Distribution Period” shall mean quarterly distribution periods commencing on
January 1, April 1, July 1 and October 1 of each year and ending on and
including the day preceding the first day of the next succeeding Series A
Distribution Period.
“Series
A
Distribution Record Date” shall have the meaning set forth in Section 6(C) of
this Exhibit A.
“Series
A
Junior Units” shall mean Common Units and any Partnership Units of any other
class or series now or hereafter issued and outstanding that are not Series
A
Senior Units, Series A Preferred Units or Series A Parity Units.
“Series
A
Liquidation Preference” shall have the meaning set forth in Section 5(A) of this
Exhibit A.
“Series
A
Parity Units” shall mean any class or series of Limited Partner Interest now or
hereafter issued and outstanding, whether or not the distribution rates thereof
shall be different from those of the Series A Preferred Units, if the holders
of
such class or series and the Series A Preferred Units shall be entitled to
(i)
the receipt of distributions in proportion to their respective amounts of
accrued and unpaid distributions per unit and (ii) amounts distributable upon
Liquidation in proportion to their respective liquidation preferences, in each
case without preference or priority one over the other.
6
“Series
A
Senior Units” shall mean any class or series of Partnership Interest of the
Partnership hereafter issued and outstanding, if the holders of such class
or
series shall be entitled to the receipt of distributions prior to a Liquidation
or of amounts distributable upon any event of Liquidation, in preference or
priority to the holders of Series A Preferred Units.
2. Number
of Preferred Units and Designation.
This
series of preferred Partnership Interests shall be designated as the 4.6316%
Series A Preferred Limited Partner Interests (the “Series A Preferred Units”).
The number of units which shall initially constitute such series shall be 80,000
units.
3. Ranking.
The
Series A Preferred Units shall, with respect to the payment of distributions
and
the right to receive the Series A Liquidation Preference upon a Liquidation,
rank junior to all Series A Senior Units; rank senior to all Series A Junior
Units, and rank in parity with all Series A Parity Units.
4. Distributions.
(A) Subject
to the preferential rights of the holders of any Series A Senior Units, the
holders of Series A Preferred Units shall be entitled to receive, when, as
and
if declared by the General Partner, cumulative preferential distributions
payable in cash in an amount per unit equal to an annual rate of 4.6316% payable
in arrears shall
be
calculated daily and shall be computed on the actual number of days elapsed
over
a month of 30 days and a year of 360 days; provided,
however,
that
in
the
event that the Series A Preferred Units are not redeemed by the Partnership
on
the Lockout Date or within fifteen (15) days thereafter, the annual distribution
rate applicable to the Series A Preferred Units shall increase from 4.6316%
to
fifteen percent (15%) per annum for so long as the Series A Preferred Units
remain outstanding. The
distributions shall begin to accrue and shall be fully cumulative from the
day
of issuance of any such Series A Preferred Units and shall be payable quarterly,
when, as and if declared by the General Partner, in arrears, on each Series
A
Distribution Payment Date. Each such distribution shall be payable to the
holders of record of Series A Preferred Units as they appear in the records
of
the Partnership at the close of business on such record date, not less than
10
nor more than 30 days preceding such Series A Distribution Payment Dates
thereof, as shall be fixed by the General Partner. Accrued and unpaid
distributions for any past Series A Distribution Periods may be declared and
paid at any time and for such interim periods, without reference to any regular
Series A Distribution Payment Date, to holders of record on such date, not
less
than 10 nor more than 30 days preceding the payment date thereof, as may be
fixed by the General Partner. Any distribution payment made on Series A
Preferred Units shall first be credited against the earliest accrued but unpaid
distribution due with respect to Series A Preferred Units which remains
payable.
(B) The
amount of distributions payable for any Series A Distribution Period shorter
than a full calendar quarter on the Series A Preferred Units shall be computed
by dividing the number of days in such period by 360 and multiplying the result
by the product of the annual distribution rate (i.e., 4.6316%) multiplied by
the
Series A Liquidation Preference (i.e., $1,000.00 per Series A Preferred Unit).
Holders of Series A Preferred Units shall not be entitled to any distributions,
whether payable in cash, property or shares, in excess of cumulative
distributions, as herein provided, on the Series A Preferred Units. No interest,
or sum of money in lieu of interest, shall be payable in respect of any
distribution payment or payments on the Series A Preferred Units which may
be in
arrears.
7
(C) So
long
as any Series A Preferred Units are outstanding, no distributions, except as
described in the immediately following sentence, shall be declared or paid
or
set apart for payment on any class or series of Series A Junior Units for any
period unless full cumulative distributions have been or contemporaneously
are
declared and paid or declared and a sum sufficient for the payment thereof
set
apart for such payment on the Series A Preferred Units for all Series A
Distribution Periods terminating on or prior to the distribution payment date
on
such class or series of Series A Junior Units.
(D) So
long
as any Series A Preferred Units are outstanding, no distributions, except as
described in the immediately following sentence, shall be declared or paid
or
set apart for payment on any class or series of Series A Parity Units for any
period unless full cumulative distributions have been or contemporaneously
are
declared and paid or declared and a sum sufficient for the payment thereof
set
apart for such payment on the Series A Preferred Units for all Series A
Distribution Periods terminating on or prior to the distribution payment date
on
such class or series of Series A Parity Units. When distributions are not paid
in full or a sum sufficient for such payment is not set apart, as aforesaid,
all
distributions declared upon Series A Preferred Units and all distributions
declared upon any other class or series of Series A Parity Units shall be
declared ratably in proportion to the respective amounts of distributions
accumulated and unpaid on the Series A Preferred Units and accumulated and
unpaid on such Series A Parity Units.
(E) No
distributions on Series A Preferred Units shall be declared by the General
Partner or paid or set apart for payment by the Partnership at such time as
the
terms and provisions of any agreement of the Partnership, including any
agreement relating to its indebtedness, prohibits such declaration, payment
or
setting apart for payment or provides that such declaration, payment or setting
apart for payment would constitute a breach thereof or a default thereunder,
or
if such declaration or payment shall be restricted or prohibited by
law.
(F) Subject
at all times to Section 2 and Section 3(a), (b), (e) and (f) of Exhibit B to
the
Partnership Agreement, with respect to any Partnership Year, the holders
of Series A Preferred Units shall
be
allocated Net Income, Net Loss and other allocable Partnership items of income,
gain, loss or expense, only with respect to and to the extent of the amounts
actually distributed to such holder of Series A Preferred Units for such
Partnership Year (but in no event distributed later than 30 days after the
end
of that Partnership Year) pursuant to this Section 4 on account of the annual
return accrued on the Series A Preferred Units, but none of such items shall
be
allocated to the holders of Series A Preferred Units on account of any other
distributions (all such other distributions representing a return of contributed
capital).
8
5. Liquidation
Preference.
(A) In
the
event of any Liquidation, subject to the prior preferences and other rights
of
any Series A Senior Units, before any payment or distribution of the assets
of
the Partnership (whether capital or surplus) shall be made to or set apart
for
the holders of Series A Junior Units, the holders of the Series A Preferred
Units shall be entitled to receive One Thousand Dollars ($1,000.00) (the “Series
A Liquidation Preference”) per Series A Preferred Unit plus an amount equal to
all distributions (whether or not earned or declared) accrued and unpaid thereon
to the date of final distribution to such holders; but such holders shall not
be
entitled to any further payment. If, upon any Liquidation, the assets of the
Partnership, or proceeds thereof, distributable among the holders of the Series
A Preferred Units and all Series A Parity Units shall be insufficient to pay
in
full the preferential amount aforesaid and liquidating payments on any other
units of any class or series of Series A Parity Units, then such assets, or
the
proceeds thereof, shall be distributed among the holders of Series A Preferred
Units and any such other Series A Parity Units ratably in accordance with the
respective amounts that would be payable on such Series A Preferred Units and
any such other Series A Parity Units if all amounts payable thereon were paid
in
full.
(B) Subject
to the rights of the holders of any Series A Parity Units or Series A Senior
Units, upon any liquidation, dissolution or winding up of the Partnership,
after
payment shall have been made in full to the holders of the Series A Preferred
Units, as provided in this Section 5, the holders of Series A Preferred Units
shall have no other claim to the remaining assets of the Partnership and any
other series or class or classes of Series A Junior Units shall, subject to
the
respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be paid or distributed, and the holders
of the Series A Preferred Units shall not be entitled to share therein.
6. Conversion.
(A) Unless
such Series A Preferred Units have previously been redeemed pursuant to Section
8 hereof, at the option of the holder thereof, any Series A Preferred Units
may
be converted, in whole or in part, at any time and from time to time after
the
Lockout Date, into such number of Common Units obtained by dividing the
aggregate Series A Liquidation Preference (including for this purpose any
distributions accrued and unpaid in respect of any prior Series A Distribution
Periods but not the then-current Series A distribution Period) of such Series
A
Preferred Units by the estimated fair market value of one common share in the
REIT (the “Estimated Market Value”) as determined by Xxxxxx X. Xxxxxxx &
Co., Inc. or another nationally recognized independent valuation firm with
expertise in valuing the securities of real estate investment trusts, reasonably
acceptable to the Partnership and holders owning at least sixty six and two
thirds percent (66 and 2/3%) of Series A Preferred Units.
(B) In
order
to exercise the conversion right, the holder of each applicable Series A
Preferred Unit shall surrender the certificate representing such Series A
Preferred Unit, duly endorsed or assigned to the Partnership in blank, to the
Partnership, accompanied by written notice to the Partnership that the holder
thereof elects to convert such Series A Preferred Units.
9
(C) Holders
of Series A Preferred Units at the close of business on the record date (a
“Series A Distribution Record Date”) in respect if any Series A Distribution
Payment Date shall be entitled to receive the distribution payable on such
units
on the corresponding Series A Distribution Payment Date notwithstanding the
conversion thereof following such Series A Distribution Record Date and prior
to
such Series A Distribution Payment Date.
(D) Each
conversion shall be deemed to have been effected immediately prior to the close
of business on the date on which the certificate for the Series A Preferred
Units shall have been surrendered and such notice received by the Partnership
as
aforesaid.
(E) No
fractional units or scrip representing fractions of Common Units shall be issued
upon conversion of the Series A Preferred Units. Instead of any fractional
interest in a Common Unit that would otherwise be deliverable upon the
conversion of a Series A Preferred Unit, the Partnership shall pay to the holder
of such Series A Preferred Unit an amount equal in cash based upon the then
Estimated Market Price. If more than one Series A Preferred Unit shall be
surrendered for conversion at one time by the same holder, the number of Common
Units issuable upon conversion thereof shall be computed on the basis of the
aggregate number of Series A Preferred Units so surrendered.
7. Redemption. The
Series A Preferred Units shall have no mandatory redemption or maturity date.
The Series A Preferred Units shall not be redeemable by the Partnership prior
to
the Lockout Date. On or after the Lockout Date, the Series A Preferred Units
may
be redeemed at the option of the Partnership (which notice may be delivered
prior to the Lockout Date as long as the redemption does not occur prior to
the
Lockout Date), in whole but not in part, on thirty (30) days’ prior written
notice at the option of the Partnership, at a redemption price per Series A
Preferred Unit equal to the sum of the Series A Liquidation Preference plus
an
amount equal to all distributions (whether or not earned or declared) accrued
and unpaid thereon to the date of redemption, and the redemption price shall
be
payable in cash. During any redemption notice period, the holders of the Series
A Preferred Units shall retain any conversion rights with respect to the Series
A Preferred Units. The Series A Preferred Units shall not be subject to any
sinking fund or other obligation of the Partnership to redeem or retire the
Series A Preferred Units.
8. Voting.
(A) Other
than as expressly provided in below in this Section 8, the Series A Preferred
Units shall not have any voting rights or powers, and the consent of the holders
thereof, shall not be required for the taking of any Partnership
action.
(B) As
long
as any of the Series A Preferred Units shall remain outstanding, the Partnership
shall not, and the General Partner shall not have the authority to cause the
Partnership to, take any of the following actions without the prior written
consent of holders owning at least sixty-six and two-thirds percent (66 and
2/3%) of the Series A Preferred Units then issued and outstanding, voting as
a
single class, in person or by proxy:
10
(1) Issue
any
Series A Senior Units or additional Series A Preferred Units, except for Series
A Preferred Units that are issued to AR Prime pursuant to the AR Prime
Contribution Agreement; provided,
however,
nothing
in this clause 8(B)(1) shall prohibit the Partnership from issuing Series A
Junior Units or Series A Parity Units.
(2) Issue
any
Series A Parity Units if (x) the liquidation preference for such units exceeds
the value of the consideration received by the Partnership for the issuance
of
such units, as determined by the Board of Directors of the REIT in its sole
discretion, (y) the rates at which distributions are payable on such units
are
calculated on a base amount that is higher than the liquidation preference
for
such units, or (z) the distribution payment dates for such units are not the
same as those for the Series A Preferred Units.
(3) Redeem
or
repurchase any Series A Junior Units.
(4) Redeem
or
repurchase any Series A Parity Units on or after the Lockout Date, unless
concurrently therewith all of the Series A Preferred Units are being
redeemed.
(5) Redeem
or
repurchase any Series A Party Units prior to the Lockout Date, unless the full
cumulative distributions have been or contemporaneously are declared and paid
or
set apart for payment for any past Series A Distribution Periods; provided
that in
the case of a repurchase, Series A Parity Units may not be purchased by the
Partnership at a price higher than the redemption price for such Series A Parity
Units or if no redemption price is provided for, the liquidation preference
for
such Series A Parity Units, plus any accrued and unpaid distributions thereon
to
the extent not otherwise included in the calculation of the liquidation
preference for such Series A Parity Units.
(6) (x) Effectuate
amendments to the Partnership Agreement (other than amendments to this Exhibit
A) that would materially adversely affect the terms and conditions of, or the
rights, privileges or preferences of the holders of the Series A Preferred
Units
or (y) effectuate amendments to any provisions set forth in this Amendment
that
would adversely affect the terms and conditions of, or the rights, privileges
or
preferences of the holders of the Series A Preferred Units.
(C) In
the
event that the Series A Preferred Units have not been redeemed by the
Partnership
on the Lockout Date or within fifteen (15) days thereafter, from and after
such
date the Partnership shall not, and the General Partner shall not have the
authority to cause the Partnership to, take
any
of the following actions without the prior written consent of holders owning
at
least sixty-six and two-thirds percent (66 and 2/3%) of the Series A Preferred
Units then issued and outstanding, voting as a single class in person or by
proxy:
(1) Issue
any
Partnership Interests other than Common Units.
(2) Purchase
or otherwise acquire any direct or indirect interest in real property, except
that the Partnership shall be permitted to make purchases or acquisitions of
interests in real property where the sole consideration for such purchases or
acquisitions is exclusively the issuance of Common Units. Notwithstanding the
foregoing, the Partnership shall be permitted to consummate any purchase or
acquisition from a Person other than the REIT Advisor, the Special General
Partner or any of their respective Affiliates provided that such purchase or
acquisition (i) was the subject of an executed purchase agreement dated at
least
90 days prior to the Lockout Date or (ii) is a follow-on investment in existing
real property owned by the Partnership that involves an acquisition (a) of
property adjoining property already owned by the Partnership or (b) a greater
ownership interest in property already owned by the Partnership; provided
that, in
the case of (a) and (b) above, such purchase or acquisition is being effected
in
order to protect, preserve or enhance the Partnership’s existing
investment.
11
(3) Sell,
transfer, lease as an entirety, or otherwise dispose of any direct or indirect
interest in real property; provided,
however,
that
the Partnership shall be permitted to sell, transfer, lease or otherwise dispose
of any real property to a Person other than the REIT Advisor, the Special
General Partner or any of their respective Affiliates if such transaction (i)
was the subject of a binding executed purchase agreement dated at least 90
days
prior to the Lockout Date, or (ii) none of the net proceeds of such transaction
(after customary third party transaction costs, other than those payable to
Person the REIT Advisor, the Special General Partner or any of their respective
Affiliates) shall be distributed to any holders of Series A Junior Units and
all
of such net proceeds shall instead either (x) be applied to redeem the Series
A
Preferred Units at the closing of such transaction or (y) be held in a
segregated account which may be used solely for the redemption of the Series
A
Preferred Units.
(4) Lend
money to or guarantee the obligation of, any person other than direct or
indirect subsidiaries of the REIT or the Partnership, in excess of $500,000
per
annum in the aggregate; provided
that the
Partnership shall be permitted to make any loan or guarantee that is required
to
be made pursuant to a binding executed agreement dated at least 90 days prior
to
the Lockout Date; provided,
further,
that
any such loan or guarantee permitted by the previous proviso shall not be
permitted to be made to the REIT Advisor, the Special General Partner or any
of
their respective Affiliates.
(5) Effectuate
a merger, consolidation or recapitalization of the Partnership or a conversion
of the Partnership to an entity other than a Delaware limited
partnership.
(6) Enter
into any new agreement or transaction, or modify or waive the terms of, or
agree
to terminate, any existing agreement or transaction, with the REIT Advisor,
the
Special General Partner or any of their respective Affiliates; provided,
however,
that
the foregoing restriction shall not apply to the annual renewal of the advisory
agreement with affiliates of the Partnership and the annual renewal of the
management agreements with affiliates of the Partnership; and provided,
further,
that in
addition to the renewal or extension of the term of any such advisory and
management agreement, additional amendments or modifications to such agreements
may be made as long as such amendments or modifications (including, without
limitation with respect to fees payable pursuant to such agreements) are
determined by the Board of Directors of the REIT to be market provisions and
amendments as evidenced by a report produced or compiled by Xxxxxx X Xxxxxxx
& Co., Inc. or another independent, nationally recognized valuation firm
selected by the Board of Directors of the REIT.
(D) Notwithstanding
anything in this Section 8 to the contrary, no consent of the holders of the
Series A Preferred Units shall be required with respect to any transaction
if
(x) prior to the closing of such transaction the Partnership has given written
notice that it intends to fully redeem all of the Series A Preferred Units
and
(y) at the closing of such transaction the Series A Preferred Units are fully
redeemed by the Partnership.
12
(E) The
Partnership shall not, and the General Partner shall not have the authority
to
cause the Partnership to, enter into any binding agreement to take any action
that would violate the provisions of this Section 8 (a “Restricted Agreement”);
provided,
however,
that
the General Partner shall have the authority to cause the Partnership to enter
into a Restricted Agreement if, upon the closing of the transaction contemplated
by such Restricted Agreement, the Series A Preferred Units will be redeemed
in
full by the Partnership.
9. Transfers.
Prior
to the Lockout Date, no Series A Preferred Unit shall be transferred, sold,
assigned, conveyed, gifted, pledged, encumbered, hypothecated, mortgaged,
exchanged or otherwise disposed of by law or otherwise (collectively, a
“Transfer”) without the prior written consent of the General Partner, which may
be withheld or denied by the General Partner it is sole and absolute discretion;
provided,
however,
that
notwithstanding anything in the Partnership Agreement to the contrary but
subject to the limitations set forth in Sections 11.3 (c), (d), and (e) of
the
Partnership Agreement as in effect as of June 26, 2008, prior to the Lockout
Date there
shall be no approval required for, and no restrictions whatsoever on,
any
Transfer of Series A Preferred Units to Arbor Realty Trust, Inc., Arbor
Commercial Mortgage, LLC or any of their respective controlled Affiliates,
and
there shall be no approval required for, or restrictions on, the pledge of
any
Series A Preferred Units to the REIT. Notwithstanding anything in the
Partnership Agreement to the contrary, (i) from and after the Lockout Date,
the
only restrictions in the Partnership Agreement on the Transfer of Series A
Preferred Units are those set forth in Sections 11.3 (c), (d), and (e) of the
Partnership Agreement as in effect as of June 26, 2008 and
(ii)
any Transfer in contravention of the terms of this Exhibit A shall be void
and
ineffectual and shall not be binding upon, or recognized by the
Partnership.
10. Opt-in
to Article 8 of the Uniform Commercial Code.
Pursuant to and in accordance with 6 Del. Code Section 8-103(c), all Series
A
Preferred Units shall be considered and treated as “securities” (within the
meaning of Del. Code Section 8-102(a)(15)) governed by Article 8 of the Delaware
Uniform Commercial Code. All Series A Preferred Units shall upon issuance be
evidenced and represented by Certificates of Series A Preferred Units issued
by
the Partnership to each holder of Series A Preferred Units. Such Certificate
of
Series A Preferred Interest is intended to be and shall be considered a
“security certificate” within the meaning of 6 Del. Code Section 8-102(a)(16).
The Series A Preferred Units represented or evidenced by such Certificate are
intended to be treated and shall be considered “certificated securities” within
the meaning of 6 Del. Code Section 8-102(a)(4). The General Partner and the
officers thereof are hereby authorized, empowered and directed to execute and
deliver any such Certificate and such Certificates shall be delivered by the
Partnership to the applicable holder concurrently with the date of
issuance.
11. Miscellaneous.
(A) Series
A
Preferred Units will not have any designations, preferences, conversion or
other
rights, voting powers, restrictions, limitations as to distributions,
qualifications or terms and conditions of redemption, other than those
specifically set forth herein, in the Partnership Agreement, and as may be
provided under applicable law.
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(B) The
headings of the various subdivisions herein are for convenience only and will
not affect the meaning if interpretation of any of the provisions
herein.
(C) The
preferences, conversion and other rights, voting powers, restrictions,
limitations as to distributions, qualifications and terms and conditions of
redemption of the Series A Preferred Units may be waived, and any of such
provisions of the Series A Preferred Units may be amended, with the approval
of
holders of at least sixty-six and two-thirds percent (66 and 2/3%) of the issued
outstanding Series A Preferred Units, voting as a single class in person or
by
proxy.
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12. Severability
of Provisions.
Whenever possible, each provision hereof shall be interpreted in a manner as
to
be effective and valid under applicable law, but if any provision hereof is
held
to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating or otherwise adversely affecting the remaining provisions hereof.
If a court of competent jurisdiction should determine that a provision hereof
would be valid or enforceable if a period of time were extended or shortened
or
a particular percentage were increased or decreased, the such court may make
such change as shall be necessary to render the provision in question effective
and valid under applicable law.
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