Exhibit 4.1
XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P.
First Amendment to the Second Amended and
Restated Agreement of Limited Partnership of
Xxxxxxxx Properties Acquisition Partners, L.P.
Establishing the Series A Cumulative
Convertible Redeemable Preferred Units of Partnership
Interest and Fixing Distribution and
Other Preferences and Rights of Such Units
RECITALS
A. The Board of Trustees of Xxxxxxxx Properties Trust (the "Trust") has
adopted a resolution designating and classifying 3,773,585 unissued and
unclassified preferred shares of beneficial interest of the Trust as Series A
Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest (the
"Series A Preferred Units").
B. Pursuant to Section 4.02 and Article XI of the Second Amended and
Restated Agreement of Limited Partnership (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 the Series A Cumulative Convertible
Redeemable Preferred Units of Partnership Interest (the "Series A Preferred
Units") with economic interests substantially similar to those of the Series A
Preferred Shares.
NOW, THEREFORE, the General Partner hereby adopts the following amendment
to the Partnership Agreement:
Section 4.02 is amended by adding Section 4.02(d), as follows:
(d) Series A Cumulative Convertible Redeemable Preferred Units of Partnership
Interest.
Section 1. Number of Units and Designation. This series of preferred units
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of partnership interest shall be designated as Series A Cumulative Convertible
Redeemable Preferred Units of Partnership Interest and the number of units which
shall constitute such series shall not be more than 3,773,585 units, 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 2. Definitions. For purposes of the Series A Preferred Units, the
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following terms shall have the meanings indicated:
"Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in
New York City, New York are authorized or required by law, regulation or
executive order to close.
"Call Date" shall mean the date specified in the notice to holders
required under Section 5(d) as the Call Date.
"Change of Control" shall have the meaning set forth in Section 6(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Units" shall mean all the units of partnership interest in the
Partnership that are not specifically designated as preferred units
pursuant to Section 4.02.
"Constituent Person" shall have the meaning set forth in Section 6(e).
"Conversion Date" shall have the meaning set forth in Section 6.
"Conversion Price" shall mean the conversion price per Common Unit for
which the Series A Preferred Units are convertible, as such Conversion
Price may be adjusted pursuant to Section 6. The initial conversion price
shall be $26.50.
"Current Market Price" of publicly traded Common Units or any other
Partnership Units or other security of the Partnership or any other issuer
for any day shall mean the last reported sales price, regular way, on such
day, or, if no sale takes place on such day, the average of the reported
closing bid and asked prices on such day, regular way, in either case as
reported on the New York Stock Exchange ("NYSE") or, if such security is
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not listed or admitted for trading on the NYSE, on the principal national
securities exchange on which such security is listed or admitted for
trading or, if not listed or admitted for trading on any national
securities exchange, on the Nasdaq National Market ("NASDAQ") or, if such
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security is not quoted on NASDAQ, the average of the closing bid and asked
prices on such day in the over-the-counter market as reported by the
National Association of Securities Dealers, Inc. (the "NASD") or, if bid
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and asked prices
for such security on such day shall not have been reported through the
NASD, the average of the bid and asked prices on such day as furnished by
any NYSE member firm regularly making a market in such security selected
for such purpose by the Board of Trustees. If the Common Units are not
publicly traded, then the Current Market Price of such Common Units shall
be equal to the Current Market Price of common shares of beneficial
interest of the Trust ("Common Shares"), multiplied by the then-current
Conversion Factor.
"Distribution Payment Date" shall mean (i) for any Distribution Period
with respect to which the Partnership pays a distribution on the Common
Units, the date on which such distribution is paid, or (ii) for any
Distribution Period with respect to which the Partnership does not pay a
distribution on the Common Units, a date to be set by the General Partner,
which date shall not be later than the thirtieth calendar day after the end
of the applicable Distribution Period.
"Distribution Periods" 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 A Preferred Units
(other than the initial Distribution Period, which shall commence on the
Issue Date for such Series A Preferred Units and end on and include the
last day of the calendar quarter immediately following such Issue Date, and
other than the Distribution Period during which any Series A Preferred
Units shall be redeemed pursuant to Section 5 or converted pursuant to
Section 6, which shall end on and include the Call Date with respect to the
Series A Preferred Units being redeemed).
"Expiration Time" shall have the meaning set forth in Section
6(d)(iv).
"Fair Market Value" shall mean the average of the daily Current Market
Prices of a Common Unit on the five (5) consecutive Trading Days selected
by the General partner commencing not more than 20 Trading Days before, and
ending not later than, the earlier of the day in question and the day
before any "ex date" with respect to the issuance or distribution requiring
such computation. The term "ex date," when used with respect to any
issuance or distribution, means the first day on which the Common Units
trade regular way, without the right to receive such issuance or
distribution, on the exchange or in the market, as the case may be, used to
determine that day's Current Market Price.
"Fully Junior Units" shall mean the Common Units and any other class
or series of units of partnership interest in the Partnership now or
hereafter issued and outstanding over which the Series A Preferred Units
have preference or priority in both (i) the payment of distributions and
(ii) the distribution of assets on any liquidation, dissolution or winding
up of the Trust.
"Funds from Operations" shall mean net income (loss) (computed in
accordance with generally accepted accounting principles) excluding gains
(or losses) from debt
restructuring, and distributions in excess of earnings allocated to other
minority interests (as reflected in the financial statements of the
Partnership) plus depreciation/amortization of assets unique to the real
estate industry, all computed in a manner consistent with the revised
definition of Funds From Operations adopted by the National Association of
Real Estate Investment Trusts ("NAREIT"), in its White Paper dated March
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1995, as such definitions may be modified from time to time, as determined
by the General Partner in good faith.
"Issue Date" shall mean the date on which the Series A Preferred Units
are issued.
"Issue Price" shall mean $26.50 per Series A Preferred Share.
"Junior Units" shall mean the Common Units and any other class or
series of Partnership Units now or hereafter issued and outstanding over
which the Series A Preferred Units have preference or priority in the
payment of distributions or in the distribution of assets on any
liquidation, dissolution or winding up of the Trust.
"Non-Electing Unit" shall have the meaning set forth in Section 6(e).
"Parity Units" shall have the meaning set forth in Section 9(b).
"Person" shall mean any individual, firm, partnership, corporation,
limited liability company, trust or other entity, and shall include any
successor (by merger or otherwise) of such entity.
"Purchased Units" shall have the meaning set forth in Section
6(d)(iv).
"REIT Termination Event" shall mean the earliest to occur of:
(i) the filing of a federal income tax return by the Trust for any
taxable year on which the Trust does not compute its income as a
real estate investment trust;
(ii) the approval by the unitholders of the Trust of a proposal for
the Trust to cease to qualify as a real estate investment trust;
(iii) a determination by the Board of Trustees of the Trust, based on
the advice of counsel, that the Trust has ceased to qualify as a
real estate investment trust; or
(iv) a "determination" within the meaning of Section 1313(a) of the
Code that the Trust has ceased to qualify as a real estate
investment trust.
"Securities" and "Security" shall have the meanings set forth in
Section 6(d)(iii).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series A Preferred Units" shall have the meaning given such term in
the preamble to this First Amendment.
"Set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Partnership in its
accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to a declaration or other action of the General Partner, the
allocation of funds to be so paid on any series or class of Partnership
Units of the Trust; provided, however, that if any funds for any class or
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series of Junior Shares or any class or series of shares of beneficial
interest ranking on a parity with the Series A Preferred Units as to the
payment of distributions are placed in a separate account of the Trust or
delivered to a disbursing, paying or other similar agent, then "set apart
for payment" with respect to the Series A Preferred Units shall mean
placing such funds in a separate account or delivering such funds to a
disbursing, paying or other similar agent.
"Trading Day" shall mean any day on which the securities in question
are traded on the NYSE, or if such securities are not listed or admitted
for trading on the NYSE, on the principal national securities exchange on
which such securities are listed or admitted, or if not listed or admitted
for trading on any national securities exchange, on NASDAQ, or if such
securities are not quoted on NASDAQ, in the securities market in which the
securities are traded.
"Transaction" shall have the meaning set forth in Section 6(e).
"Transfer Agent" shall mean the Trust, or such other agent or agents
of the Trust as may be designated by the Board of Trustees or their
designee as the transfer agent, registrar and distribution disbursing agent
for the Series A Preferred Units.
Capitalized terms not otherwise defined herein have the meanings ascribed to
them in the Partnership Agreement.
Section 3. Distributions.
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(a) Subject to the preferential rights of the holders of any Preferred
Units that rank senior in the payment of distributions to the Series A Preferred
Units, the holders of Series A Preferred Units shall be entitled to receive,
when, as and if determined by the General Partner in its sole discretion, out of
funds legally available for the payment of distributions, cumulative
preferential distributions payable in cash in an amount per share equal to the
greater of (i) an annual distribution of $1.60 or (ii) the regular cash
distributions (determined on each Distribution Payment Date) on the Common
Units, or portion thereof, into which a Series A Preferred Share
is convertible. The distributions referred to in clause (ii) of the preceding
sentence shall equal the number of Common Units, or portion thereof, into which
one Series A Preferred Unit will be convertible on or after the Conversion Date,
multiplied by the most current quarterly distribution on one Common Unit on or
before the applicable Distribution Payment Date. If the Partnership pays a
regular cash distribution on the Common Units with respect to a Distribution
Period after the date on which the Distribution Payment Date is declared
pursuant to clause (ii) of the definition of Distribution Payment Date and the
distribution calculated pursuant to clause (ii) of this paragraph (a) with
respect to such Distribution Period is greater than the distribution previously
declared on the Series A Preferred Units with respect to such Distribution
Period, the Partnership shall pay an additional distribution to the holders of
the Series A Preferred Units on the date on which the distribution on the Common
Units is paid, in an amount equal to the difference between (y) the distribution
calculated pursuant to clause (ii) of this paragraph (a) and (z) the amount of
distributions previously declared on the Series A Preferred Units with respect
to such Distribution Period. The distributions shall begin to accrue and shall
be fully cumulative from the first day of the applicable Distribution Period,
whether or not in any Distribution Period or Periods there shall be funds of the
Partnership legally available for the payment of such distributions, and shall
be payable quarterly, when, as and if the General Partner, in its sole
discretion, determines, in arrears on Distribution Payment Dates. Each such
distribution shall be payable in arrears 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 dates, not less than 10 nor more than 50 days preceding
such Distribution Payment Dates thereof, as shall be fixed by the General
Partner. Accrued and unpaid distributions for any past Distribution Periods may
be declared and paid at any time and for such interim periods, without reference
to any regular Distribution Payment Date, to holders of record on such date, not
less than 10 nor more than 50 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 referred to in clause (i) of Section 3(a)
payable for each full Distribution Period on the Series A Preferred Units shall
be computed by dividing the annual distribution rate by four. The initial
Distribution Period for the Series A Preferred Units will include a partial
distribution for the period from the Issue Date until the last day of the
calendar quarter immediately following such Issue Date. The amount of
distributions payable for such period, or any other period shorter than a full
Distribution Period, on the Series A Preferred Units shall be computed by
dividing the number of days in such period by 365 and multiplying the result by
the Series A Preferred distribution rate determined in accordance with Section
3(a). 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 or distributions on the Series A Preferred Units which may be
in arrears.
(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 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 Distribution Periods terminating on or prior to the Distribution Payment
Date on such class or series of 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 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 Parity
Units.
(d) So long as any Series A Preferred Units are outstanding, no
distributions (other than distributions paid solely in shares of, or options,
warrants or rights to subscribe for or purchase shares of, Fully Junior Units)
shall be declared or paid or set apart for payment or other distribution shall
be declared or made or set apart for payment upon Junior Units, nor shall any
Junior Units be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Common Units made for purposes of
an employee incentive or benefit plan of the Partnership or any subsidiary or
affiliate) for any consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any Junior Units) by the Partnership,
directly or indirectly (except by conversion into or exchange for Fully Junior
Units), unless in each case (i) the full cumulative distributions on all
outstanding Series A Preferred Units and any other Parity Units of the
Partnership shall have been or contemporaneously are declared and paid or
declared and set apart for payment for all past Distribution Periods with
respect to the Series A Preferred Units and all past distribution periods with
respect to such Parity Units and (ii) sufficient funds shall have been or
contemporaneously are declared and paid or declared and set apart for the
payment of the distribution for the current Distribution Period with respect to
the Series A Preferred Units and the current distribution period with respect to
such 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.
Section 4. Liquidation Preference.
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(a) In the event of any liquidation, dissolution or winding up of the
Partnership, whether voluntary or involuntary, subject to the prior preferences
and other rights of any series of
Partnership Units ranking senior to the Series A Preferred Units of Beneficial
Interest upon liquidation, distribution or winding up of the Partnership, 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 Junior Units, the
holders of the Series A Preferred Units shall be entitled to receive Twenty Six
Dollars and Fifty Cents ($26.50) (the "Liquidation Preference") per Series A
Preferred Units 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;
provided, that the distribution payable with respect to the Distribution Period
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containing the date of final distribution shall be equal to the greater of (i)
the distribution provided in Section 3(a)(i) or (ii) the distribution determined
pursuant to Section 3(a)(ii) for the preceding Distribution Period. If, upon any
liquidation, dissolution or winding up of the Partnership, the assets of the
Partnership, or proceeds thereof, distributable among the holders of the Series
A Preferred Units shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other shares of any class or series of
Parity Units, then such assets, or the proceeds thereof, shall be distributed
among the holders of Series A Preferred Units and any such other Parity Units
ratably in accordance with the respective amounts that would be payable on such
Series A Preferred Units and any such other Parity Units if all amounts payable
thereon were paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Partnership with one or more partnerships,
corporations, real estate investment trusts or other entities or (ii) a sale,
lease or conveyance of all or substantially all of the Partnership's property or
business shall not be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, of the Partnership.
(b) Subject to the rights of the holders of shares of any series or class
or classes of units ranking on a parity with or prior to the Series A Preferred
Units upon liquidation, dissolution or winding up, 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 4, 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 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.
Section 5. Redemption at the Option of the Partnership.
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(a) The Series A Preferred Units shall not be redeemable by the Partnership
prior to December 29, 2004. On and after December 29, 2004, the Partnership, at
its option, may redeem the Series A Preferred Units, in whole at any time or
from time to time in part out of funds legally available therefor at a
redemption price payable in cash equal to 100% of the Liquidation Preference per
Series A Preferred Units (plus all accumulated, accrued and unpaid distributions
as provided below).
(b) Upon any redemption of Series A Preferred Units pursuant to this
Section 5, the Partnership shall pay all accrued and unpaid distributions, if
any, thereon to the Call Date, without interest. If the Call Date falls after a
distribution payment record date and prior to the corresponding Distribution
Payment Date, then each holder of Series A Preferred Units at the close of
business on such distribution payment record date shall be entitled to the
distribution payable on such shares on the corresponding Distribution Payment
Date notwithstanding any redemption of such shares before such Distribution
Payment Date. Except as provided above, the Partnership shall make no payment or
allowance for unpaid distributions, whether or not in arrears, on Series A
Preferred Units called for redemption.
(c) If full cumulative distributions on the Series A Preferred Units and
any other class or series of Parity Units of the Partnership have not been
declared and paid or declared and set apart for payment, the Series A Preferred
Units may not be redeemed under this Section 5 in part and the Partnership may
not purchase or acquire Series A Preferred Units, otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of Series A
Preferred Units.
(d) Notice of the redemption of any Series A Preferred Units under this
Section 5 shall be mailed by first-class mail to each holder of record of Series
A Preferred Units to be redeemed at the address of each such holder as shown on
the Partnership's records, not less than 30 nor more than 90 days prior to the
Call Date. Neither the failure to mail any notice required by this paragraph
(d), nor any defect therein or in the mailing thereof, to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Each such mailed notice shall
state, as appropriate: (1) the Call Date; (2) the number of Series A Preferred
Units to be redeemed and, if fewer than all the shares held by such holder are
to be redeemed, the number of such shares to be redeemed from such holder; (3)
the redemption price; (4) the then-current Conversion Price; and (5) that
distributions on the shares to be redeemed shall cease to accrue on such Call
Date except as otherwise provided herein. Notice having been mailed as
aforesaid, from and after the Call Date (unless the Partnership shall fail to
make available an amount of cash necessary to effect such redemption), (i)
except as otherwise provided herein, distributions on the Series A Preferred
Units so called for redemption shall cease to accrue, (ii) such shares shall no
longer be deemed to be outstanding, and (iii) all rights of the holders thereof
as holders of Series A Preferred Units shall cease (except the rights to convert
and to receive the cash payable upon such redemption, without interest thereon,
upon surrender and endorsement of their certificates if so required and to
receive any distributions payable thereon). The Partnership's obligation to
provide cash in accordance with the preceding sentence shall be deemed fulfilled
if, on or before the Call Date, the Partnership shall deposit with a bank or
trust company (which may be an affiliate of the Partnership) that has an office
in the Borough of Manhattan, City of New York, and that has, or is an affiliate
of a bank or trust company that has, capital and surplus of at least
$50,000,000, necessary for such redemption, in trust, with irrevocable
instructions that such cash be applied to
the redemption of the Series A Preferred Units so called for redemption. No
interest shall accrue for the benefit of the holders of Series A Preferred Units
to be redeemed on any cash so set aside by the Partnership. Subject to
applicable escheat laws, any such cash unclaimed at the end of two years from
the Call Date shall revert to the general funds of the Partnership, after which
reversion the holders of such shares so called for redemption shall look only to
the general funds of the Partnership for the payment of such cash.
As promptly as practicable after the Call Date, such Series A Preferred
Units shall be exchanged for any cash (without interest thereon) for which such
Series A Preferred Units have been redeemed, such exchange to be evidenced by
appropriate amendments of Exhibit A to the Agreement and payment to the holder
thereof (as shown on the records of the Partnership) of such cash. If fewer than
all the outstanding Series A Preferred Units are to be redeemed, shares to be
redeemed shall be selected by the Partnership from outstanding Series A
Preferred Units not previously called for redemption pro rata (as nearly as may
be), by lot or by any other method determined by the Partnership in its sole
discretion to be equitable.
Section 6. Conversion. Holders of Series A Preferred Units shall have the
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right to convert all or a portion of such units into Common Units, as follows:
(a) Subject to and upon compliance with the provisions of this Section
6, a holder of Series A Preferred Units shall have the right, at his or her
option, upon the earliest to occur of (i) the sixty first day after such
holder provides the General Partner with written notice that the Series A
Preferred Units are convertible into Common Units in accordance with the
provisions of this Agreement; provided that such holder may not provide
such notice prior to November 1, 1998, (ii) the first day on which a Change
of Control occurs, (iii) the occurrence of a REIT Termination Event, or
(iv) such date as determined by the General Partner (the "Conversion
Date"), to convert all or any portion of such units (or such units as
determined by the General Partner if pursuant to clause (iv) above) into
the number of Common Units obtained by dividing the aggregate Liquidation
Preference of such units (inclusive of accrued but unpaid distributions) by
the Conversion Price (as in effect at the time and on the date provided for
in the last paragraph of paragraph (b) of this Section 6), such conversion
to be made in the manner provided in paragraph (b) of this Section 6;
provided, however, that the right to convert units called for redemption
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pursuant to Section 5 shall terminate at the close of business on the fifth
Business Day prior to the Call Date fixed for such redemption, unless the
Partnership shall default in making payment of the cash payable upon such
redemption under Section 5.
"Change of Control" means each occurrence of any of the following: (i)
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the acquisition, directly or indirectly, by any individual or entity or
group (as such term is used in Section 13(d)(3) of the Exchange Act) of
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act,
except that such individual or entity shall be deemed to
have beneficial ownership of all shares that any such individual or entity
has the right to acquire, whether such right is exercisable immediately or only
after passage of time) of more than 25% of the Trust's outstanding shares of
beneficial interest with voting power, under ordinary circumstances, to elect
trustees of the Trust; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Trustees of the Trust (together with any new trustees whose election by such
Board of Trustees or whose nomination for election by the unitholders of the
Trust was approved by a vote of 66 2/3% of the trustees of the Trust then still
in office who were either trustees at the beginning of such period, or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Trustees then in office; and
(iii) (A) the Trust or the Partnership consolidating with or merging into
another entity or conveying, transferring or leasing all or substantially all of
its assets (including, but not limited to, real property investments) to any
individual or entity, or (B) any entity consolidating with or merging into the
Trust or the Partnership, which in either event (A) or (B) is pursuant to a
transaction in which the outstanding voting shares of beneficial interest of the
Trust or voting units of the Partnership are reclassified or changed into or
exchanged for cash, securities or other property; provided, however, that the
events described in clause (iii) shall not be deemed to be a Change of Control
(a) if the sole purpose of such event is that the Trust or the Partnership is
seeking to change its domicile or to change its form of organization from a
trust to a corporation or (b) if, in the case of the Trust, the holders of the
exchanged securities of the Trust immediately after such transaction
beneficially own at least a majority of the securities of the merged or
consolidated entity normally entitled to vote in elections of its trustees or
directors.
(b) In order to exercise the conversion right, the holder of each Series A
Preferred Unit to be converted shall irrevocably instruct the General Partner in
a writing duly executed by the holder or the holder's duly authorized attorney,
with signature guaranteed, to convert such units into Common Units. The General
Partner, in its sole discretion, may require such holder to provide additional
instruments of transfer as its deems necessary or desirable to effect the
conversion. Each instruction shall be accompanied by an amount sufficient to pay
any transfer or similar tax (or evidence reasonably satisfactory to the General
Partner demonstrating that such taxes have been paid).
Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which such instruction and such notice
shall have been received by the General Partner as aforesaid (and if applicable,
payment of an amount equal to the distribution payable on such units shall have
been received by the General Partner as described above) and such conversion
shall be at the Conversion Price in effect at such time on such date.
Holders of Series A Preferred Units at the close of business on a
distribution payment record date shall be entitled to receive the distribution
payable on such units on the corresponding Distribution Payment Date
notwithstanding the conversion thereof following such distribution payment
record date and prior to such Distribution Payment Date. However, the holder of
Series A Preferred Units converted during the period between the close of
business on any distribution payment record date and the opening of business on
the corresponding Distribution Payment Date (except Series A Preferred Units
converted after the issuance of notice of redemption with respect to a Call Date
during such period, such Series A Preferred Units being entitled to such
distribution on the Distribution Payment Date) must pay to the Partnership an
amount equal to the distribution payable on such units on such Distribution
Payment Date. A holder of Series A Preferred Units on a distribution payment
record date who converts Series A Preferred Units into Common Units on the
corresponding Distribution Payment Date will receive the distribution payable by
the Partnership on such Series A Preferred Units on such date, and the
converting holder need not pay the amount of such distribution upon conversion.
Except as provided above, the Partnership shall make no payment or allowance for
unpaid distributions, whether or not in arrears, on converted units or for
distributions on the Common Units issued upon such conversion.
(c) In lieu of any fractional interest in a Common Unit that would
otherwise be deliverable upon the conversion of a Series A Preferred Share, the
General Partner, in its sole discretion, may cause the Partnership to pay to the
holder of such fractional unit an amount in cash based upon the Fair Market
Value of the Common Units on the Trading Day immediately preceding the date of
conversion. If more than one unit shall be surrendered for conversion at one
time by the same holder, the number of full Common Units issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
Series A Preferred Units so surrendered.
(d) The Conversion Price shall be adjusted from time to time as follows:
(i) If the Partnership shall after the Issue Date (A) make a
distribution on its Partnership Units in Common Units, (B) subdivide its
outstanding Common Units into a greater number of units, (C) combine its
outstanding Common Units into a smaller number of units or (D) issue any
Partnership Units by reclassification of its Common Units, the Conversion
Price in effect at the opening of business on the day following the date
fixed for the determination of unitholders entitled to receive such
distribution or distribution or at the opening of business on the Business
Day next following the day on which such subdivision, combination or
reclassification becomes effective, as the case may be, shall be adjusted
so that the holder of any Series A Preferred Units thereafter surrendered
for conversion shall be entitled to receive the number of Common Units that
such holder would have owned or have been entitled to receive after the
happening of
any of the events described above as if such Series A Preferred Units had
been converted immediately prior to the record date in the case of a
distribution or distribution or the effective date in the case of a
subdivision, combination or reclassification. An adjustment made pursuant
to this subparagraph (i) shall become effective immediately after the
opening of business on the Business Day next following the record date
(except as provided in paragraph (h) below) in the case of a distribution
and shall become effective immediately after the opening of business on the
Business Day next following the effective date in the case of a
subdivision, combination or reclassification.
(ii) If the Partnership shall issue after the Issue Date rights,
options or warrants to all holders of Common Units entitling them (for a
period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Common Units at a price per share less than 95%
(100% if a stand-by underwriter is used and charges the Partnership a
commission) of the Fair Market Value per Common Unit on the record date for
the determination of unitholders entitled to receive such rights, options
or warrants, then the Conversion Price in effect at the opening of business
on the Business Day next following such record date shall be adjusted to
equal the price determined by multiplying (A) the Conversion Price in
effect immediately prior to the opening of business on the Business Day
next following the date fixed for such determination by (B) a fraction, the
numerator of which shall be the sum of (x) the number of Common Units
outstanding on the close of business on the date fixed for such
determination and (y) the number of shares that the aggregate proceeds to
the Partnership from the exercise of such rights, options or warrants for
Common Units would purchase at 95% of such Fair Market Value (or 100% in
the case of a stand-by underwriting), and the denominator of which shall be
the sum of (x) the number of Common Units outstanding on the close of
business on the date fixed for such determination and (y) the number of
additional Common Units offered for subscription or purchase pursuant to
such rights, options or warrants. Such adjustment shall become effective
immediately after the opening of business on the day next following such
record date (except as provided in paragraph (h) below). In determining
whether any rights, options or warrants entitle the holders of Common Units
to subscribe for or purchase Common Units at less than 95% of such Fair
Market Value (or 100% in the case of a stand-by underwriting), there shall
be taken into account any consideration received by the Partnership upon
issuance and upon exercise of such rights, options or warrants, the value
of such consideration, if other than cash, to be determined by the General
Partner whose determination shall be conclusive.
(iii) If the Partnership shall distribute to all holders of its Common
Units any securities of the Partnership (other than Common Units) or
evidence of its indebtedness or assets (excluding cumulative cash
distributions or distributions paid with respect to the Common Units after
December 31, 1996 which are not in excess of the following: the sum of (A)
the Partnership's cumulative undistributed Funds from Operations at
December 31, 1996, plus (B) the cumulative amount of Funds from Operations,
as determined by the General Partner, after December 31, 1996, minus (C)
the cumulative amount of distributions accrued or paid in respect of the
Series A Preferred Units or any other class or series of preferred units of
the Partnership after the Issue Date or rights, options or warrants to
subscribe for or purchase any of its securities (excluding those rights,
options and warrants issued to all holders of Common Units entitling them
for a period expiring within 45 days after the record date referred to in
subparagraph (ii) above to subscribe for or purchase Common Units, which
rights and warrants are referred to in and treated under subparagraph (ii)
above) (any of the foregoing being hereinafter in this subparagraph (iii)
collectively called the "Securities" and individually a "Security"), then
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in each such case the Conversion Price shall be adjusted so that it shall
equal the price determined by multiplying (x) the Conversion Price in
effect immediately prior to the close of business on the date fixed for the
determination of unitholders entitled to receive such distribution by (y) a
fraction, the numerator of which shall be the Fair Market Value per Common
Unit on the record date mentioned below less the then fair market value (as
determined by the General Partner, whose determination shall be conclusive)
of the portion of the Securities or assets or evidences of indebtedness so
distributed or of such rights, options or warrants applicable to one Common
Unit, and the denominator of which shall be the Fair Market Value per
Common Unit on the record date mentioned below. Such adjustment shall
become effective immediately at the opening of business on the Business Day
next following (except as provided in paragraph (h) below) the record date
for the determination of unitholders entitled to receive such distribution.
For the purposes of this subparagraph (iii), the distribution of a
Security, which is distributed not only to the holders of the Common Units
on the date fixed for the determination of unitholders entitled to such
distribution of such Security, but also is distributed with each Common
Unit delivered to a Person converting a Series A Preferred Unit after such
determination date, shall not require an adjustment of the Conversion Price
pursuant to this subparagraph (iii); provided that on the date, if any, on
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which a person converting a Series A Preferred Unit would no longer be
entitled to receive such Security with a Common Unit (other than as a
result of the termination of all such Securities), a distribution of such
Securities shall be deemed to have occurred and the Conversion Price shall
be adjusted as provided in this subparagraph (iii) (and such day shall be
deemed to be "the date fixed for the determination of the unitholders
entitled to receive such distribution" and "the record date" within the
meaning of the two preceding sentences).
(iv) In case a tender or exchange offer (which term shall not include
open market repurchases by the Partnership) made by the Partnership or any
subsidiary of the Partnership for all or any portion of the Common Units
shall expire and such tender or exchange offer shall involve the payment by
the Partnership or such subsidiary of consideration per Common Unit having
a fair market value (as determined in good faith by the General Partner,
whose determination shall be conclusive), at the last time (the "Expiration
----------
Time") tenders or exchanges may be made pursuant to such tender or exchange
----
offer, that exceeds the Current Market Price per Common Unit on the Trading
Day next succeeding the Expiration Time, the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the effectiveness of
the Conversion Price reduction contemplated by this subparagraph, by a
fraction of which the numerator shall be the number of Common Units
outstanding (including any tendered or exchanged units) at the Expiration
Time, multiplied by the Current Market Price per Common Unit on the Trading
Day next succeeding the Expiration Time, and the denominator shall be the
sum of (A) the fair market value (determined as aforesaid) of the aggregate
consideration payable to unitholders based upon the acceptance (up to any
maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any maximum, being referred to
as the "Purchased Units") and (B) the product of the number of Common Units
---------------
outstanding (less any Purchased Units) at the Expiration Time and the
Current Market Price per Common Unit on the Trading Day next succeeding the
Expiration Time, such reduction to become effective immediately prior to
the opening of business on the day following the Expiration Time.
(v) No adjustment in the Conversion Price shall be required unless
such adjustment would require a cumulative increase or decrease of at least
1% in such price; provided, however, that any adjustments that by reason of
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this subparagraph (v) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment until made; and
provided, further, that any adjustment shall be required and made in
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accordance with the provisions of this Section 6 (other than this
subparagraph (v)) not later than such time as may be required in order to
preserve the tax-free nature of a distribution to the holders of Common
Units. Notwithstanding any other provisions of this Section 6, the
Partnership shall not be required to make any adjustment of the Conversion
Price for the issuance of any Common Units pursuant to any plan providing
for the reinvestment of distributions or interest payable on securities of
the Partnership and the investment of additional optional amounts in Common
Units under such plan. All calculations under this Section 6 shall be made
to the nearest cent (with $.005 being rounded upward) or to the nearest
one-tenth of a unit (with .05 of a
unit being rounded upward), as the case may be. Anything in this paragraph
(d) to the contrary notwithstanding, the Partnership shall be entitled, to
the extent permitted by law, to make such reductions in the Conversion
Price, in addition to those required by this paragraph (d), as it in its
discretion shall determine to be advisable in order that any share
distributions, subdivision of shares, reclassification or combination of
shares, distribution of rights or warrants to purchase shares or
securities, or distribution of other assets (other than cash distributions)
hereafter made by the Partnership to its partners shall not be taxable.
(e) If the Partnership shall be a party to any transaction (including
without limitation a merger, consolidation, self tender offer for all or
substantially all of its Common Units, sale of all or substantially all of the
Partnership's assets or recapitalization of the Common Units and excluding any
transaction as to which subparagraph (d)(i) of this Section 6 applies) (each of
the foregoing being referred to herein as a "Transaction"), in each case as a
-----------
result of which all or substantially all of the Common Units are converted into
the right to receive shares, securities or other property (including cash or any
combination thereof), each Series A Preferred Unit which is not redeemed or
converted into the right to receive shares, securities or other property prior
to such Transaction shall thereafter be convertible into the kind and amount of
shares, securities and other property (including cash or any combination
thereof) receivable upon the consummation of such Transaction by a holder of
that number of Common Units into which one Series A Preferred Unit was
convertible immediately prior to such Transaction, assuming such holder of
Common Units (i) is not a Person with which the Partnership consolidated or into
which the Partnership merged or which merged into the Partnership or to which
such sale or transfer was made, as the case may be ("Constituent Person"), or an
------------------
affiliate of a Constituent Person and (ii) failed to exercise his rights of
election, if any, as to the kind or amount of shares, securities and other
property (including cash) receivable upon such Transaction (provided that if the
kind or amount of shares, securities and other property (including cash)
receivable upon such Transaction is not the same for each Common Unit held
immediately prior to such Transaction by other than a Constituent Person or an
affiliate thereof and in respect of which such rights of election shall not have
been exercised ("Non-Electing Unit"), then for the purpose of this paragraph (e)
-----------------
the kind and amount of shares, securities and other property (including cash)
receivable upon such Transaction by each Non-Electing Unit shall be deemed to be
the kind and amount so receivable per unit by holders of a plurality of the
Non-Electing Units). The Partnership shall not be a party to any Transaction
unless the terms of such Transaction are consistent with the provisions of this
paragraph (e), and it shall not consent or agree to the occurrence of any
Transaction until the Partnership has entered into an agreement with the
successor or purchasing entity, as the case may be, for the benefit of the
holders of the Series A Preferred Units that will contain provisions enabling
the holders of the Series A Preferred Units that remain outstanding after such
Transaction to convert into the consideration received by holders of Common
Units at the Conversion
Price in effect immediately prior to such Transaction. The provisions of this
paragraph (e) shall similarly apply to successive Transactions.
(f) If:
(i) the Partnership shall declare a distribution on its Common Units
(other than cash distributions or distributions paid with respect to the
Common Units after December 31, 1996 not in excess of the sum of the
Partnership's cumulative undistributed Funds from Operations at December
31, 1996, plus the cumulative amount of Funds from Operations, as
determined by the General Partner, after December 31, 1996, minus the
cumulative amount of distributions accrued or paid in respect of the Series
A Preferred Units or any other class or series of preferred units of the
Partnership after the Issue Date); or
(ii) the Partnership shall authorize the granting to all holders of
Common Units of rights, options or warrants to subscribe for or purchase
any units of any class or any other rights, options or warrants; or
(iii) there shall be any reclassification of the Common Units (other
than an event to which subparagraph (d)(i) of this Section 6 applies) or
any consolidation or merger to which the Partnership is a party (other than
a merger in which the Partnership is the surviving entity) and for which
approval of any partners of the Partnership is required, or a self tender
offer by the Partnership for all or substantially all of its outstanding
Common Units or the sale or transfer of all or substantially all of the
assets of the Partnership as an entirety; or
(iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Partnership;
then the General Partner shall cause to be mailed to the holders of Series A
Preferred Units at their addresses as shown on the records of the Partnership,
as promptly as possible, but at least 10 days prior to the applicable date
hereinafter specified, a notice stating (A) the date on which a record is to be
taken for the purpose of such distribution, or granting of rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Units of record to be entitled to such distribution, or rights,
options or warrants are to be determined or (B) the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Units of record shall be entitled to
exchange their Common Units for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up. Failure to give or receive such notice
or any defect therein shall not affect the legality or validity of the
proceedings described in this Section 6.
(g) Whenever the Conversion Price is adjusted as herein provided, the
General Partner shall promptly (i) execute and file in its records an officer's
certificate setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment which certificate
shall be conclusive evidence of the correctness of such adjustment absent
manifest error, and (ii) prepare a notice of such adjustment of the Conversion
Price setting forth the adjusted Conversion Price and the effective date of such
adjustment and shall mail such notice of such adjustment of the Conversion Price
to the holder of each Series A Preferred Unit at such holder's last address as
shown on the records of the Partnership.
(h) In any case in which paragraph (d) of this Section 6 provides that an
adjustment shall become effective on the day next following the record date for
an event, the Partnership may defer until the occurrence of such event (A)
issuing to the holder of any Series A Preferred Unit converted after such record
date and before the occurrence of such event the additional Common Units
issuable upon such conversion by reason of the adjustment required by such event
over and above the Common Units issuable upon such conversion before giving
effect to such adjustment and (B) paying to such holder any amount of cash in
lieu of any fraction pursuant to paragraph (c) of this Section 6.
(i) There shall be no adjustment of the Conversion Price in case of the
issuance of any shares of beneficial interest of the Partnership in a
reorganization, acquisition or other similar transaction except as specifically
set forth in this Section 6. If any action or transaction would require
adjustment of the Conversion Price pursuant to more than one paragraph of this
Section 6, only one adjustment shall be made and such adjustment shall be the
amount of adjustment that has the highest absolute value.
(j) If the Partnership shall take any action affecting the Common Units,
other than action described in this Section 6, that in the opinion of the
General Partner would materially and adversely affect the conversion rights of
the holders of the Series A Preferred Units, the Conversion Price for the Series
A Preferred Units may be adjusted, to the extent permitted by law, in such
manner, if any, and at such time, as the General Partner, in its sole
discretion, may determine to be equitable in the circumstances.
The Partnership shall endeavor to comply with all federal and state
securities laws and regulations thereunder in connection with the issuance of
any securities that the Partnership shall be obligated to deliver upon
conversion of the Series A Preferred Units.
(k) The Partnership will pay any and all documentary stamp or similar issue
or transfer taxes payable in respect of the issue or delivery of Common Units or
other securities or property on conversion of the Series A Preferred Units
pursuant hereto; provided, however, that the Partnership shall not be required
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to pay any tax that may be
payable in respect of any transfer involved in the issue or delivery of Common
Units or other securities or property in a name other than that of the holder of
the Series A Preferred Units to be converted, and no such issue or delivery
shall be made unless and until the person requesting such issue or delivery has
paid to the Partnership the amount of any such tax or established, to the
reasonable satisfaction of the Partnership, that such tax has been paid.
Section 7. Ranking. Any class or series of Partnership Units shall be
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deemed to rank:
(a) prior to the Series A Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of distributions or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to the
holders of Series A Preferred Units;
(b) on a parity with the Series A Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the distribution rates, Distribution Payment Dates or
redemption or liquidation prices per share 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 the receipt of distributions and
of amounts distributable upon liquidation, dissolution or winding up in
proportion to their respective amounts of accrued and unpaid distributions per
share or liquidation preferences, without preference or priority one over the
other ("Parity Units");
------------
(c) junior to the Series A Preferred Units, as to the payment of
distributions or as to the distribution of assets upon liquidation, dissolution
or winding up, if such class or series shall be Junior Shares; and
(d) junior to the Series A Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution
or winding up, if such class or series shall be Fully Junior Units.
Section 8. Voting. Except as expressly provided herein, the holders of
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Series A Preferred Units shall have no voting rights.
So long as any Series A Preferred Units are outstanding, in addition to any
other vote or consent of partners required by law or by the Partnership
Agreement, the affirmative vote of at least 51% of the votes entitled to be cast
by the holders of the Series A Preferred Units given in
person or by proxy, either in writing without a meeting or by vote at any
meeting called for the purpose, shall be necessary for effecting or validating:
(a) Any amendment, alteration or repeal of any of the provisions of
the Agreement that materially and adversely affects the voting powers,
rights or preferences of the holders of the Series A Preferred Units;
provided, however, that the amendment of the provisions of the Partnership
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Agreement so as to authorize or create or to increase the authorized amount
of, any Parity Units, Fully Junior Units or Junior Units that are not
senior in any respect to the Series A Preferred Units shall not be deemed
to materially adversely affect the voting powers, rights or preferences of
the holders of Series A Preferred Units; or
(b) A consolidation with or merger of the Partnership into another
entity, or a consolidation with or merger of another entity into the
Partnership, unless in each such case each Series A Preferred Units (i)
shall remain outstanding without a material and adverse change to its terms
and rights or (ii) shall be converted into or exchanged for convertible
securities of the surviving entity having preferences, conversion or other
rights, voting powers, restrictions, limitations as to distributions,
qualifications and terms or conditions of redemption thereof identical to
that of a Series A Preferred Unit (except for changes that do not
materially and adversely affect the holders of the Series A Preferred
Units);
provided, however, that no such vote of the holders of Series A Preferred Units
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shall be required if, at or prior to the time when such amendment, alteration or
repeal is to take effect, or when the issuance of any such prior shares or
convertible security is to be made, as the case may be, provision is made for
the redemption of all Series A Preferred Units at the time outstanding to the
extent such redemption is authorized by Section 5 hereof.
For purposes of the foregoing provisions of this Section 8, each Series A
Preferred Unit shall have one (1) vote per unit, except that when any other
series of Preferred Units shall have the right to vote with the Series A
Preferred Units as a single class on any matter, then the Series A Preferred
Units and such other series shall have with respect to such matters one (1) vote
per $26.50 (or less pursuant to Section 4(a) hereof) of stated liquidation
preference. Except as otherwise required by applicable law or as set forth
herein, the Series A Preferred Units shall not have any relative, participating,
optional or other special voting rights and powers other than as set forth
herein, and the consent of the holders thereof shall not be required for the
taking of any Partnership action.
Record Holders. The General Partner may deem and treat the record holder of
--------------
any Series A Preferred Units as the true and lawful owner thereof for all
purposes, and the General Partner shall not be affected by any notice to the
contrary.
IN WITNESS WHEREOF, the General Partner has caused this Amendment to be
duly executed by its Vice President this 29th day of December, 1997.
XXXXXXXX PROPERTIES I, INC.
By:/S/ Xxxxxxx X. Xxxxx
----------------------------
Vice President
