EXHIBIT 10.3
XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P.
SECOND AMENDMENT TO THE SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P. ESTABLISHING THE
SERIES B CUMULATIVE REDEEMABLE PERPETUAL PREFERRED UNITS OF PARTNERSHIP INTEREST
AND FIXING DISTRIBUTION AND OTHER PREFERENCES AND RIGHTS OF SUCH UNITS
RECITALS
A. Pursuant to Section 4.02 and Article XI of the Second Amended and
Restated Agreement of Limited Partnership, as amended (as so amended, the
"AGREEMENT"), of Xxxxxxxx Properties Acquisition Partners, L.P. (the
"PARTNERSHIP"), Xxxxxxxx Properties I, Inc. as the sole general partner of the
Partnership (the "GENERAL PARTNER"), desires to amend the Agreement to establish
a series of preferred units of partnership interest in the Partnership
designated as the Series B Cumulative Redeemable Perpetual Preferred Units (the
"SERIES B PREFERRED UNITS") with economic interests as set forth in this
Amendment.
NOW, THEREFORE, the General Partner hereby adopts the following
amendment to the Agreement.
Section 4.02 is amended by adding Section 4.02(e), as follows:
(e) Series B Cumulative Redeemable Perpetual Preferred Units of
Partnership Interest.
SECTION 1. DEFINITIONS. For purposes of the Series B Preferred
Units, the following terms shall have the meanings indicated:
"COMMON UNITS" shall mean all the units of the Partnership that are
not specifically designated as preferred units pursuant to Section 4.02.
"PARITY PREFERRED UNITS" shall be used to refer to any class or series
of Partnership Interests of the Partnership now or hereafter authorized, issued
or outstanding expressly designated by the Partnership to rank on a parity with
Series B Preferred Units with respect to distributions or rights upon voluntary
or involuntary liquidation, winding-up or dissolution of the Partnership, or
both, as the context may require, and includes the Series A Cumulative
Convertible Redeemable Preferred Units of Partnership Interest of the
Partnership.
"PTP" shall mean a "publicly traded partnership" within the meaning of
Section 7704 of the Code.
The definitions of "PROFIT" and "LOSS" in the Agreement shall be
modified as follows:
Solely for purposes of allocating Profit or Loss in any fiscal
year of the Partnership to the holders of the Series B Preferred Units,
items of Profit and Loss, as the case may be, shall not include
depreciation with respect to properties that are "ceiling limited" in
respect of the holders of the Series B Preferred Units. For purposes of
the preceding sentence, Partnership property shall be considered ceiling
limited in respect of a holder of Series B Preferred Units if depreciation
attributable to such Partnership property which would otherwise be
allocable to such Partner, without regard to this paragraph, exceeded
depreciation determined for federal income tax purposes attributable to
such Partnership property which would otherwise be allocated to such
Partner by more than 5%.
SECTION 2. DESIGNATION AND NUMBER. A series of preferred units of
partnership interest in the Partnership designated as the "8.30% Series B
Cumulative Redeemable Perpetual Preferred Units" (the "SERIES B PREFERRED
UNITS") is hereby established. The number of Series B Preferred Units shall be
1,900,000, which number may be decreased (but not below the aggregate number
thereof then outstanding and/or which have been reserved for issuance) from time
to time by the General Partner.
SECTION 3. DISTRIBUTIONS. (a) Payment of Distributions. Subject
to the rights of holders of Parity Preferred Units as to the payment of
distributions and holders of preferred units ranking senior to the Series B
Preferred Units issued after the date hereof in accordance herewith as to
payment of distributions, holders of Series B Preferred Units shall be entitled
to receive, when, as and if declared by the Partnership acting through the
General Partner, out of funds legally available for the payment of
distributions, cumulative preferential cash distributions at the rate per annum
of 8.30% of the original Capital Contribution per Series B Preferred Unit. Such
distributions shall be cumulative and shall accrue from the first day of the
applicable Distribution Period (as defined herein), and will be payable (A)
quarterly in arrears, not later than the third calendar day after the end of the
applicable Distribution Period and, (B), in the event of (i) an exchange of
Series B Preferred Units into Series B Preferred Shares, or (ii) a redemption of
Series B Preferred Units, on the exchange date or redemption date, as applicable
(each a "PREFERRED UNIT DISTRIBUTION PAYMENT DATE"). For purposes of this
Amendment, the term "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
Distribution Period with respect to any Series B Preferred Units (other than the
initial Distribution Period, which shall commence on the original date of
issuance for such Series B Preferred Units and end on and include the last day
of the calendar quarter immediately following the original date of issuance, and
other than the Distribution Period during which any Series B Preferred Units
shall be redeemed or exchanged, which shall end on and include the date of such
redemption or exchange). The amount of the distribution payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months and for
any period shorter than a full quarterly period for which distributions are
computed, the amount of the distribution payable will be computed on the basis
of the actual number of days elapsed in such a 30-day month. If any date on
which distributions are to be made on the Series B Preferred Units is not a
Business Day (as defined herein), then payment of the distribution to be made on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other
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payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. Distributions on the Series B Preferred Units will be made to the
holders of record of the Series B Preferred Units on July 1, 1998 and thereafter
on the relevant record dates to be fixed by the Partnership acting through the
General Partner, which record dates shall in no event exceed fifteen (15)
Business Days prior to the relevant Preferred Unit Distribution Payment Date
(the "PREFERRED UNIT PARTNERSHIP RECORD DATE").
The term "BUSINESS DAY" shall mean each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulation or executive order to close.
(b) Distributions Cumulative. Distributions on the Series B Preferred
Units will accrue and accumulate as of each Preferred Unit Distribution Payment
Date whether or not the terms and provisions of any agreement of the
Partnership, including any agreement relating to its indebtedness at any time
prohibit the current payment of distributions, whether or not the Partnership
has earnings, whether or not there are funds legally available for the payment
of such distributions and whether or not such distributions are authorized.
Distributions on account of arrears for any past Distribution Periods may be
declared and paid at any time, without reference to a regular Preferred Unit
Distribution Payment Date to holders of record of the Series B Preferred Units
on the record date fixed by the Partnership acting through the General Partner
which date shall not exceed fifteen (15) Business Days prior to the payment
date. Accumulated and unpaid distributions will not bear interest.
(c) Priority as to Distributions. (i) So long as any Series B Preferred
Units are outstanding, no distribution of cash or other property shall be
authorized, declared, paid or set apart for payment on or with respect to any
class or series of Partnership Interest of the Partnership ranking junior as to
the payment of distributions to the Series B Preferred Units (collectively,
"JUNIOR UNITS"), nor shall any cash or other property be set aside for or
applied to the purchase, redemption or other acquisition for consideration of
any Series B Preferred Units, any Parity Preferred Units with respect to
distributions or any Junior Units, unless, in each case, all distributions
accumulated on all Series B Preferred Units and all classes and series of
outstanding Parity Preferred Units as to payment of distributions have been paid
in full. The foregoing sentence will not prohibit (a) distributions payable
solely in Junior Units, (b) the conversion of Junior Units or Parity Preferred
Units into Partnership Interests of the Partnership ranking junior to the Series
B Preferred Units as to distributions, (c) the redemption of Partnership
Interests corresponding to any Series B Preferred Shares, Parity Preferred
Shares with respect to distributions or Junior Shares to be purchased by
Xxxxxxxx Properties Trust (the "TRUST") pursuant to Article VII of the Amended
and Restated Declaration of Trust of the Trust (the "DECLARATION") to preserve
the Trust's status as a real estate investment trust, provided that such
redemption shall be upon the same terms as the corresponding purchase pursuant
to Article VII of the Declaration, or (d) the purchase, redemption or other
acquisition of Common Units made for the purpose of an employee incentive or
benefit plan of the Partnership or any subsidiary.
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(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series B Preferred Units, all distributions authorized and
declared on the Series B Preferred Units and all classes or series of
outstanding Parity Preferred Units with respect to distributions shall be
authorized and declared so that the amount of distributions authorized and
declared per Series B Preferred Unit and such other classes or series of Parity
Preferred Units shall in all cases bear to each other the same ratio that
accrued distributions per Series B Preferred Unit and such other classes or
series of Parity Preferred Units (which shall not include any accumulation in
respect of unpaid distributions for prior distribution periods if such class or
series of Parity Preferred Units do not have cumulative distribution rights)
bear to each other.
(d) No Further Rights. Holders of Series B Preferred Units shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
(e) No distributions on Series B 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
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. Nothing in this subsection (e)
shall be deemed to modify or affect in any manner the accrual provisions set
forth in Section 3(b) or the distribution priorities set forth in Section 3(c).
(f) In the event of any conflict between the provisions of this Section 3
and the provisions of Section 5.02(a) of the Agreement, the provisions of this
Section 3 shall control.
SECTION 4. LIQUIDATION PROCEEDS. (a) Subject to the rights of
holders of Parity Preferred Units with respect to rights upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership and
subject to preferred units ranking senior to the Series B Preferred Units with
respect to rights upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Partnership, the holders of Series B Preferred Units shall be
entitled to receive out of the assets of the Partnership legally available for
distribution or the proceeds thereof, after payment or provision for debts and
other liabilities of the Partnership, but before any payment or distributions of
the assets shall be made to holders of Common Units or any other class or series
of Partnership Interests of the Partnership that ranks junior to the Series B
Preferred Units as to rights upon liquidation, dissolution or winding-up of the
Partnership, an amount equal to the sum of (i) a liquidation preference in an
amount equal to the positive Capital Account balance of the holder of the Series
B Preferred Units, determined after taking into account all Capital Account
adjustments for the Partnership taxable year during which the liquidation occurs
(other than those made as a result of the liquidating distribution set forth in
this Section 4) and (ii) an amount equal to any accumulated and unpaid
distributions thereon, whether or not declared, to the date of payment to the
extent such distributions are not reflected in the Capital Account balance as of
the date of payment. In the event that, upon such voluntary or
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involuntary liquidation, dissolution or winding-up, there are insufficient
assets to permit full payment of liquidating distributions to the holders of
Series B Preferred Units and any Parity Preferred Units as to rights upon
liquidation, dissolution or winding-up of the Partnership, all payments of
liquidating distributions on the Series B Preferred Units and such Parity
Preferred Units shall be made so that the payments on the Series B Preferred
Units and such Parity Preferred Units shall in all cases bear to each other the
same ratio that the respective rights of the Series B Preferred Units and such
other Parity Preferred Units (which shall not include any accumulation in
respect of unpaid distributions for prior distribution periods if such Parity
Preferred Units do not have cumulative distribution rights) upon liquidation,
dissolution or winding-up of the Partnership bear to each other. In the event of
any conflict between the provisions of this Section 4 and the provisions of
Section 5.06 of the Agreement, the provisions of this Section 4 shall control.
(b) Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, stating the payment
date or dates when, and the place or places where, the amounts distributable in
such circumstances shall be payable, shall be given by (i) fax (if the holder of
the Series B Preferred Units shall have provided the Partnership with such
holder's fax number) and (ii) first class mail, postage pre-paid, not less than
30 and not more that 60 days prior to the payment date stated therein, to each
record holder of the Series B Preferred Units at the respective addresses of
such holders as the same shall appear on the transfer records of the
Partnership.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series B Preferred
Units will have no right or claim to any of the remaining assets of the
Partnership.
(d) Consolidation, Merger or Certain Other Transactions. The voluntary
sale, conveyance, lease, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Partnership to, or the consolidation or merger or other
business combination of the Partnership with or into, any corporation, trust or
other entity (or of any corporation, trust or other entity with or into the
Partnership) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Partnership.
SECTION 5. OPTIONAL REDEMPTION. (a) Right of Optional Redemption.
The Series B Preferred Units may not be redeemed prior to the fifth anniversary
of the issuance date. On or after such date, the Partnership shall have the
right to redeem the Series B Preferred Units, in whole or in part, at any time
or from time to time out of funds legally available therefor, upon not less than
30 nor more than 60 days' written notice, at a redemption price, payable in
cash, equal to the Capital Account balance (or, if not redeemed in full, the
applicable portion thereof) of the holder of the Series B Preferred Units (the
"REDEMPTION PRICE"); provided, however, that no redemption pursuant to this
Section 5 will be permitted if the Redemption Price does not equal or exceed the
original Capital Contribution (or, if not redeemed in full, the applicable
portion thereof) per unit of Series B Preferred Units, plus accumulated and
unpaid distributions, whether or not declared, to the date of redemption to the
extent such distributions are not reflected in the
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Capital Account balance as of the date of redemption. If fewer than all of the
outstanding Series B Preferred Units are to be redeemed, the Series B Preferred
Units to be redeemed shall be selected pro rata (as nearly as practicable
without creating fractional units).
(b) Limitation on Redemption. (i) The Redemption Price of the Series B
Preferred Units (other than the portion thereof consisting of accumulated but
unpaid distributions) will be payable solely out of the sale proceeds of capital
stock of the Trust, which will be contributed by the Trust to the Partnership as
additional capital contribution, or out of the sale of limited partner interests
in the Partnership and from no other source. For purposes of the preceding
sentence, "capital stock" means any equity securities (including Common Shares
and Preferred Shares (as such terms are defined in the Declaration)), shares,
participation or other ownership interests (however designated) and any rights
(other than debt securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
(ii) The Partnership may not redeem fewer than all of the outstanding
Series B Preferred Units unless all accumulated and unpaid distributions have
been paid on all Series B Preferred Units for all quarterly Distribution Periods
terminating on or prior to the date of redemption.
(c) Procedures for Redemption. (i) Notice of redemption will be (i) faxed
(if the holder of the Series B Preferred Units shall have provided the
Partnership with such holder's fax number) and (ii) mailed by the Partnership,
by certified mail, postage prepaid, not less than 30 nor more than 60 days prior
to the redemption date, addressed to the respective holders of record of the
Series B Preferred Units at their respective addresses as they appear on the
records of the Partnership. No failure to give or defect in such notice shall
affect the validity of the proceedings for the redemption of any Series B
Preferred Units except as to the holder to whom such notice was defective or not
given. In addition to any information required by law, each such notice shall
state: (i) the redemption date, (ii) the Redemption Price, (iii) the aggregate
number of Series B Preferred Units to be redeemed and if fewer than all of the
outstanding Series B Preferred Units are to be redeemed, the number of Series B
Preferred Units to be redeemed held by such holder, (iv) the place or places
where such Series B Preferred Units are to be surrendered for payment of the
Redemption Price, (v) that distributions on the Series B Preferred Units to be
redeemed will cease to accumulate on such redemption date and (vi) that payment
of the Redemption Price will be made upon presentation and surrender of such
Series B Preferred Units.
(ii) If the Partnership gives a notice of redemption in respect of
Series B Preferred Units (which notice will be irrevocable) then, by 12:00 noon,
New York City time, on the redemption date, the Partnership will deposit
irrevocably in trust for the benefit of the Series B Preferred Units being
redeemed funds sufficient to pay the applicable Redemption Price, plus any
accumulated and unpaid distributions, whether or not declared, if any, on such
units to the date fixed for redemption, without interest, and will give
irrevocable instructions and authority to pay such Redemption Price to the
holders of the Series B Preferred Units upon surrender of the Series B Preferred
Units by such holders at the place designated in the notice of redemption. If
the Series B Preferred Units are evidenced by a certificate and if fewer than
all Series B Preferred Units evidenced by any certificate are being redeemed, a
new certificate shall be issued upon
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surrender of the certificate evidencing all Series B Preferred Units, evidencing
the unredeemed Series B Preferred Units without cost to the holder thereof. On
and after the date of redemption, distributions will cease to accumulate on the
Series B Preferred Units or portions thereof called for redemption, unless the
Partnership defaults in the payment thereof, such units will no longer be deemed
outstanding, and all rights of the holders thereof as holders of Series B
Preferred Units will cease (except the right to receive the Redemption Price and
any accrued and unpaid distributions upon surrender and endorsement of the
certificates evidencing the Series B Preferred Units, if any). If any date fixed
for redemption of Series B Preferred Units is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next succeeding
day that is a Business Bay (and without any interest or other payment in respect
of any such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price is improperly withheld or refused
and not paid by the Partnership, distributions on such Series B Preferred Units
will continue to accumulate from the original redemption date to the date of
payment, in which case the actual payment date will be considered the date fixed
for redemption for purposes of calculating the applicable Redemption Price.
SECTION 6. VOTING RIGHTS. (a) General. Holders of the Series B
Preferred Units will not have any voting rights or right to consent to any
matter requiring the consent or approval of the Limited Partners, except as set
forth below.
(b) Certain Voting Rights. So long as any Series B Preferred Units
remains outstanding, the Partnership shall not, without the affirmative vote of
the holders of at least two-thirds of the Series B Preferred Units outstanding
at the time, (i) authorize or create, or increase the authorized or issued
amount of, any class or series of Partnership Interests ranking prior to the
Series B Preferred Units with respect to payment of distributions or rights upon
liquidation, dissolution or winding-up or reclassify any Partnership Interests
of the Partnership into any such Partnership Interest, or create, authorize or
issue any obligations or security convertible into or evidencing the right to
purchase any such Partnership Interests, (ii) create in favor of or issue to an
affiliate of the Partnership any Parity Preferred Units or reclassify any
Partnership Interest of the Partnership held by an affiliate of the Partnership
into any such Partnership Interest or create, authorize or issue in favor of or
to any affiliate of the Partnership any obligations or security convertible into
or evidencing the right to purchase any Parity Preferred Units, other than to
the Trust to the extent the issuance of such interests was to allow the Trust to
issue corresponding preferred shares to persons who are not affiliates of the
Partnership or (iii) either (A) consolidate, merge into or with, or convey,
transfer or lease its assets substantially as an entirety to, any corporation or
other entity or (B) amend, alter or repeal the provisions of the Agreement or
this Amendment, whether by merger, consolidation or otherwise, that would
materially and adversely affect the powers, special rights, preferences,
privileges or voting power of the Series B Preferred Units or the holders
thereof; provided, however, that with respect to the occurrence of a merger,
consolidation or a sale or lease of all of the Partnership's assets as an
entirety, so long as (a) the Partnership is the surviving entity and the Series
B Preferred Units remain outstanding without a change to the terms thereof, or
(b) the resulting, surviving or transferee entity is a partnership, limited
liability company or other pass-through entity organized under the laws of any
state and
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substitutes the Series B Preferred Units for other interests in such entity
having substantially the same terms and rights as the Series B Preferred Units,
including with respect to distributions, voting rights and rights upon
liquidation, dissolution or winding-up, then the occurrence of any such event
shall not be deemed to materially and adversely affect such rights, preferences,
privileges or voting powers of the Series B Preferred Units and the holders
thereof, and provided further that any increase in the amount of Partnership
Interests or the creation or issuance of any other class or series of
Partnership Interests, in each case ranking (a) junior to the Series B Preferred
Units with respect to payment of distributions and the distribution of assets
upon liquidation, dissolution or winding-up, or (b) on a parity to the Series B
Preferred Units with respect to payment of distributions and the distribution of
assets upon liquidation, dissolution or winding-up, to the extent such
Partnership Interests are not issued to an affiliate of the Partnership, other
than the Trust to the extent the issuance of such interests was to allow the
Trust to issue corresponding preferred shares to persons who are not affiliates
of the Partnership, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
SECTION 7. TRANSFER RESTRICTIONS. The Series B Preferred Units shall
be subject to the provisions of Article IX of the Partnership Agreement.
SECTION 8. EXCHANGE RIGHTS. (a) Right to Exchange. (i) Series B
Preferred Units will be exchangeable in whole or in part at anytime on or after
the tenth anniversary of the date of issuance, at the option of the holders
thereof, for authorized but previously unissued shares of 8.30% Series B
Cumulative Redeemable Preferred Shares of the Trust (the "SERIES B PREFERRED
SHARES") at an exchange rate of one share of Series B Preferred Shares for one
Series B Preferred Unit, subject to adjustment as described below (the "EXCHANGE
PRICE"), provided that the Series B Preferred Units will become exchangeable at
any time, in whole or in part, at the option of the holders of Series B
Preferred Units for Series B Preferred Shares if (y) at any time full
distributions shall not have been timely made on any Series B Preferred Unit
with respect to six (6) prior quarterly distribution periods, whether or not
consecutive, provided, however, that a distribution in respect of Series B
Preferred Units shall be considered timely made if made within two (2) Business
Days after the applicable Preferred Unit Distribution Payment Date if at the
time of such late payment there shall not be any prior quarterly distribution
periods in respect of which full distributions were not timely made or (z) upon
receipt by a holder or holders of Series B Preferred Units of (A) notice from
the General Partner that the General Partner or a Subsidiary of the General
Partner has taken the position that the Partnership is, or upon the occurrence
of a defined event in the immediate future will be, a PTP and (B) an opinion
rendered by an outside nationally recognized independent counsel familiar with
such matters addressed to a holder or holders of Series B Preferred Units, that
the Partnership is or likely is, or upon the occurrence of a defined event in
the immediate future will be or likely will be, a PTP. In addition, the Series
B Preferred Units may be exchanged for Series B Preferred Stock, in whole or in
part, at the option of any holder prior to the tenth anniversary of the issuance
date and after the third anniversary thereof if such holder of a Series B
Preferred Units shall deliver to the General Partner either (i) a private ruling
letter addressed to such holder of Series B Preferred Units or (ii) an opinion
of independent counsel reasonably acceptable to the General Partner based on the
enactment of temporary or final Treasury Regulations or the publication of a
Revenue Ruling, in either case to
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the effect that an exchange of the Series B Preferred Units at such earlier time
would not cause the Series B Preferred Units to be considered "stock and
securities" within the meaning of section 351(e) of the Code for purposes of
determining whether the holder of such Series B Preferred Units is an
"investment company" under section 721(b) of the Code if an exchange is
permitted at such earlier date. Furthermore, the Series B Preferred Units may be
exchanged in whole or in part for Series B Preferred Shares at any time after
the date hereof, if both (1) the holder thereof concludes based on results or
projected results that there exists (in the reasonable judgment of the holder)
an imminent and substantial risk that the holder's interest in the Partnership
does or will represent more than 19.5% of the total profits or capital interests
in the Partnership (determined in accordance with Treasury Regulations Section
1.731-2(e)(4)) for a taxable year, and (2) the holder delivers to the General
Partner an opinion of nationally recognized independent counsel to the effect
that there is an imminent and substantial risk that the holder's interest in the
Partnership does or will represent more than 19.5% of the total profits or
capital interests in the Partnership (determined in accordance with Treasury
Regulations Section 1.731-2(e)(4)) for a taxable year.
(ii) Notwithstanding anything to the contrary set forth in SECTION 8(a)(i),
if an Exchange Notice (as defined herein) has been delivered to the General
Partner, then the General Partner may, at its option, elect to redeem or cause
the Partnership to redeem all or a portion of the outstanding Series B Preferred
Units for cash in an amount equal to the original Capital Contribution per
Series B Preferred Unit and all accrued and unpaid distributions thereon to the
date of redemption. The General Partner may exercise its option to redeem the
Series B Preferred Units for cash pursuant to this SECTION 8(a)(ii) by giving
each holder of record of Series B Preferred Units notice of its election to
redeem for cash, within five (5) Business Days after receipt of the Exchange
Notice, by (i) fax (if the holder of the Series B Preferred Units shall have
provided the Partnership with such holder's fax number) and (ii) registered
mail, postage paid, at the address of each holder as it may appear on the
records of the Partnership stating (i) the redemption date, which shall be no
later than sixty (60) days following the receipt of the Exchange Notice, (ii)
the redemption price, (iii) the place or places where the Series B Preferred
Units are to be surrendered for payment of the redemption price, (iv) that
distributions on the Series B Preferred Units will cease to accrue on such
redemption date; (v) that payment of the redemption price will be made upon
presentation and surrender of the Series B Preferred Units and (vi) the
aggregate number of Series B Preferred Units to be redeemed, and if fewer than
all of the outstanding Series B Preferred Units are to be redeemed, the number
of Series B Preferred Units to be redeemed held by such holder, which number
shall equal such holder's pro-rata share (based on the percentage of the
aggregate number of outstanding Series B Preferred Units the total number of
Series B Preferred Units held by such holder represents) of the aggregate number
of Series B Preferred Units being redeemed.
(iii) In the event an exchange of all or a portion of Series B Preferred
Units pursuant to SECTION 8(a)(i) would violate the provisions on ownership
limitation of the Trust set forth in Article VII of the Declaration, the General
Partner shall give written notice thereof to each holder of record of Series B
Preferred Units, within five (5) Business Days following receipt of the Exchange
Notice, by fax (if the holder of the Series B Preferred Units shall have
provided the Partnership with such holder's fax number) and (ii) registered
mail, postage prepaid, at the
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address of each such holder set forth in the records of the Partnership. In such
event, each holder of Series B Preferred Units shall be entitled to exchange,
pursuant to the provision of SECTION 8(b) a number of Series B Preferred Units
which would comply with the provisions on the ownership limitation of the Trust
set forth in such Article VII of the Declaration and any Series B Preferred
Units not so exchanged (the "EXCESS UNITS") shall be redeemed by the Partnership
for cash in an amount equal to the original Capital Contribution per Excess
Unit, plus any accrued and unpaid distributions thereon, whether or not
declared, to the date of redemption. The written notice of the General Partner
shall state (i) the number of Excess Units held by such holder, (ii) the
redemption price of the Excess Units, (iii) the date on which such Excess Units
shall be redeemed, which date shall be no later than sixty (60) days following
the receipt of the Exchange Notice, (iv) the place or places where such Excess
Units are to be surrendered for payment of the redemption price, (v) that
distributions on the Excess Units will cease to accrue on such redemption date,
and (vi) that payment of the redemption price will be made upon presentation and
surrender of such Excess Units. In the event an exchange would result in Excess
Units, as a condition to such exchange, each holder of such units agrees to
provide representations and covenants reasonably requested by the General
Partner relating to (i) the widely held nature of the interests in such holder,
sufficient to assure the General Partner that the holder's ownership of stock of
the Trust (without regard to the limits described above) will not cause any
individual to own in excess of 9.8% of the stock of the Trust; and (ii) to the
extent such holder can so represent and covenant without obtaining information
from its owners, the holder's ownership of tenants of the Partnership and its
affiliates.
(iv) The redemption of Series B Preferred Units described in SECTION
8(a)(ii) and (iii) shall be subject to the provisions of SECTION 5(c)(ii);
provided, however, that for the purposes hereof the term "Redemption Price" in
Section 5(c)(ii) shall be read to mean the original Capital Contribution per
Series B Preferred Unit being redeemed, plus any accumulated and unpaid
distributions, whether or not declared, to the date of redemption to the extent
not otherwise accounted for therein.
(b) Procedure for Exchange. (i) Any exchange shall be exercised pursuant
to a notice of exchange (the "EXCHANGE NOTICE") delivered to the General Partner
by the holder who is exercising such exchange right, by fax (if the holder of
the Series B Preferred Units shall have provided the Partnership with such
holder's fax number) and (ii) certified mail postage prepaid. The exchange of
Series B Preferred Units, or a specified portion thereof, may be effected after
the fifth (5th) Business Days following receipt by the General Partner of the
Exchange Notice by delivering certificates, if any, representing such Series B
Preferred Units to be exchanged together with, if applicable, written notice of
exchange and a proper assignment of such Series B Preferred Units to the office
of the General Partner maintained for such purpose. Currently, such office is
located at 0000 X. Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000. Each
exchange will be deemed to have been effected immediately prior to the close of
business on the date on which such Series B Preferred Units to be exchanged
(together with all required documentation) shall have been surrendered and
notice shall have been received by the General Partner as aforesaid and the
Exchange Price shall have been paid. Any Series B Preferred Shares issued
pursuant to this SECTION 8 shall be delivered as shares which are duly
authorized, validly issued, fully paid and nonassessable, free of pledge, lien,
encumbrance or restriction other than those provided in the
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Declaration, the Bylaws of the Trust, the Securities Act and relevant state
securities or blue sky laws.
(ii) In the event of an exchange of Series B Preferred Units for shares of
Series B Preferred Shares, an amount equal to the accrued and unpaid
distributions, whether or not declared, to the date of exchange on any Series B
Preferred Units tendered for exchange shall (i) accrue on the shares of the
Series B Preferred Shares into which such Series B Preferred Units are
exchanged, and (ii) continue to accrue on such Series B Preferred Units, which
shall remain outstanding following such exchange, with the Trust as the holder
of such Series B Preferred Units. Notwithstanding anything to the contrary set
forth herein, in no event shall a holder of a Series B Preferred Unit that was
validly exchanged into Series B Preferred Shares pursuant to this section (other
than the Trust now holding such Series B Preferred Unit), receive a distribution
out of Available Cash of the Partnership, if such holder, after exchange, is
entitled to receive a distribution out of Available Cash with respect to the
share of Series B Preferred Shares for which such Series B Preferred Unit was
exchanged or redeemed.
(iii) Fractional shares of Series B Preferred Shares are not to be issued
upon exchange but, in lieu thereof, the General Partner will pay a cash
adjustment based upon the fair market value of the Series B Preferred Shares on
the day prior to the exchange date as determined in good faith by the Board of
Trustees of the Trust.
(c) Adjustment of Exchange Price. (i) The Exchange Price is subject to
adjustment upon certain events, including, (i) subdivisions, combinations and
reclassification of the Series B Preferred Shares, and (ii) distributions to all
holders of Series B Preferred Shares of evidences of indebtedness of the Trust
or assets (including securities, but excluding dividends and distributions paid
in cash out of equity applicable to Series B Preferred Shares).
(ii) In case the Trust shall be a party to any transaction
(including, without limitation, a merger, consolidation, statutory share
exchange, tender offer for all or substantially all of the Trust's capital stock
or sale of all or substantially all of the Trust's assets), in each case as a
result of which the Series B Preferred Shares will be converted into the right
to receive shares of capital stock, other securities or other property
(including cash or any combination thereof), each Series B Preferred Unit will
thereafter be exchangeable into the kind and amount of shares of capital stock
and other securities and property receivable (including cash or any combination
thereof) upon the consummation of such transaction by a holder of that number of
shares of Series B Preferred Shares or fraction thereof into which one Series B
Preferred Unit was exchangeable immediately prior to such transaction. The Trust
may not become a party to any such transaction unless the terms thereof are
consistent with the foregoing.
SECTION 9. NO CONVERSION RIGHTS. The holders of the Series B
Preferred Units shall not have any rights to convert such shares into shares of
any other class or series of stock or into any other securities of, or interest
in, the Partnership.
SECTION 10. NO SINKING FUND. No sinking fund shall be established
for the retirement or redemption of Series B Preferred Units.
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SECTION 11. RECORD HOLDERS. The General Partner may deem and treat
the record holder of any Series B Preferred Unit as the true and lawful owner
thereof for all purposes, and the General Partner shall not be affected by any
notice to the contrary.
Section 5.01 is amended by amending and restating in its entirety
Section 5.01(a), as follows:
(a) General.
(1) Profit.
(A) First, 100% to the General Partner and Common Unitholders until
the aggregate amount of Profit allocated under this Section 5.01(a)(1)(A),
shall equal the aggregate amount of Loss allocated to the Partners under
Section 5.01(a)(2)(E);
(B) Second, 100% to the Series A Preferred Unitholder and Series B
Preferred Unitholder in proportion to and to the extent of their respective
excesses of (i) the aggregate amount of Loss allocated to each under
Section 5.01(a)(2)(D) over (ii) the aggregate amount of Profit allocated to
each under this Section 5.01(a)(1)(B);
(C) Third, 100% to the General Partner and the Common Unitholders in
proportion to and to the extent of their respective excesses of (i) the
aggregate amount of Loss allocated to each under Section 5.01(a)(2)(C) over
(ii) the aggregate amount of Profit allocated to each under this Section
5.01(a)(1)(C);
(D) Fourth, 100% proportionately to (i) the Series A Preferred
Unitholder until the aggregate amount of Profit allocated to the Series A
Preferred Unitholder under this Section 5.01(a)(1)(D)(i) shall equal the
Series A Preferred Distribution Amount and (ii) the Series B Preferred
Unitholder until the aggregate amount of Profit allocated to the Series B
Preferred Unitholder under this Section 5.01(a)(1)(D)(ii) shall equal the
Series B Preferred Distribution Amount; and
(E) Fifth, 100% to the General Partner and the Common Unitholders in
accordance with the Percentage Interest of each.
(2) Loss.
(A) First, 100% to the General Partner and the Common Unitholders to
the extent of and in proportion to (i) the aggregate amount of Profit
allocated to each under Section 5.01(a)(1)(E) over (ii) the aggregate
amount of Loss allocated to each under this Section 5.01(a)(2)(A);
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(B) Second 100% proportionately to (i) the Series A Preferred
Unitholder to the extent of the Undistributed Series A Preferred Unit
Distribution Amount and (ii) the Series B Preferred Unitholder to the
extent of the Undistributed Series B Preferred Unit Distribution Amount;
(C) Third, 100% to the General Partner and the Common Unitholders in
proportion to the Percentage Interest of each until the Capital Account
balances of both the General Partner and each Common Unitholder shall equal
zero;
(D) Fourth, 100% to the Series A Preferred Unitholder and Series B
Preferred Unitholder in proportion to the Capital Account balances of each
until the Capital Account balances of both the Series A Preferred
Unitholder and Series B Preferred Unitholder shall equal zero; and
(E) Fifth, 100% to the General Partner and Common Unitholders in
accordance with their Percentage Interests.
(3) Definitions. For purposes of this Section 5.01(a), the following terms
shall have the meanings indicated:
"COMMON UNITHOLDER(S)" means all Persons holding a Limited Partnership
Interest in the Partnership other than the Series A Preferred Unitholder
and the Series B Preferred Unitholder.
"SERIES A PREFERRED UNIT DISTRIBUTION AMOUNT" means the amount
distributable to the Series A Preferred Unitholder as provided in Section 3
of Section 4.02(d) of the First Amendment to the Second Amended and
Restated Agreement of Limited Partnership of the Partnership dated December
29, 1997.
"SERIES A PREFERRED UNITHOLDER" means any Person holding Series A
Preferred Units.
"SERIES A PREFERRED UNITS" means the Series A Cumulative Convertible
Redeemable Preferred Units of Partnership Interest issued pursuant to the
First Amendment to the Second Amended and Restated Agreement of Limited
Partnership of the Partnership dated December 29, 1997.
"SERIES B PREFERRED UNIT DISTRIBUTION AMOUNT" means the amount
distributable to the Series B Unitholder as provided in Section 3 of
Section 4.02(e) of the Second Amendment to the Second Amended and Restated
Agreement of Limited Partnership of the Partnership dated June 25, 1998.
"SERIES B PREFERRED UNITHOLDER" means any Person holding Series B
Preferred Units.
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"SERIES B PREFERRED UNITS" means the Series B Cumulative Redeemable
Perpetual Preferred Units of Partnership Interest issued pursuant to the
Second Amendment to the Second Amended and Restated Agreement of Limited
Partnership of the Partnership dated June 25, 1998.
"UNDISTRIBUTED SERIES A PREFERRED UNIT DISTRIBUTION AMOUNT" means the
excess of (i) the aggregate amount of Profit allocated to the Series A
Unitholder under Section 5.01(a)(1)(D) and (ii) the aggregated amount of
distributions made to the Series A Unitholder under Section 3 of Section
4.02(d) of the First Amendment to the Second Amended and Restated Agreement
of Limited Partnership of the Partnership dated December 29, 1997.
"UNDISTRIBUTED SERIES B PREFERRED UNIT DISTRIBUTION AMOUNT" means the
excess of (i) the aggregate amount of Profit allocated to the Series B
Unitholder under Section 5.01(a)(1)(D) and (ii) the aggregated amount of
distributions made to the Series B Unitholder under Section 3 of Section
4.02(e) of the Second Amendment to the Second Amended and Restated
Agreement of Limited Partnership of the Partnership dated June 25, 1998.
Exhibit A to the Agreement is hereby amended and restated in its
entirety as set forth on Exhibit A attached hereto.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of June 25, 1998.
GENERAL PARTNER:
XXXXXXXX PROPERTIES I, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------
Xxxxxxx X. Xxxxx
Senior Vice President
LIMITED PARTNER:
BELAIR CAPITAL FUND LLC
By: Xxxxx Xxxxx Management, its Manager
By: /s/ XXXXXX XXXX
----------------------------
Xxxxxx Xxxx
Vice President
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ACKNOWLEDGMENT
The Trust referred to in the foregoing Second Amendment to the Second Amended
and Restated Agreement of Limited Partnership of Xxxxxxxx Properties Acquisition
Partners, L.P. hereby acknowledges receipt of a copy thereof and agrees to be
bound thereby and to comply with the terms thereof insofar as such terms are
applicable to the Trust.
XXXXXXXX PROPERTIES TRUST
By: /s/ XXXXXXX X. XXXXX
-----------------------------
Xxxxxxx X. Xxxxx
Senior Vice President
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