Exhibit 10.101
___________________________________________
CERTIFICATE OF DESIGNATION
OF
SERIES B PREFERRED
OPERATING PARTNERSHIP UNITS
OF
LIMITED PARTNERSHIP INTEREST
OF
XXXX-XXXX REALTY, L.P.
___________________________________________
Series B Preferred Units
A series of 223,124 operating partnership units of Preferred Limited
Partnership Interests, par value $0.001 per unit, of Xxxx-Xxxx Realty, L.P.
(the "Company") shall be created and be designated "Series B Preferred Units"
having the following rights and preferences:
DESIGNATION OF SERIES B PREFERRED UNITS. The rights, preferences,
powers, privileges and restrictions, qualifications and limitations granted
to or imposed upon the Series B Preferred Units (referred to hereinafter
sometimes as the "Designations") shall be as set forth below. The Company
may issue the Series A Preferred Units pursuant to the Certificate of
Designation of even date herewith ("Series A Preferred Units") and, subject
to the limitations set forth below, other additional series of Preferred
Units whose rights, preferences, powers, privileges and restrictions,
qualifications and limitations regarding Distributions (as hereinafter
defined) and/or liquidation that are either subordinate to, or pari passu
with, the Designations of the Series B Preferred Units; Capitalized terms
used and not otherwise defined herein shall have the meanings set forth in
the Company Partnership Agreement, dated as of August 31, 1994, as amended as
of January 16, 1997 and December 11, 1997 (the "Partnership Agreement"). The
Partnership Agreement is on file at the principal place of business of the
Company and copies will be made available on request and without cost to any
unit holder of the Company so requesting.
1. Stated Value. The stated value of the Series B Preferred Units shall
be one thousand dollars ($1,000.00) per unit (the "Stated Value").
2. Distributions.
(a) Subject to Section 2(b) below, commencing from the date of initial
issuance of units of Series B Preferred Units (the "Date of Issuance"),
distributions (the "Distributions") on each unit of Series B Preferred Units
shall be payable in arrears quarterly, in an amount equal to the greater of: (i)
$16.875 or (ii) the quarterly distribution attributable to a unit of Series B
Preferred Units if such unit had been converted into Common Units (as
hereinafter defined), pursuant to Section 4 hereof; provided, however, that the
Distribution to be made on Series B Preferred Units on the Distribution Payment
Date (as defined below) immediately following the Date of Issuance shall be made
on a pro rata basis based upon the number of days during that calendar quarter
preceding that initial Distribution Payment Date that Series B Preferred Units
were held by any holder. The Distributions shall be declared and payable
whenever distributions on the Common Units are declared and paid but no less
frequently than approximately once every three months (a "Distribution Payment
Date"). If on any Distribution Payment Date the Company shall not be lawfully
permitted under Delaware law to pay all or a portion of any such declared
Distributions, the Company shall take such action as may be lawfully permitted
in order to enable the Company to the extent permitted by Delaware law, lawfully
to pay such Distributions. Distributions shall be cumulative from the Date of
Issuance, whether or not in any Distribution period such Distribution shall be
declared or there shall be funds of the Company legally available for payment of
such Distributions. No Distributions shall be declared or paid on any class of
Common Units or any other class or series of Preferred Units, other than
Distributions declared and paid on the Series A Preferred Units and, subject to
the limitations set forth in Section 6(b)(ii), such series of Preferred Units
which, by the terms of such series Certificate of Designation, have rights,
preferences, powers, privileges and restrictions, qualifications and limitations
that are pari passu with the Series B Preferred Units (such Preferred Units
hereinafter referred to as "Qualifying Preferred Units"), until all
Distributions, if any, due and legally payable on the Series B Preferred Units
have been paid to the holders of such units. The record date for the payment of
Distributions on the Series B Preferred Units shall be the day immediately prior
to each such Distribution Payment Date.
(b) For purposes of this Certificate of Designation "Business Day" shall
mean any day, excluding Saturday, Sunday and any other day on which commercial
banks in New York are authorized or required by law to close.
3. Liquidation. The Series B Preferred Units shall be preferred as to
assets over any class of Common Units or other class of preferred units of
the Company, other than Qualifying Preferred Units, such that in the event of
the voluntary or involuntary liquidation, dissolution or winding up of the
Company, the holders of the Series B Preferred Units shall be entitled to
have set apart for them, or to be paid out of the assets of the Company,
before any distribution is made to or set apart for the holders of the Common
Units or other series of preferred units or any other capital interest
heretofore or hereafter issued, other than Qualifying Preferred Units, an
amount in cash equal to the Stated Value per unit plus any "Accrued
Distributions" (as defined below) as of such date of payment. "Accrued
Distributions" shall mean, as of any date of determination, an amount equal
to the amount of Distributions, determined at the rate fixed for the payment
of distributions on the Series B Preferred Units on such date as provided in
Section 2 hereof which would be paid on the Series B Preferred Units for the
period of time elapsed from the most recent
2
actual Distribution Payment Date to the date of determination; provided,
however, Accrued Distributions shall not include any amounts applicable to
any time period from the last regular Distribution Payment Date to the date
of determination unless the date of determination is a Distribution Payment
Date. If the assets or surplus funds to be distributed to the holders of the
Series B Preferred Units are insufficient to permit the payment to such
holders of their full preferential amount, the assets and surplus funds
legally available for distribution shall be distributed ratably among the
holders of the Series B Preferred Units in proportion to the full
preferential amount each such holder is otherwise entitled to receive.
4. Conversion of Series B Preferred Units.
The holders of Series B Preferred Units shall have the following conversion
rights:
(i) Optional Right to Convert. Each share of Series B
Preferred Units shall be convertible, at any time (with such date being
referred to as the "Conversion Date") and at the Conversion Price set forth
below, into fully paid and nonassessable of common units of limited partner
interests of the Company ("Common Units"), at the option of the holder as set
forth below ("Optional Conversion").
(ii) Mechanics of Conversion. Each holder of Series B
Preferred Units who desires to convert the same into shares of Common Units
shall provide notice to the Company in the form of the Notice of Conversion
attached to this Certificate of Designation agreement pursuant to which the
Series B Preferred Units were issued (a "Conversion Notice") via telecopy,
hand delivery or other mail or messenger service. The original Conversion
Notice and the certificate or certificates representing the Series B
Preferred Units for which conversion is elected, shall be delivered to the
Company by nationally recognized courier, duly endorsed. The date upon which
a Conversion Notice is initially received by the Company shall be a "Notice
Date."
The Company shall use all reasonable efforts to issue and deliver within
three (3) Business Days after the Notice Date, to such holder of Series B
Preferred Units at the address of the holder on the books of the Company, (i)
a certificate or certificates for the number of Common Units to which the
holder shall be entitled as set forth herein, and (ii) if the Series B
Preferred Units represented by this certificate have been converted only in
part, a new certificate evidencing the Series B Preferred Units not subject
to the conversion; provided that the original certificates representing the
Series B Preferred Units to be converted are received by the transfer agent
or the Company within three Business Days after the Notice Date and the
person or persons entitled to receive the Common Units issuable upon such
conversion shall be treated for all purposes as the record holder or holders
of such shares of Common Units on such date such original certificates are
received. If the original certificates representing the Series B Preferred
Units to be converted are not received by the transfer agent or the Company
within three Business Days after the Notice Date, the Conversion Notice shall
become null and void.
3
(iii) Conversion Price. Each unit of Series B Preferred
Units shall be convertible into a number of Common Units or fraction of Common
Units obtained pursuant to the following formula (the "Conversion Formula"):
Redemption Price
------------------
Conversion Price
where:
Redemption for each unit of Series B Preferred Units for which
Price = conversion is being elected, such unit's Stated
Value, plus any Accrued Distributions;
Conversion
Price = $34.65
(iv) Mandatory Conversion. At any time following the seven
year six month anniversary of the date hereof (the "Mandatory Conversion
Period"), the Company may cause the conversion (a "Mandatory Conversion") of
the Series B Preferred Units outstanding during the Mandatory Conversion
Period into Common Units pursuant to the Conversion Formula, as set forth
above; provided, however, that no such Mandatory Conversion may occur unless
for any twenty (20) trading day period, within the thirty (30) consecutive
trading day period immediately preceding the Mandatory Conversion Date (as
hereinafter defined), the closing price of Common Stock (as hereinafter
defined), as reported daily in the Wall Street Journal, equals or exceeds
$34.65 (subject to adjustment pursuant to Subsection (vii) below) for each
such day; provided, further, that no Mandatory Conversion may be effective
with a Mandatory Conversion Date during the time between the record date for
Distributions and the Distribution Payment Date for such record date.
To effect a Mandatory Conversion, the Company shall issue to each holder
of record a notice stating that the Company is effecting a Mandatory
Conversion with regard to the Series B Preferred Units. Such notice shall
contain a statement indicating the number of units of Series B Preferred
Units subject to the Mandatory Conversion, and if less than all outstanding
Series B Preferred Units are being so converted, the percentage of units of
Series B Preferred Units held by each holder subject to the Mandatory
Conversion. Unless otherwise agreed to by the holders of Series B Preferred
Units and the Company, any such Mandatory Conversion shall be exercised by
the Company on a pro rata basis among all holders of Series B Preferred Units
and all holders of Series A Preferred Units. On the Mandatory Conversion
Date, the certificates representing each of the Series B Preferred Units
outstanding shall automatically, with no further action required by any
holder or the Company, represent the number of Common Units of such holder,
and such Series B Preferred Units remaining if less than all outstanding
units of Series B Preferred Units were so converted, for which each Series B
Preferred Unit was converted in accordance with this Section 4(iv). As
promptly as practicable after the Mandatory Conversion Date, the Company
shall issue and shall deliver to the holders of Series B Preferred Units
subject to the Mandatory Conversion (i) a certificate representing the number
of Common Units to which
4
the Series B Preferred Units were converted in accordance with the provisions
of this Section 4(v) and (ii) if less than all outstanding Series B Preferred
Units were so converted, upon submission to the Company of the certificate or
certificates representing the Series B Preferred Units held by such holder
immediately prior to the Mandatory Conversion, a new certificate evidencing
the Series B Preferred Units held by such holder immediately following the
Mandatory Conversion (until such time as such certificate or certificates are
submitted to the Company, the certificate or certificates representing the
Series B Preferred Units held by a holder immediately prior to the Mandatory
Conversion shall be deemed to represent the number of Series B Preferred
Units held by such holder immediately following the Mandatory Conversion).
Such conversion shall be deemed to have been effected on the opening of
business on the date the notice was sent by the Company to the holders of
record of Series B Preferred Units (the "Mandatory Conversion Date"), and at
such time the rights of the holder as holder of the converted Series B
Preferred Units shall cease and the person or persons in whose name or names
any certificate or certificates for Common Units shall be issuable upon such
Mandatory Conversion shall be deemed to have become the holder or holders of
record of the Common Units represented thereby.
(v) Reservation of Common Units Issuable Upon Conversion.
The Company shall at all times reserve and keep available out of its
authorized but unissued units of Common Units, solely for the purpose of
effecting the conversion of the Series B Preferred Units, such number of its
units of Common Units as shall from time to time be sufficient to effect the
conversion of all then outstanding Series B Preferred Units; and if at any
time the number of authorized but unissued units of Common Units shall not be
sufficient to effect the conversion of all then outstanding Series B
Preferred Units, the Company will take such action as may be necessary to
increase its authorized but unissued units of Common Units to such number of
units as shall be sufficient for such purpose.
(vi) Adjustment to Conversion Price.
(a) If, prior to the conversion of all shares of
Series B Preferred Units, the number of outstanding units of Common Units is
increased by a unit split or other similar event, the Conversion Price shall
be proportionately reduced, or if the number of outstanding Common Units is
decreased by a combination or reclassification of units, or other similar
event, the Conversion Price shall be proportionately increased.
(b) If prior to the conversion of all shares of Series
B Preferred Units, there shall be any merger, consolidation, exchange of
units, recapitalization, reorganization, or other similar event, as a result
of which Common Units of the Company shall be changed into the same or a
different number of securities of the same or another class or classes of
units or securities of the Company or another entity, then the holders of
Series B Preferred Units shall thereafter have the right to purchase and
receive upon conversion of units of Series B Preferred Units, upon the basis
and upon the terms and conditions specified herein and in lieu of the Common
Units immediately theretofore issuable upon conversion, such units and/or
securities as may be issued or payable with respect to or in exchange for the
number of Common Units immediately theretofore purchasable and receivable
upon the conversion of units
5
of Series B Preferred Units held by such holders had such merger,
consolidation, exchange of shares, recapitalization or reorganization not
taken place, and in any such case appropriate provisions shall be made with
respect to the rights and interest of the holders of the Series B Preferred
Units to the end that the provisions hereof (including, without limitation,
provisions for adjustment of the Conversion Price and of the number of Common
Units issuable upon conversion of the Series B Preferred Units) shall
thereafter be applicable, as nearly as may be practicable in relation to any
units or securities thereafter deliverable upon the exercise hereof. The
Company shall not effect any transaction described in this subsection unless
the resulting successor or acquiring entity (if not the Company) assumes by
written instrument the obligation to deliver to the holders of the Series B
Preferred Units such units and/or securities as, in accordance with the
foregoing provisions, the holders of the Series B Preferred Units may be
entitled to receive upon conversion thereof.
(c) If any adjustment under this subsection would
create a fractional unit of Common Units or a right to acquire a fractional
unit of Common Units, such fractional units shall be issued.
D. Status of Converted Units. In the event any Series B
Preferred Units shall be converted as contemplated by this Certificate of
Designation, the units so converted shall be canceled, and shall not be
issuable by the Company as Series B Preferred Units.
E. Distributions on Converted Units. All distributions to be
made with respect to Common Units received pursuant to an Optional Conversion
of Series B Preferred Units or a Mandatory Conversion of Series B Preferred
Units shall be determined as if the Common Units were received on the first
Business Day following the date of the last regular distribution made with
respect to the Common Units (i.e. the holders of the Common Units received
upon conversion shall be entitled to the full quarterly distribution with
respect to such Common Units); provided, however, that in the case of a
Mandatory Conversion, if such Mandatory Conversion occurs on a date other
than a Distribution Payment Date, on the Distribution Payment Date
immediately following the Mandatory Conversion, the holder of Common Units
received pursuant to such Mandatory Conversion shall receive a distribution
equal to the greater of (i) the distribution to be received by holders of
Common Units on such date (the "Common Unit Distribution") and (ii) the sum
of (A) the Distribution multiplied by the quotient obtained by dividing (1)
the number of days elapsed between the previous Distribution Payment Date and
the Mandatory Conversion Date by (2) the total number of days elapsed between
the previous Distribution Payment Date and the then current Distribution
Payment Date (the "Total Conversion Period Days") and (B) the Common Unit
Distribution multiplied by the quotient obtained by dividing (1) the number
of days elapsed between the Mandatory Conversion Date and the then current
Distribution Payment Date by (2) the Total Conversion Period Days.
5. No Reissuance. Any shares of Series B Preferred Units exchanged,
redeemed, purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof.
6
6. Voting Rights. (a) Except as otherwise specifically provided by the
Revised Uniform Limited Partnership Act of the State of Delaware or as otherwise
provided herein, the holders of Series B Preferred Units shall be entitled to
vote on any matters required or permitted to be submitted to the holders of
Common Units for their approval, and such holders of Series B Preferred Units
and holders of Common Units shall vote as a single class with the holders of
Series B Preferred Units having the number of votes to which they would be
entitled if the Series B Preferred Units were converted into Common Units, in
accordance with the Conversion Formula.
(b) The Company shall not, without the affirmative consent of the
holders of at least sixty-six and two-thirds percent (66-2/3%) of then
outstanding units of the Series B Preferred Units:
(i) increase or decrease (other than by conversion) the total
number of authorized shares of Series B Preferred Units;
(ii) in any manner authorize, create or issue any additional
preferred units or any class or series of capital interests, in either case (A)
ranking, either as to payment of distributions or distribution of assets, equal
or prior to, the Series B Preferred Units or (B) which in any manner adversely
affects the holders of units of Series B Preferred Units, or authorize, create
or issue any capital interests of any class or series or any bonds, debentures,
notes or other obligations convertible into or exchangeable for, or having
optional rights to purchase, any capital interests having any such preference or
priority or so adversely affecting the holders of Series B Preferred Units;
provided, however, that the affirmative consent of the holders of at least
sixty-six and two-thirds percent (66-2/3%) of the outstanding units of the
Series B Preferred Units shall not be required for issuances of Qualifying
Preferred Units in an aggregate amount of less than the greater of (1)
$200,000,000 in stated value and (2) ten percent (10%) of the sum of (A) the
product obtained by multiplying (x) the average trading price of Common Stock
(as reported daily in the Wall Street Journal) for the five (5) trading days
immediately preceding the date of issuance of such Qualifying Preferred Stock,
times (y) the total number of the then issued and outstanding Common Units and
shares of Common Stock, including all Common Units and shares of Common Stock
underlying all outstanding preferred stock, preferred units and convertible
debt, which by their respective terms are convertible into either Common Units
or Common Stock and (B) the aggregate value of the liquidation preference
underlying any then outstanding shares of preferred stock of MC Corp. (as
hereinafter defined) which, by the terms of such preferred stock, are not
convertible into Common Stock, Common Units, or any security which is ultimately
convertible into Common Stock or Common Units;
(iii) in any manner alter or change the designations or the
powers, preferences or rights, or the qualifications, limitations or
restrictions of the Series B Preferred Units; and
(iv) reclassify the Common Units or any other units of any class
or series of capital interests hereafter created junior to the Series B
Preferred Units into capitalization of any class or series of capital interests
(A) ranking, either as to payment of
7
dividends or distribution of assets equal or prior to the Series B Preferred
Units, or (B) which in any manner adversely affects the holders of Series B
Preferred Units.
7. Notice of Certain Events. If at any time, to the extent permitted
hereunder the Company and/or Xxxx-Xxxx Realty Corporation, a Maryland
corporation ("MC Corp.") proposes:
(a) to pay any distribution or dividend payable in securities (of
any class or classes) or any obligations, stock or units convertible into
or exchangeable for Common Units or the common stock of MC Corp., par
value $.01 per share ("Common Stock") upon either of their capital
securities, including without limitation (i) Common Units or Common Stock
or (ii) a cash distribution other than its customary quarterly cash
distribution (collectively, an "Extraordinary Distribution");
(b) to grant to the holders of its Common Units or Common Stock
generally any rights or warrants (excluding any warrants or other rights
granted to any employee, director, officer, contractor or consultant of
the Company or MC Corp. pursuant to any plan approved by the general
partner of the Company or the Board of Directors of the MC Corp.) (a
"Rights Distribution");
(c) to effect any capital reorganization or reclassification of
capital securities of the Company or MC Corp.;
(d) to consolidate with, or merge into, any other company or to
transfer its property as an entirety or substantially as an entirety; or
(e) to effect the liquidation, dissolution or winding up of the
Company or MC Corp.,
then, in any one or more of the foregoing cases, the Company shall give, by
certified or registered mail, postage prepaid, addressed to the holders of
Series B Preferred Units at the address of such holders as shown on the record
books of the Company, (i) at least thirty (30) days' prior written notice of the
date on which the books of the Company shall close or of a record date fixed for
such dividend, distribution or subscription rights or for determining rights to
vote in respect of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up, and (ii) in the case of
any such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up, at least thirty (30) days' prior written
notice of the date when the same shall take place. Any notice given in
accordance with the foregoing clause (i) shall also specify, in the case of any
such dividend, distribution or option rights, the date on which the holders of
any class of capital securities shall be entitled thereto.
8. Payment of Extraordinary Distributions. For purposes of payment of
Extraordinary Distributions and/or Rights Distributions on capital securities
of the Company only, upon the declaration of such Extraordinary Distribution
and/ or Rights Distribution to holders of Common Units, Series B Preferred
Units shall receive such Extraordinary Distribution
8
and/or Rights Distribution as if they had been converted to Common Units,
pursuant to the Conversion Formula, as of the record date for receipt of such
Extraordinary Distribution and/ or Rights Distribution.
9. Rank and Limitations of Preferred Units. All units of Series B
Preferred Units shall rank equally with each other unit of Series B Preferred
Units and shall be identical in all respects.
10. Xxxxxxx with Xxxx-Xxxx Realty Corporation Hereunder. The Company
joins in the covenant of the MC Corp. set forth below.
December 11, 1997 XXXX-XXXX REALTY, L.P.
By: Xxxx-Xxxx Realty Corporation,
its General Partner
By: _____________________
Name:
Title:
So long as any Series B Preferred Units are outstanding, the
undersigned agrees to (i) maintain the one-to-one equivalence of a share of
Common Stock and a Common Unit and (ii) not issue any capital stock which would
cause any capital interest in the Partnership to be equal or senior to the
Series B Preferred Units, except as set forth in Section 6(b)(ii) herein.
December 11, 1997 XXXX-XXXX REALTY CORPORATION
By: ______________________
Name:
Title:
9
